Thank you for standing by. My name is Bailey and I will be your conference operator today. At this time, I would like to welcome everyone to the Medical Properties Trust First Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise during this 60-minute call. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star and one again. Thank you. I would now like to turn the call over to Charles

Lambert, Senior Vice President. Please go ahead. Financial results with me today and Jason Fry. Today is as of this financial measures to the most directly. Joined again today by Steve, Kevin,

Rosa, and team. I'll spend a few minutes discussing the state of the market and a few recent strategic updates good environment it's important sounding the macro economy health care has historically proven to be one of the most recession resistant industries across our portfolio operators continue to report strong results with increasing volumes and steady coverage the impacts of terror only serve to reinforce the importance of mpt's business model when hospitals need access to affordable capital solution actual flexibility and redirect those funds into patient care, continue playing that role in this critical economic environment. In February, we issued more than $2.5 billion of seven-year secured bonds at a blended coupon rate of approximately providing sufficient tenants, continues to ramp operations at facilities around the country. Broadly speaking, we remain highly encouraged by the volume improvements being reported across these locations. New operators are taking to upgrade facilities. And importantly, all new operators, except for Insight, who owed less than $100,000, were current on rent through the first quarter. In Ohio, Insight Health had been making considerable progress turning around performance at two facilities in Trumbull County. Efforts were interrupted by disputes between Stewart Healthcare's advisors and Insight regarding the distribution of cash collections from Insight's revenue under the terms of the Transition Services Agreement. We're working with Insight and government official operations at these facilities as soon as possible before turning it over to Rosa, in line with the terms of our global settlement agreement with Prospect and its other creditors that the bankruptcy court approved in March. Prospect and its advisors are in the process of marketing the prospect assets. Operators are making across most markets the steady contributions from our stabilized or confident in our ability to reach total annualized cash rent of more than a billion dollars once our new tenants are fully ramped. As we continue with this progress to opportunities for accretive growth and increasing

across our portfolio. Overall, operator trends remain largely consistent with our observations over the past few quarters. As publicly traded operators have recently reported in the first quarter of 2025, hospitals have produced strong revenues driven by reimbursement rate increases and admission trends. We continue to see strong growth in admissions every year EBITDARM coverage across asset types, driven by improved volumes and strategic expenses. I'll begin with the new tenants in our transitional portfolio, jumping through the 4th, 26th. In Louisiana, commenced rent payments is scheduled in March, trended up, particularly in South Florida, driven by top-line growth on higher volumes. In Louisiana and Texas, HSA remains focused on expanding inpatient capacity, re-engaging key physicians, remains engaged in an in-the-market and upgrading facilities, executing a cap at $60 million improvement, operates two facilities in West Texas, has committed to recruiting physicians and staff to recapture volumes, ramping up new service agreement to assume ownership of stewards' remaining IT and revenue cycle transition service agreements, operating one MPT behavioral health facility in Phoenix at the facility and now have a license for 127 beds. With 30 beds open so far, they are actively adding beds on a regular basis within the next few months. They took over operations at Sharon Regional in Pennsylvania and reopened the facility in March. Tenor is now executing an 18-month facility and to facilitate this plan, recently secured new financing from a local community entity and beginning with Europe. In the U.K., three of the operators in MPT's portfolio have been nominated for Health Investors Private Hospital Group of the Year, Circle Health, Priory, and Ramsey. continues to benefit from increased private medical insurance utilization. On these market tailwinds, Circle is investing in innovative technology such as robotics and continues to report strong performance driven by increasing surgical volumes being addressed in the private sector. Mental health care services has never been greater within the U.K., and Priory, the largest independent mental health care provider in the U.K., has maintained steady performance based on strong reimbursement trends and increased patient acuity company median 2024 performance is largely attributable to an improving reimbursement rate environment has benefited from a combination of continued cost optimization efforts expected to increase with medical continue to grow its integrated care model with the addition of a Second Care region, with NPT invested approximately 50 million Swiss francs in acquisition of a strategically valuable general acute facility. Validated EBITDAHRM coverage remains excellent at 2.1 times. Legacy IRFs are performing very well, and newer IRF developments are moving closer to fully ramped capacity. Given the success of its first inpatient rehab unit at the Provo LTAC, Earnest is pursuing plans to open two more inpatient rehab units at the Post Falls and Billings LTACs in 2025. Continues to report strong top-line revenue growth driven by increased admissions, particularly at Connors where trailing 12-month admissions increased 17% outpatient by operated by surgery partners. These facilities have performed exceptionally well. With combined coverage, MPT is clearer than ever before, producing steady or improving performance as expected moving forward.

