Earnings call transcript: Medical Properties Trust Q2 2025 shows EPS miss, revenue beat

Medical Properties Trust Inc. reported its second-quarter 2025 earnings, revealing a significant earnings per share (EPS) miss, with an actual EPS of -$0.16 compared to a forecast of $0.01. Despite this, the company exceeded revenue expectations, reporting $240.36 million against a forecast of $231.09 million. Following the earnings release, the company’s stock saw a pre-market increase of 2.42%, reflecting mixed investor sentiment. According to InvestingPro data, the company maintains a significant 7.75% dividend yield and has consistently paid dividends for 21 consecutive years, demonstrating long-term shareholder commitment despite current challenges.

Key Takeaways

• Medical Properties Trust reported a significant EPS miss but exceeded revenue expectations.
• The stock increased 2.42% in pre-market trading.
• The company continues to focus on healthcare real estate infrastructure and international market expansion.
• Strategic refinancing and asset sales are part of ongoing financial flexibility efforts.
• Guidance suggests a positive outlook with targeted cash rent growth.

Company Performance

Medical Properties Trust demonstrated resilience in the face of an EPS miss by delivering a revenue beat. The company’s focus on healthcare real estate and strategic international investments, particularly in Switzerland, has bolstered its market position. The increase in cash rent from new properties and ongoing tenant portfolio optimization are key drivers of performance. With a robust gross profit margin of 97.04% and a current ratio of 5.79, InvestingPro analysis shows the company maintains strong operational efficiency and healthy liquidity. For deeper insights into MPW’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Financial Highlights

• Revenue: $240.36 million, up from the forecast of $231.09 million.
• Earnings per share: -$0.16, significantly below the forecast of $0.01.
• Normalized FFO: $0.14 per share for Q2 2025.
• Net impairments and fair market value adjustments totaled approximately $111 million.

Earnings vs. Forecast

Medical Properties Trust’s actual EPS of -$0.16 fell short of the forecasted $0.01, marking a 1700% negative surprise. However, the company exceeded revenue expectations with a 4.01% positive surprise, reporting $240.36 million compared to the forecast of $231.09 million.

Market Reaction

Despite the EPS miss, Medical Properties Trust’s stock rose 2.42% in pre-market trading, reaching $4.23. This movement reflects investor confidence in the company’s revenue performance and strategic initiatives. The stock’s performance remains within its 52-week range, with a low of $3.51 and a high of $6.55. InvestingPro analysis indicates the stock is currently undervalued, trading at just 0.53 times book value. While the stock has faced pressure, showing a -9.12% return over the past six months, its attractive valuation metrics suggest potential upside opportunity. Discover more undervalued opportunities in the healthcare sector with InvestingPro’s advanced stock screener and detailed financial analysis tools.

Outlook & Guidance

The company is targeting annualized cash rent of over $1 billion by the end of 2026. Projections for future quarters suggest moderate EPS growth, with expectations of $0.01 to $0.02 per share. Revenue forecasts indicate continued growth, reaching $261.38 million by Q2 2026.

Executive Commentary

CEO Ed Aldag expressed confidence in achieving annualized cash rent targets, emphasizing financial flexibility. CFO Steve Hamner noted the increase in asset values and the strategic focus on financial decisions to enhance flexibility.

Risks and Challenges

• Potential changes in Medicaid funding could impact revenue.
• Operational challenges among tenants may affect rent collection.
• Macroeconomic pressures, such as interest rate fluctuations, could influence refinancing efforts.
• Market saturation in healthcare real estate could limit growth opportunities.
• Ongoing tenant portfolio optimization may present execution risks.

Q&A

During the earnings call, analysts inquired about the company’s handling of the Prospect bankruptcy recovery process and the impact of potential CMS inpatient-only list changes. Management addressed these concerns, highlighting efforts to manage operational challenges and maintain financial stability.

Full transcript - Medical Properties Trust Inc (MPW) Q2 2025:

John, Conference Operator: Thank you for standing by. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the Medical Properties Trust Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise during this sixty minute call. After the speakers’ remarks, there will be a question and answer session.

