Good morning. Welcome to the MPT conference call to discuss our second quarter 2026 financial results.

With me today are Edward K. Aldag, Jr., Chairman, President and Chief Executive Officer of the company; Steven Hamner, Executive Vice President and Chief Financial Officer; Kevin Hanna, 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 8-K with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website at mpt.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 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 mpt.com for the most directly comparable financial results and related reconciliations.

I will now turn the call over to our Chief Executive Officer, Ed Aldag.

Thank you, Charles. Thanks to all of you for joining us this morning on our second quarter 2026 earnings call.

Before I begin today, we'd like to extend our thoughts and prayers to the people of Colombia after this morning's earthquake. Now let me begin with the most significant update.

Today, we announced a comprehensive refinancing transaction that extends $2.4 billion of debt maturities to 2032, significantly reducing near-term maturities and positioning us well to pursue a balanced capital allocation strategy moving forward. Steve will discuss this transaction in more detail shortly.

Turning to our performance highlights, total portfolio EBITDARM coverage remained steady. As we continue to see robust demand for rehabilitation services around the world, our post-acute operators again delivered the strongest growth in the portfolio, with EBITDARM increasing more than $70 million year-over-year, led by a 24% increase in MEDIAN and a 13% increase in Ernest Health.

General acute performance was stable. Behavioral health remains a source of pressure on the overall portfolio.

Despite the increased importance and demand for these services, we continue to see around the world. In the UK market especially, revenue continues to be impacted by funding pressures at the NHS as the new administration in the UK works to rebalance its entire budget.

I spent last week in the UK, spending time with many of our operators there. I walked away from those meetings impressed with the level of activity across those facilities, confident in the opportunities for high-quality general acute providers, and encouraged that behavioral market remains a compelling long-term investment.

As most of our Swiss joint venture went public this summer and is now listed on the SIX exchange. Infracore continues to see attractive opportunities for growth and the company was able to access capital for further growth.

We retain a significant ownership position in Infracore and remain bullish on Switzerland and look forward to seeing our overall investments grow there. Finally, to further strengthen our portfolio, we consolidated all of our ScionHealth general acute hospitals and LifePoint leases into one LifePoint master lease.

As a part of this conversion, Scion transitioned certain MPT-owned acute hospitals to LifePoint and we are pleased with the resulting single lease relationship with a mature operator with an enhanced credit profile. With the strong trends we continue to see across our diverse portfolio of operators, the proving enduring value of our assets, and a plan to clear the runway of debt maturities until late 2028, we're well positioned to achieve our goal of over $1 billion annualized cash rent by the end of the year and to create value for the shareholders moving forward.

Rosa?

Thank you, Ed. As usual, I will walk through the trends we are seeing, the continued progress of our recently transitioned operators, and the steps tenants are taking to enhance performance.

Across our core portfolio, performance trends remain broadly stable. General acute operators still comprise the majority of the portfolio and reported aggregate EBITDARM coverage of 2.8 times during the quarter.

As Ed mentioned, our post-acute portfolio delivered another really strong performance with coverage of 2.4 times. Finally, our behavioral portfolio coverage was down slightly to 1.4 times, reflecting the discreet headwinds in the UK and US markets that we have discussed all year.

For individual operator coverage details, we would encourage you to review the supplemental published on the Investor Relations page of our website. Our international portfolio continues to provide meaningful stability.

Swiss Medical Network, MEDIAN, and Circle continue to produce strong, stable earnings, executing on their respective growth and innovation strategies. Swiss Medical Network is advancing its integrated care strategy with revenue growth supported by recent acquisitions and an ongoing shift toward higher-value outpatient and primary care.

In Germany, MEDIAN continues to build on its momentum with year-to-date EBITDA running ahead of budget. At Priory, proactive measures are being taken to address challenges related to the previously discussed shift in NHS referral patterns.

With the ongoing budget constraints in the UK, management is focused on implementing even more disciplined cost-control measures and optimizing services to better align with demand. Turning to the US, NOR continues to produce strong results.

NOR began paying 50% contractual rent in June. Operationally, NOR delivered encouraging momentum with admissions, emergency department visits, and surgeries, all higher year-over-year, reflecting volume recovery across the platform.