This morning we reported a gap net loss of B25. It is worth pointing out that first quarter net loss and normalized FFO when compared to the fourth quarter of 20, partial quarter impact of our February debt refinancing transactions. Cash rent payments, we projected a quarterly impact of higher interest expense resulting from our refinancing transactions. From a change in the fair market value equity compensation, $7. Actually, $73 million in impairments and fair market value adjustments to our investment ultimately differ from these book values. $11 million as the government continues to limit reimbursement in EVIS.

That's the basically of the February 6th. To point out again that it was a significant culmination of two years of care of net lease. I'll describe one detail of this refi to build some additional cushion for the covenant that measures our ratio of unencumbered assets. We had not completed our evaluation. We wanted this cushion revolver as the effect of increasing that cushion. Because as on our existing continues to perform including annual inflation. The remaining three quarters of 2025, $4 million received more than $23 million, than $90 million annualized. To continue growing, annual cash rents of $160 million from these hospitals include no revenue. Revenue or proceeds will, of course, be available to further add to our operating and balance. That with the balance level of near-term maturities and liquidity, we have the freedom to be patient. while even if we yet again plan for these infrastructures, trying to identify hospitals that we believe are critically necessary to performance and public support is what we expected. And from a financial perspective, MPT as landlord has gone above and beyond to demonstrate our long-term commitment to keeping these hospitals and their own finances to government officials. And we see working out of public view, we did not expect. And what is virtually inexplicable in front of these efforts to keep the hospital. Managers of the steward bankruptcy process have paid professional fees now approaching $400 million. They are collecting from Medicare, Medicaid, for medical, surgical, and other treatment services that the new operator is not remitted to the operator. Most recently, another of the replacement operators was notified that the bankrupt estate is seeking to retain the Medicaid supplement. Managing the steward

At this time, I would like to remind everyone, in order to ask a question, press star and then the number 1 on your telephone keypad. Please limit to one question and one follow-up. Your first question comes from the line of Michael Carroll with RBC Capital Markets. Please go ahead.

Steve, I wanted to follow up on your, I guess, your prepared remarks, your last two comments. Do you think that there is risk to the steward transitioned assets, those new operators, and being able to have the rent ramp up versus what you expect, given your comments regarding the issues in the steward bankruptcy process and them not being able to collect the payments that are potentially owed to them?

No, I don't think so for a couple of reasons. Number one, I pointed out the Ohio situation, and I think we had already described it. The point really was we are hopeful the transition will be, but we think that will be complete.

Okay, and then can you talk about the $40 million investment? Was that made during the quarter? What type of asset did you get back from that? Are you getting rent on that asset now, and or do you plan on selling that asset in the near term?

Represent was not necessary other than unable to mark the original transaction.

The vast majority of those, Mike, we will collect rent on.

Okay. And then just last from you, were there any other investments that occurred in the quarter? I didn't see the supplemental section that highlight your investments in the sub this time around. and your debt seemed a little bit higher than what I would have expected. So is there any other cash outflows that we should be aware of that kind of explain some of that?

Relatively modest investment in an additional hospital in Switzerland with Infracore.

So just that $40 million deal and the Infracore deal?

And as part of...

Your next question comes from the line of Georgie Dinkoff with Mizuha Securities. Please go ahead.