Thank you. I would now like to turn the call over to Charles Lambert, Senior Vice President. Please go ahead.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Thank you, and good morning.

Charles Lambert, Senior Vice President, Medical Properties Trust: Welcome to the Medical Properties Trust conference call to discuss our second quarter twenty twenty five financial results. With me today are Edward K. Aldag Jr, Chairman, President and Chief Executive Officer of the company Stephen Hamner, Executive Vice President and Chief Financial Officer Kevin Hannah, Senior Vice President, Controller and Chief Accounting Officer Rosa Hooper, Senior Vice President of Operations and Secretary and Jason Fry, Managing Director, Asset Management and Underwriting. Our press release was distributed this morning and furnished on Form eight ks with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website at medicalpropertiestrust.com in the Investor Relations section.

Additionally, we’re hosting a live webcast of today’s call, which you can access in that same section. During the course of this call, we will make projections and certain other statements that may be considered forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our financial results and future events to differ materially from those expressed in or underlying such forward looking statements. We refer you to the company’s reports filed with the Securities and Exchange Commission for a discussion of the factors that could cause the company’s actual results or future events to differ materially from those expressed in this call. The information being provided today is as of this date only and except as required by the federal securities laws, the company does not undertake a duty to update any such information.

In addition, during the course of the conference call, we will describe certain non GAAP financial measures, which should be considered in addition to and not in lieu of comparable GAAP financial measures. Please note that in our press release, Medical Properties Trust has reconciled all non GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at medicalpropertystress.com for the most directly comparable financial measures and related reconciliations. I will now turn the call over to our Chief Executive Officer, Ed Aldag. Thank you, Charles, and thanks to all

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: of you for joining us this morning on our second quarter twenty twenty five earnings call. Before you hear from the rest of the team, I’ll spend a few minutes discussing the state of the health care market and a few recent strategic updates. In early July, the U. S. Congress passed the One Big Beautiful Bill Act introducing Medicaid funding changes and work requirements for the Affordable Care Act.

These changes are expected to be phased in over the next decade to allow ample time for hospital operators to adjust their businesses as necessary. And as providers digest this impact, we expect they will increasingly explore innovative capital solutions, creating greater need for MPT’s business model to enhance financial flexibility and operational agility. MPD’s objective has always been to offer hospitals permanent capital solutions that facilitate greater focus on patient care, and we are committed today, as ever, to doing our part hospitals can continue serving the communities that they rely on. Shifting to a few important updates from the quarter. As Rosa will discuss in detail shortly, our portfolio of new tenants continues to report encouraging performance trends, and rental income associated with these facilities is increasing rapidly as planned.

Whereas in the first quarter of this year, we reported approximately $3,400,000 in cash revenue from these properties. That has increased to $11,000,000 this quarter. We expect it to reach approximately $17,000,000 by the third quarter. In fact, three of these new operators have already ramped up to fully owed monthly contractual amounts. The new operators have done an impressive job to enhance operations, upgrade facilities, and attract top doctors and patients, and we look forward to continuing to partner with them moving forward.

Turning to our European portfolio. In June, our joint venture with in Germany announced a successful $7.00 €2,000,000 refinancing transaction at a 5.1% fixed rate. Steve will discuss this transaction in more detail as it’s an important demonstration of investor appetite for high quality health care infrastructure in Europe and further validation of our ability to access low cost capital. With steady contributions from our stabilized portfolio and a rapidly ramping portfolio of new operators, we remain confident in our ability to reach total annualized cash rent of more than $1,000,000,000 by year end 2026. Rosa?

Rosa Hooper, Senior Vice President of Operations and Secretary, Medical Properties Trust: Thank you, Ed. Turning now to some highlights from across our diverse portfolio of operators around the world. Overall, our tenants continue to report growing admissions and surgical volumes, translating to increasing EBITDARM coverage ratios across asset types year over year. I will begin with our international portfolio. Circle remains focused on being The UK’s most innovative and technologically advanced hospital provider with significant investments in robotics and AI.

Circle’s trailing twelve month EBITDARM coverage continued to increase in the second quarter year over year. Priory, the largest independent mental health care provider in The UK, has maintained steady performance with top line growth driven primarily by increased patient acuity and EBITDARM coverage of around 2.3 times. Priory expects that NHS England’s recently announced ten year health plan, which includes commitments for mental health services, will result in a more integrated, inclusive and resilient health system that they are uniquely positioned to support. Shifting to Continental Europe, in Germany, Median has delivered excellent year over year improvements in revenue and earnings driven by strong occupancy trends and increasing reimbursement rates. This performance drove a competitive and successful refinancing that Steve will review in more detail shortly.

During the quarter, MPT increased its equity investment in the InfraCore joint venture by approximately CHF 50,000,000 inclusive of a CHF 25,000,000 short term loan to facilitate the acquisition of a general acute facility in Switzerland and pay down debt. In June 2025, EVIS, the parent company of Swiss Medical Network held its first Capital Markets Day in the newly opened Genolia Innovation Hub event space. This event highlighted Swiss Medical’s stellar performance with 21 year over year revenue growth in the 2025, by significant expansion of its outpatient network and integration of new sites. Turning to The US, Ernest Health EBITDARM coverage increased to 2.3 times sustaining a trend of sequential quarterly increase increases over the past year as new developments ramp. Legacy IRFs are delivering impressive results with May 2025 trailing twelve month coverage exceeding 2.8 times.

As discussed in previous quarters, Ernest continues to execute an action plan geared towards becoming more rehab focused by establishing inpatient rehab units within its LTACs following the success of its first inpatient rehab unit at the Provo LTACH. LifePoint Health again reports strong top line revenue growth driven by increased admissions, particularly at Conemaugh Memorial, where trailing twelve month admissions increased 18% year over year. As a result, LifePoint’s EBITDARM coverage increased significantly year over year. LifePoint Behavioral reported higher admissions growth year over year. Surgery Partners delivered another quarter of excellent performance with EBITDARM coverage of approximately seven times.

In the South Florida market, HSA reports volume improvement coupled with successful implementation of several cost saving initiatives. Discharges for the first six months of twenty twenty five are almost 7% higher than the same period in 2024, and successful physician recruitment efforts have led to recruitment of lost surgical volumes, which are outpacing twenty twenty four volumes. In Louisiana, Glenwood’s discharges in the 2025 are almost 11% higher than the same period in 2024, and the local team is focused on opening additional beds as the volume demands. And at Saint Joseph Hospital in Texas, HSA’s effective physician recruitment efforts have resulted in discharges that are back in line with 2024, while surgical volumes are 3% ahead of 2024. HonorHealth in the Phoenix Metro Area has been focused on executing its self funded CapEx strategy and upgrading facilities ahead of anticipated volume recovery.

Encouragingly, requests for applications to join the medical staff have been up approximately 20% since HonorHealth took over operations. Forum Health is now paying 100% of its monthly rent on which they are fully current. In Odessa, admissions and surgical volumes have been stronger than expected. Importantly, the Quorum team is focused on ramping up OB services including the neonatal intensive care unit, which is a vital service line in the Odessa community. In summary, our transitional portfolio is quickly ramping performance and rent payments as expected, and our other tenants from around the world are delivering consistent performance driven by healthy volume and cost trends.

Put simply, MPT’s portfolio is well positioned to continue to generate significant cash flow and create value for shareholders moving forward. Kevin?

Kevin Hannah, Senior Vice President, Controller and Chief Accounting Officer, Medical Properties Trust: Thank you, Rosa. This morning, we reported normalized FFO of $0.14 per share for the 2025. The normalized FFO result is notable because the quarter was fully loaded with the incremental quarterly interest related to the $2,500,000,000 and refinance debt we completed earlier this year, The cost of which was substantially offset by the substantial increase as scheduled and cash rents from tenants that last year replaced Stewart. Similarly, additional unconsolidated interest expense related to our German JV refinancing will fully impact Q3 results. Lower G and A expense also impacted GAAP results primarily driven by reduced stock compensation expense.

This decreased stock compensation expense results from a change in the fair value fair market value of $20.24 performance based equity compensation of which no shares have vested. And to remind you, no shares are even eligible for vesting unless the share value equals at least $7 by 12/31/2027. As in our historical practice, we reversed the impact of this favorable adjustment in our normalized results. We recorded approximately $111,000,000 in net impairments and fair market value adjustments, primarily related to our investment in PHP based on the closed sale to Astrana that was previously reported. There were other immaterial adjustments to carrying values including routine adjustments to marketable securities that also included in the aggregate of net impairments and fair market value adjustments.

The carrying values of certain assets weighed to Prospect are subject to resolution of matters pending in the Prospect bankruptcy, including whether the court will approve certain changes to the debtor and possession arrangements. To the extent these matters are resolved prior to the company’s filing of its 10 Q, the impact of such resolutions may need to be reflected in the 10 Q and may vary possibly materially from the results we present today. I will now hand the call over to Steve to discuss our liquidity and capital strategy moving forward. Steve?

Steve Hamner, Executive Vice President and Chief Financial Officer, Medical Properties Trust: Thank you, Kevin. I just have a couple of points to highlight about our earnings report. First, the hospital real estate we retenanted late last year continues to generate the cash rents as expected. There was virtually no cash rent from those operators in last year’s fourth quarter, a little less than $4,000,000 in the first quarter, dollars 11,000,000 during the second quarter and that is scheduled to continue to increase to $17,000,000 next quarter. Rosa already spoke about the strong operations reported by these tenants, all of which validates the hospital real estate business model in general and our historical underwriting of these facilities in particular.

To remind you, beginning in October 2026, we expect to be collecting 100% of fully ramped rent totaling about 160,000,000 on an annualized basis. In fact, as of the start of twenty twenty five’s third quarter, contracted annualized cash rent represents more than $60,000,000 or almost 40% of the fully ramped up rent. And we have collected all but 3% of July rent as of today. Second, and as Kevin just pointed out, second quarter interest expense is fully loaded for the incremental cost of the $2,500,000,000 in new secured notes we issued mid first quarter. But on a quarter to quarter basis, the growing rental income substantially offset that incremental interest expense.

All else equal and there is no assurance that all else will remain equal as we go into the third quarter, the expected further increases in cash rents should more directly drop to the bottom line. Now just a few observations about the balance sheet, all of which are consistent repeats from previous quarters. For the second consecutive quarter, we completed a substantial refinancing transaction most recently with the previously announced secured refi of our German joint venture. Two inarguable conclusions are evident. Our assets have not only retained but increased their values.

Multiple sophisticated global institutional investors and lenders completed detailed physical and financial diligence including independent appraisals that resulted in strong value growth in these JV assets. That’s consistent with the strong valuations that attracted seven times oversubscription of the $2,500,000,000 in secured notes in February. Following that February issuance that had a blended rate of slightly less than 8% and an underwritten to very attractive underwritten 65% LTV, This most recent JV refine was executed at a low fixed rate of only 5.1%, a surprise to many analysts, especially in light of the ten year term. This was a competitive process with an outcome that continues to demonstrate the depth of the global market for well underwritten hospital real estate, proving that MPT has multiple avenues for access to affordable capital. The $30,000,000 sale in the second quarter of a standalone LTAC at an amount close to our original investment along with a handful of additional transactions we expect in the near future aggregating more than $100,000,000 are priced at amounts near or in excess of our basis continuing to demonstrate the resilience of our underwriting in maintaining the values of hospital real estate.

These pending sales are all subject to bonding contracts, one which we expect will benefit our prospect recovery waterfall. Finally, virtually every major decision we have made over the last year has been based on increasing our financial flexibility as we consider further balance sheet options. These are decisions to sell assets, retenant valuable hospital real estate with carefully attenuated cash rental schedules that are performing and paying as expected. Refinancing debt, taking the dilution associated with early redemption of lower rate debt as we satisfy all near term maturities and extending our maturity horizon to give us a long runway for execution of operational strategies that will build equity value. So today we retain the optionality that execution of these strategies has provided us.

We are not pressed for time as we continue to execute. And this quarter’s growth in contractual cash rents is demonstrative of that execution. We retain all the options that we have described in earlier quarters. We have valuable hospital real estate that is available for monetization. This may include joint venture capital.

We have clearly demonstrated the opportunities for further debt refinancing. And as we continue to execute and grow earnings, we look forward to further reduction in our cost of capital leading to increases in our equity valuations. We will continue to evaluate the best approach and use of these options at the appropriate time. And with that, I’ll turn the call back to the operator to queue any questions. John?

John, Conference Operator: Thank you. Your first question comes from the line of Michael Carroll with RBC Capital Markets. Please go ahead.

Michael Carroll, Analyst, RBC Capital Markets: Yes, thanks. Can you guys provide some color on HSA’s performance? And how confident are you that that rent ramp will occur as expected? I guess, or have they already started paying cash rents? I guess, when does that specifically commence, in your lease agreement with them?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: So, Mike, you must have missed the early part of the call. Rosa went over in great detail the improvements that they’ve made in all of the hospitals that they’ve taken over. And they have, been paying rent, and they’re current on their rent now.

Michael Carroll, Analyst, RBC Capital Markets: And are you still confident that they can that can ramp up as is is written in lease?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Yes. We we are very impressed with what they’ve done with the hospitals, the way they brought doctors that were previously operating at Stewart that left during the bankruptcy have come back, and we believe they’re doing a good job.

Michael Carroll, Analyst, RBC Capital Markets: Okay. And then, Ed, I guess, in the bankruptcy filings with Stewart, there was a claim from a lender that HSA was in default on a loan. I mean, sounds like that issue was resolved. I mean, are they still in default on that loan or can you kind of describe, HSA’s credit and if they’re on default on any other issues, outside of, MPW?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: So, Mike, that was well described in the various court filings. Just to remind you, when they took over from Stewart September 11, Stewart had not paid into the supplemental payment for Florida. There was approximately 28 some odd million dollars that was due and a $55,000,000 payment that do didn’t come from the state of Florida. HSA chose to borrow that money from a lender and pay that money into the state of Florida, And it took the state of Florida longer to repay that because the Steward the people that were running Steward post the bankruptcy or post filing bankruptcy decided to file a claim on that money even though they hadn’t paid any of the supplemental payment taxes for that. And you’re right.

That has been resolved, and, that lender has been mostly paid back. I believe there’s a small amount of money still outstanding from both the state and then from HSA to that lender. It has nothing to do with operations.

Michael Carroll, Analyst, RBC Capital Markets: Okay. Great. No, I appreciate that. And then just lastly for me, and I know that you guys discussed this a little bit on the prepared remarks, but can you talk a little bit about the prospect recovery process? I know that PHP proceeds were lower than expected.

Is that was that impaired in your financial statements in the other bucket? And I guess, you talk about like what’s the time line of the expectations of if MPW could collect anything in addition to, I guess, those PHP loans kind of in the prospect bankruptcy case?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: So, Mike, again, if you follow through the bankruptcy of this particular entity, we reached a global settlement with them, I believe it was January, January, February, something along those lines that has a waterfall. So everything goes into a bucket and then flows out. The PHP process, I think Astrana paid something in the neighborhood of $700 plus million. Vast majority of that ended up going to repay debt and legal fees and consulting fees, and so that’s why the the small amount flowed through to NPT. We believe that the stalking horses for both Connecticut and California will be announced fairly soon.

And then we believe that shortly thereafter, the auction will take place, and we will move forward with closing on these properties. Still a lot of interest particularly in the California properties.

Michael Carroll, Analyst, RBC Capital Markets: Okay. Thanks. Appreciate it.

John, Conference Operator: Your next question comes from the line of Michael Mueller with JPMorgan. Please go ahead.

Michael Mueller, Analyst, JPMorgan: Yes, hi. I jumped on late too, so I have a feeling a lot of what I was going to ask has already been covered. But just in terms of the asset sales that you mentioned, I think you mentioned about 100,000,000 Is that still expected to close this year? Can you talk a little bit about the, I guess, the product type and geographies? And then as a follow-up on the, I guess, the Swiss investment, I guess, what’s the thought process there in terms of deciding to allocate new capital for an investment as opposed to sitting on the sidelines?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: So Mike, on the properties that we expect to close on the sale, they do expect to close before year end, and they are essentially either leftover steward properties or other orphan type properties. On the Swiss Medical, as we have stated previously, one of the the avenues that we’ve been trying to explore long time with Swiss Medical and Infracore is to get inroads into the public hospitals. This was an opportunity, we believe, for InfraCore to make a strong, inroad into that market to allow them other avenues for buying properties outside of the private sector and into that public sector. It’s a relatively small investment, and we think strategically it was the right thing to do.

Michael Mueller, Analyst, JPMorgan: Got it. Thank you.

John, Conference Operator: Your next question comes from the line of John Kulichowski with Wells Fargo. Please go ahead.

John Kulichowski, Analyst, Wells Fargo: Good morning. Thank you. A question for me on just the legacy Stewart asset ramp up here. Just based on the update that you’ve given us and the expected $17,000,000 in 3Q, are you still on pace to hit that $150,000,000 annualized run rate by October 26? Or do you think you’re running ahead at this point?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Well, I think the operators are running ahead. Whether any of them will agree to ramp up their rent from their required portion, I kind of doubt it. But clearly, the operations are ahead where we thought it would be.

John Kulichowski, Analyst, Wells Fargo: Got it. And then you increased your equity investment in for core in the quarter. Could you elaborate on the strategic rationale and the expected return profile?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Yes. That was primarily done to pay off debt in InfraCore. It had debt that was coming due, and we thought it was a good return on our investment for InfraCore.

John Kulichowski, Analyst, Wells Fargo: Very helpful. Thank you.

John, Conference Operator: Your next question comes from the line of Omotayo Okusanya with Deutsche Bank. Please go ahead.

Omotayo Okusanya, Analyst, Deutsche Bank: Yes. Good morning, everyone. Steve, I just wanted to confirm, I think, a point you made earlier on with Prospect. The California asset, you talked about a stocking cost on that. Is that going to be sold?

I thought there was an opportunity to possibly tenant it instead.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Tayo, you broke up there at the end, but I think you’re asking about the potential stalking horse on the California properties. There are people that are looking there are looking there are people that are looking to lease the facilities and and entities that are looking to purchase the facilities. And I think within the next couple of weeks or so, the talking horse will be made public, and then we’ll go to an auction.

Omotayo Okusanya, Analyst, Deutsche Bank: Okay. That’s helpful. And then Ed, I appreciate the comments you made earlier on about the changes to ACA and Medicaid expansion and kind of what you thought some of your operators would have to do operators in general would have to do in anticipation of that. Could you just talk to me a little bit about, again, when you talk to your operators, kind of how they are gearing up for that to ultimately happen once some of those changes start to happen in 2028? Like what are the key things we really have to get right over the next two to three years?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Know, Tayo, if you look at the bill and all of the things that are in it, we none of us will know what exactly comes from it until we’ve had a few years to see what comes from it. And what I mean by that is the intent for the bill is to get people off of Medicaid and back into the work. Sorry, guys. I’m gonna hit the mute button. So one of the things that we won’t know is how many of those people that get back into the workforce that are getting off Medicaid go into an entity that allows them commercial insurance.

If that’s the case, then our operators would actually see an increase in their revenue. If you ask our operators, most of them are not no one’s having a heart attack about it. Most of them believe that there there there will be some places that there are improvements to their revenue because of those changes. But the bottom line is that nobody will know for sure for a number of years to come.

Omotayo Okusanya, Analyst, Deutsche Bank: Got you. That’s helpful. And then last one for Steve. The balance on the line of credit and also the cash balance kind of remains elevated. I know in 1Q, you were kind of trying to manage around some uncertainty around write offs and things like that associated with prospects.

Just kind of curious with that kind of behind you, now that you’ve kind of taken this additional write offs of 113,000,000 or 130,000,000 or so this quarter, Why is that still elevated and if we can expect some payoff of the line with the large cash balance going forward?

Steve Hamner, Executive Vice President and Chief Financial Officer, Medical Properties Trust: Yes. You’re right Tayo. It’s the same explanation as in the first quarter albeit significantly lower Going into the end of the quarter which is obviously the key date here in an abundance of caution we simply build up the cash balance. That was repaid less than twenty four hours later. Whether that will be the case at the end of the next quarter, I don’t know.

We’ll continue to evaluate and make sure that there’s no footfall on our covenants.

Omotayo Okusanya, Analyst, Deutsche Bank: Got it. So July you’ve already paid it down already in July?

Steve Hamner, Executive Vice President and Chief Financial Officer, Medical Properties Trust: That’s right.

Omotayo Okusanya, Analyst, Deutsche Bank: Excellent. Thank you very much.

John, Conference Operator: Your next question comes from the line of Harrell Granite with Bank of America. Please go ahead.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust0: Good morning. Thank you for taking my question. I was hoping that you could add a little bit more color on the CMS proposed elimination of the inpatient only list. I know you just made some comments about the big beautiful bill, but I was curious if there’s been any conversations on that and how that would impact the operation on your tenant level?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: So, Farrell, your volume was so low, we couldn’t hear the first part of your question. We heard the last part. I did went back up. Can you can you repeat that if you don’t mind?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust0: Hi. Yes. Sorry about that. First of you for taking my question. But I was curious if you could add a little color around the CMS proposed elimination of the inpatient only list and how that may impact operations on the tenant level?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Farrell, I think what you’re referring to is that it just goes from an inpatient to an outpatient and none of our operators have expressed any concern over that.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust0: Okay. Thank you. And also a little bit more color. I know you mentioned there was about 3% of rent not collected. And I think there was also a note of in the press release on the $500,000 in rent related to two facilities.

If you could just give a little bit more color.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: Sure. It’s, it’s the facilities in Ohio and the facility in Pennsylvania. I believe everybody is probably familiar with what’s going on in Ohio. We had we the the operator there had an issue with Stewart and Stewart not paying over the amount of revenue that they had generated. That is still an ongoing issue for them.

They hope to be operational again by the end of next month. We’ll see if it is or not. And then the other one is in Sharon, Pennsylvania, another very small facility. It actually is operating well under the circumstances. It’s just been a slow process for them.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust0: Okay. Thank you very much.

John, Conference Operator: Your next question comes from the line of Vikram Malhotra with Mizuho. Please go ahead.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust1: Hi. This is Georgie on for Vikram. And my apologies if I missed that. I just joined a little bit later. But have you provided any additional loans to the h HSA?

And does the HSA EBITDA cover cover the cash rent they are paying right now?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: The answer is yes and no. The we did loan an additional $5,000,000 in May. That was, again, part of the issues that where they were having very public issues that they were having with Stewart and their TSA agreement. Those have been resolved, and they are not covering full cash rent at this point.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust1: Thank you. And just one more for me. Just on the one tenant that is below one coverage, I think that’s those are the Columbia assets. What’s the latest there? Any update on, you know, where’s you do you see coverage trending?

You know, are you in is that, like, a potential risk you’re monitoring?

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: So interestingly, those hospitals are performing exceptionally well. They are extremely full. The problem is is they aren’t being reimbursed from the system down there. It’s not just our hospitals. It’s it’s countrywide.

So, hopefully, it will be resolved over the next six months, but, the administration, the new election is in May 2026, and we certainly believe it’ll be resolved by that point. But it’s not an issue of whether or not the the facilities are generating the revenue. They just aren’t collecting the cash.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust1: Great. Thank you so much for taking my questions.

John, Conference Operator: Thank you. I will now turn the call back over to Ed Alvett for closing remarks.

Ed Aldag, Chairman, President and Chief Executive Officer, Medical Properties Trust: John, thank you very much, and thank all of you again. I believe most of you probably know that Tim Berryman retired this past quarter, so this is our first earnings call in a very long time without Tim. We wish him the very, very best. And if you have any questions, please don’t hesitate to call Drew.

John, Conference Operator: Ladies and gentlemen, that concludes today’s conference call. We thank you for your participation. You may now disconnect your lines. Have a pleasant day, everyone.

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