The emergency department project at Culver City is progressing and remains scheduled to open in the fourth quarter of 2027. HSA, which operates hospitals in Florida, Louisiana, and Texas, saw mixed results in the second quarter due to certain disruptions that caused lower cash collections and volume declines in some markets.

First, the Meditech EMR conversion caused a temporary inability to bill and collect cash for a period during the month of May, resulting in lower collections in May and June. Additionally, prior to the conversion, HSA transitioned its revenue cycle management to an outsourced firm.

Because HSA operates in markets where they serve an above-average number of indigent patients, reliance on supplemental payments from federal and state agencies is necessary. These payments are not always predictable and can therefore be a strain on cash flows.

That was evident when the Florida supplemental funding that was due in April was delayed until August, which caused further short-term pressure on HSA's liquidity. With the Meditech conversion largely behind them, HSA has brought revenue cycle management back in-house and expects to improve revenue cycle and operational efficiency in the coming months.

While cash collections are still lagging, HSA has received significant payments from the Florida supplemental funding program in August, enabling them to begin repayment of the working capital advances we made during the quarter. While trailing 12-month EBITDARM to cash rent coverage of two times, we remain cautiously optimistic about the trajectory of HSA and will continue carefully monitoring their operations.

Our US post-acute portfolio remains an area of strength. Ernest Health is a standout and we're excited to see Ernest continue to grow with its acquisition of Reunion Rehabilitation Hospitals, adding seven hospitals with closing expected this summer.

Finally, we remain confident in the long-term earnings power of these assets and in our path toward normalized rent across the portfolio. With that, I'll turn it over to Kevin.

Thank you, Rosa. Today, we reported normalized FFO of 15 cents per share for the second quarter of 2026, which was in line with our expectations as last quarter's results were 14 cents per share.

We expected the rent from HSA and NOR continue to increase in accordance with their lease agreements. As a reminder, HSA is currently paying 75% of their contractual rents, increases to 100% in mid-September.

While NOR started paying rent in mid-June equal to 50% of contractual rents, increases to 100% in mid-December. As Ed noted in his remarks, we have combined the LifePoint Behavioral and all but one Scion post-acute property into a combined single master lease.

Cash rent from this combined lease will be basically the same as it was previously. G&A expense for the quarter was higher year-over-year, primarily driven by stock compensation expense due to the change in fair market value of certain cash-settled stock awards, and the increase in depreciation expense of the corporate headquarters building that was placed into service during the first quarter of this year.

Finally, during the quarter, we impaired approximately $17 million in working capital loans, primarily related to the two Steward replacement tenants in the Midwest. Steve?

Thank you, Kevin. As Ed mentioned, this morning, we announced a two-step process to fully satisfy our 2026 and 2027 debt maturities, totaling about $2.7 billion, along with an additional approximately $1.2 billion of longer-dated unsecured notes.

Step one, which we expect to complete later today, is the issuance of $2.4 billion in secured notes, the proceeds of which will be used as follows. First, to fully redeem the upcoming maturity of our €500 million in unsecured notes, and approximately $738 million or about 53% of our unsecured notes due in 2027.

We will also exchange at a discount another approximately $1.2 billion of longer-dated unsecured notes, reducing gross debt by about $123 million. Step two, which we have commenced and expect to complete in coming weeks, will repay the remainder of the 2027 unsecured notes, complete a new multi-year bank revolver, and repay our $200 million term loan due in June 2027.

MPT will then have no debt maturing in 2026 or 2027. In fact, our sole maturity over the next three years will be a modest balance of about $600 million of notes due in June 2028.

Moreover, with $1.1 billion of expected liquidity based on recent and expected near-term asset sales, we will have substantial flexibility for further delevering in the near term. Also, importantly, our single bond maintenance covenant that requires 150% of unencumbered assets over unsecured debt will be substantially improved up to almost 300%, depending on how we deploy our liquidity.

The new notes have a coupon of 9.25%, a 5.5-year term that becomes prepayable after two years, and other customary REIT-type provisions, all of which we describe and qualify by reference to the descriptions and documents included in a to-be-filed current report on Form 8-K. I'll make a few additional observations about our overall financial position.

Once again, and in several ways, sophisticated third-party investors have affirmed that market values of our hospital assets exceed their book values. First, some of the most sophisticated global fixed-income investors underwrote the value of the assets that secure the $2.4 billion of notes we just discussed.

Moreover, recent transactions, including the IPO of Infracore in Switzerland, have established market values of our hospital assets above our original investments. In another pending sale that will close imminently, we will receive about $172 million in after-debt cash proceeds, reflecting a 60% increase over our original investment and an IRR of about 34%.

In addition to these recently completed transactions, we are in discussions with potential buyers of additional assets that, if completed, will generate hundreds of millions of dollars more in sale proceeds at pricing well above our original investments. There's no assurance that these transactions will be completed, but the fact that sophisticated parties are even initially offering this level of pricing is encouraging validation of our overall asset values.

Upon completion of these refinancings, we will retain significant additional collateral value and flexibility for future delevering. Just to reiterate, no debt maturities in June until June of 2028, and then a modest $600 million.

Up to $1.1 billion in liquidity, dependent only on completion of certain asset sales that are already in process of being negotiated, and substantial cushion in our UAUD bond covenant that opens up opportunities for certain additional delevering strategies. In closing, our business model remains attractive and growth opportunities continue to present themselves in our markets.

With our assets continuing to demonstrate attractive market value and with significant liquidity on hand, we are well positioned to continue to focus on reducing debt while capitalizing on strategic growth opportunities. With that, we will open up the call for questions.

Operator?

Thanks. Hi.

I guess the balance of the 2027 notes that you're looking to pay off, is that just going on basically a new credit line? That's going to be the near-term mechanism and what's going to be the rate on that facility?

No, that's not the expectation, Mike. In fact, phase two or step two, as we call it, will include, as I noted, the repayment of those 2027 notes, but it will not be just based on using the credit line.

Okay. Will it be all from asset sales?

No. We have a number of options that we've always had including asset sales, including liquidity that we have, and including additional secured debt opportunities.

Got it. Okay.

Thank you.

Thank you. Hi.

Good morning. Just to clarify, as I'm looking at the press release, we talk through in the opening remarks about '26 and '27, but this also talks about refinancing the '27 through '21 or excuse me, 2031 notes.

Could you just kind of clarify that timing and when this goes into place and then the pro forma cash interest for this move?

John, we're having a lot of trouble getting your question here. Can you

John, maybe you can try speaking up a little bit. Yours was very, very soft.

Apologies. Can you hear me better now?

Much better, yeah.

Yes. Thank you.

All right. Thank you.

The opening remarks focused mostly on the '26 and '27 maturities, but I'm also seeing commentary in the press release about the '27 through 2031 notes. Could you just talk through the timing and clarify, is all of that being refi-ed now as well and the pro forma cash interest number following this move?

No. It comes in two steps.

Step one is the $2.4 billion that we announced this morning. That will fully repay the '26s and cash and exchange combined of about $740 million of the '27s.

Then step next, which we expect to complete in the coming weeks, will satisfy the remainder of the '27s. In addition, as we mentioned during step one, will also exchange about a billion and a half dollars of the longer-dated notes.

Okay. Very helpful.

Thank you.

Thanks. Could you guys provide some more color on the HSA situation?

How confident are you that Conifer can push cash collections in where they need to be? I believe you indicated last quarter that they were up to 82% from 78%, but it needs to be in the 90-plus percent range, and it sounds like it dipped in May and June just due to some of the transfers that you were talking about.

Mike, it's been a lot slower than we hoped it would be. It's still in the 80s.

The good news, from an operational standpoint, as Rosa pointed out, they're generating two times coverage, but that doesn't do you any good if you're not collecting the cash. Then you had the late payments from Florida.

If you add all of that in together, we're cautiously optimistic, but they've still got to improve the cash collections greatly.

What gives you confidence that they're able to do that? Did they already receive the Florida DPP payments and that's how the first $20 million got paid back?

Can you talk about how and when you expect the next $20 million will be paid? It was unclear in the press release.

Is $10 million of that just going to be outstanding or will that be repaid soon, too?

They have received approximately half of the DPP money from Florida. The other could come in as early as today, but certainly in the next week or so.

With that money, they'll pay back the additional $20 million, and then they will have the additional $10 million or the remaining $10 million repaid sometime in the next quarter.

Okay. Then just lastly from me, I know NOR was supposed to start paying rent in June.

Did they pay that rent, and are they current right now, too?

Yes. NOR did pay the rent, and NOR is doing well.

Remember, those are two different entities, NOR and HSA. NOR's operations are doing very well.

Great. Thanks.

Thank you. I wanted to ask about asset sales.

Obviously a lot of moving parts. Could you review for us the asset sales you know you're going to make, the asset sales that you're probably going to make, and the calculus that you're using when you're determining whether or not to sell an asset?

Was that it, Mike?

No, that's it. Thanks.

Okay. What we know, what has happened and is happening in fact as we speak, we mentioned the the Infracore transaction, which generates about 140 has already generated about $140 million in proceeds for us.

I'll just point out again, I'll reiterate that that pricing, tested by the market, was at a higher valuation than we carried the assets on our books for. Secondly, today, a transaction is closing that we are regrettably not able to identify, but will be within a matter of hours, but we can tell you a transaction is closing that will generate after-debt payment about $172 million to us today.

That's the transaction that I spoke of that once again validates across the portfolio the value of our assets exceeding, sometimes by a significant amount, our original investment. In this case, an aggregate 60%-plus gain on our original recording of that investment, representing about a 34% IRR.

In addition, we are in various stages of negotiation for a handful of other significantly valued assets, each of which if they were to trade at the values that we're negotiating, would again represent significant gains over not just net book depreciated value, but our original investment. We think that could be realistically over the next few weeks another between $200 and $400 million in cash proceeds.

Possibly could be more than that, but we're relatively confident that will be in that additional $200 to $400 million proceeds level.

Okay. Obviously that's very good news on sales value versus book value.

What impact will this have on the income statement, broadly?

Obviously, a great question. It depends on a number of things that kind of self-evident to people on this call.

Obviously, the gain on sale In other words, we're earning rent typically on these assets based on our original investment. To the extent we can sell for more than that, and take those proceeds and apply them to, for example, 9.25% interest that we just issued this morning, one would think that has a very positive, perhaps, even accretive impact on on normalized FFO.

Obviously, timing of completion of the secured issuance we announced this morning, timing in terms of step two, the refinance of the bank facility, and completion of pay down of the '27s, execution and timing of asset sales, and then further delevering by use of these asset sale proceeds will all have an impact on go-forward normalized FFO. As will continued ramp up of the HSA and NOR relationships.

As those become more definitive, we'll be able to better predict and return to providing run-rate guidance in future quarters.

Great. Thank you very much.

Thank you very much. Good afternoon.

Or morning. My question is on any collateral restrictions.

I know you had mentioned some of that in your opening remarks, but hoping that you could just dive a little bit deeper on how you're thinking about any of your credit facilities' maintenance covenants, as well as what would step two potentially influence on some of those unencumbered headroom that you would still have available.

Both step one and step two have positive impacts on the UAUD. That really, Farrell, is the only maintenance covenant we have.

While it will not go away because that's a bond covenant, the cushion, the headroom it brings, I mentioned earlier, the requirement is 1.5 times, and we've been in that range, 155 to 160 over the last several quarters. We expect that with completion of step one, again, which will happen very likely today, that will go all the way up to an actual of almost 200%, and completion of step next will drive it up again as much as to 300%.

What that does is give us additional flexibility to use different strategies and give us the opportunity to further delever, which is the goal. The goal is not simply to continue to extend maturities, but to actually reduce leverage.

These transactions we're announcing this morning take us a very long step toward being able to do that more aggressively.

Thank you. My second question is I know the Prime Minister of the UK has made some commentary about potentially having social care for all adults over there.

I'm just curious, in your conversations and that you were mentioning in your recent travels, has that been coming up as a concern or actually a tailwind for the companies that are over there?

Social care is very different than healthcare. Social care is primarily focused on end-of-life and dementia-type items and other items that aren't included in the current NHS services.

Thank you.

morning. Thanks so much.

Sorry if I joined late and missed this. Do you mind just clarifying for any additional like the '27 and any future maturities or other payments, just what the thinking is post this transaction?

I'm sorry, Vikram, the question was about '27s or?

Just after you've done this transaction, you've pushed out the maturities, right? Like you said, there's nothing now through '26, '27.

Sorry, I meant post-'27. Just maybe give us the latest thinking on plans that you might sort of raise additional capital to take care of additional future maturities.

The primary immediate liquidity comes from the asset sales that even assuming, which we're not disclosing a new credit facility yet, but even assuming a meaningful decline in our current 1. $3 billion revolver, we expect to reduce the out-year, and I think this is your question, your longer-dated

Yes.

Yeah. The immediate reduction would come from asset sale proceeds.

I guess I should have expand. I meant like you said, look, we want to reduce actual overall leverage and in the view that cash flow maybe takes a bit longer to ramp up from all the transitions or just overall, say there's another tenant issue that haven't called out, but say there's something.

I'm just trying to figure out over the next 2 years, how do you, in absolute, get net debt-to-EBITDA down from here? If there's any other plan and maybe that works into a broader question.

As you were contemplating this, any latest thoughts on I guess I shouldn't call it simplifying, but maybe shrinking the overall portfolio. You've got US, you've got global.

Any thoughts on taking pieces from here and doing a bigger, broader strategic transaction?

As we've been saying now really going on a couple of years, we have a number of alternatives. Those really haven't changed with our announcement this morning.

We retain all of them. They include maybe some things that you may be alluding to.

There are a couple of ways to easily raise liquidity for debt reduction. One I've described, selling assets.

We're doing that. Another is selling equity.

We don't think it's the right time to sell equity with the stock where it is. We think the valuation is significantly greater than that, and we think that's proved almost every time we sell an asset, that our assets are significantly more valuable than what's reflected on our balance sheet.

It'd be wrong not to acknowledge that that's one way to reduce debt. We've cleared the runway to continue to be able to improve the operations, continue to see the asset values grow, and continue to pay down debt in ways that aren't so grossly dilutive to selling stock when you think it's not the right time to sell stock.

That's fair. Then just lastly, if I can clarify.

With the sales you're contemplating, how should we think about where multiples are or cap rates are today? What's the broad range and how should we think about a core asset in the US versus maybe one that's more struggling?

Maybe just give us some sense of how the private markets valuing these assets relative to public.

Vikram, I think that it goes across the board, but if you look at what Steve mentioned earlier in the call, every single one of the assets that we're in current negotiations with or have actually closed, we weren't out marketing them. People came to us.

There's a high demand for our assets both in the US and in in Europe.

Thank you.

Thanks. Steve, where is MPT at on its secured debt ratio?

Correct me if I'm wrong here, but I think that covenant is about 40%, and it sounds like with the phase one secured debt issuance, that kind of puts you pretty close to that ratio. Does MPT have capacity to issue additional secured debt via phase two?

We do. You're absolutely right, Mike.

It does drive us up from where we were this morning, which was around 25%, to much closer to that 40% level.

I guess will these additional asset sales give you more capacity to make more room on that secured debt ratio? I'm calculating that you're pretty tight where you don't really have much more secured debt.

Is there any color on how you can regain additional secured debt via this phase two path?

Just by definition, you're you're right, Mike. Asset sales would would provide more more headroom for that.

Us- Use of proceeds to reduce debt would would provide more headroom for that.

Okay. Then just lastly, can you talk about an update related to Norwood?

Then what is MPT's cost basis in that asset? I know there was some filing saying that it's about $350 million.

I was under the impression it was just above $200 million. Is that just additional dollars that MPT had to put into that asset to kind of weatherize it, which pushed that cost basis up into that mid-$300 million range?

Mike, as this is a lot of stuff going on with Norwood and various discussions with the state. We've made public statements, those are listed on our website, and that's where we'll leave it right now.

Great. Thanks.

Thank you very much for everyone's interest today. If you have any additional questions, please don't hesitate to reach out to us.

Thank you very much.