Hi, this is Georgie on for Vikram. Can you just talk sort of what are you monitoring on the regulatory side and any potential Medicaid cuts? Like what are your expectations in a scenario where you see some severe budget cuts?

As you know, Medicare doesn't just be better served if it went to hospital. Have any of our tenants that are nervous about any potential change?

I squeeze a second question. Do you expect to provide any loans to any of the operators? And do you currently have any tenants on your watch list that you're closely monitoring?

To make any loans, we...

Great. Thank you for taking my question.

Your next question comes from the line of John Kilikowski with Wells Fargo. Your line is open.

Good morning. Thank you. My question is this on two operators. You mentioned no operators on the watch list, But I know that there were a couple of situations we were watching. There was an operator in Columbia dealing with some government holding back of reimbursement. And then there was another one that was 1% of assets that you had gotten $10 million for last quarter. But I think that was a one-time chunk. Could you give some color on how those processes are going?

So the 1% and they had their best – they believe they're very much operations are back. There is a political trying to get some health care –

Okay, thank you. And then maybe just on prospect following the court approval, how do you expect that process to go, I guess, as far as timing is concerned?

A bit different, or a lot different, I should say, than the steward process went. We expect that the new, the potential, can happen after that.

All right. Thank you.

Your next question comes from the line of Omoteo Okusana with Deutsche Bank. Your line is open.

Yes. Good morning, everyone. First of all, just a shout-out to Rosa. I'm always impressed with all the details she gives in the operational overview. I always find that very helpful. In terms of the cash ramp-up for the transitional tenant, could you just give us an overview of how exactly that works in terms of the arrangement that they transfer kind of all their excess cash flow to kind of ramp up to that $40 million a quarter? Is there some type of set math of, you know, based on how much they earned that quarter, how much they have to kind of pay you? Just trying to understand how that works.

Yeah, Tayo, it's actually a percentage of the rent, not based on revenue or at the beginning, and each lease is slightly different. They go from $25 million.

Gotcha. Okay, so that's helpful. And then in terms of, again, at March 31st, the drawdown on the line to kind of make sure you guys were okay with the covenant, just curious now that you've kind of, you know, you've kind of settled in with the write-downs, you know, associated with prospects, is that something you would expect to occur again, you know, at the end of a quarter? or now that you've kind of solidified what your write-down numbers are, you kind of have much more sense of what your coverage is and you may not have to do that going forward?

Well, in retrospect, Talia, we didn't have to do it even at the end of the quarter.

That's helpful. Thank you.

Thank you. And I will now turn the call back over to Ed Aldag for closing remarks.

I've reflected on the different reactions and actions of the meeting. It was obviously very painful. the patients or some of the real heroes by name and some of those that I don't know their names wasn't working obviously didn't have much time starting in early September period of time he's an outstanding person and a terrific mediator and we appreciate all that he did here and deputy attorney general Jim Donahue to find solutions in Sharon Pennsylvania Jim and Judge Isker and I I spent many hours late into the night and the holidays working to do what we could for Sharon. Worked together to find funding for the hospital there in Sharon. The commitment to that community is truly second to none in her willingness to work with MPT. Senator Marino reached out to me to work with MPT to find solutions for the two facilities there. Senator Marino has been a breath of fresh air and a real pleasure to work with, and we both are working very hard to keep these two hospitals in Ohio open. In Arkansas, while I don't know the names of the state officials, without exception, the Attorney General offices, the Departments of Health, and others have truly been can-do people. They work with us and Judge Isker to ensure their community hospitals stayed open. They offered help at every turn, not roadblocks. I'm truly sorry I don't know their names to give them the credit they deserve. There have been people with personal agendas in other states, people who haven't wanted to let a crisis pass without using it for their benefit. Truly, the vast majority of the people that I came in contact with during this whole process are the true unsung heroes, and it's been my honor to work with each and every one of them. From this point, and again, we thank you all for being with us today, and if you have any additional questions.

Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect.