Thank you for being with us. My name is Regina, and I will be your conference operator today. I would like to welcome everyone to the Medical Properties Trust Fourth Quarter 2025 Earnings Conference Call. I will now hand the call over to Charles Lambert, Senior Vice President. Please proceed.

Thank you, and good morning. Welcome to the MPT conference call to discuss our fourth quarter and full year 2025 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 Williams, Senior Vice President of Operations and Secretary; and Jason Frey, 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 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 mpt.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 of you for joining us this morning on our fourth quarter 2025 earnings call. Before you hear from the rest of the team, I'll spend a few minutes discussing what we're seeing across our diverse portfolio of hospitals as well as a few recent strategic updates. Beginning with performance trends. Total portfolio EBITDARM coverage increased year-over-year to 2.6x. General acute operators delivered particularly strong performance with more than $130 million EBITDARM increase versus the same quarter last year. For the second consecutive quarter, post-acute care operators reported a $50 million EBITDARM increase year-over-year, led by a 15% improvement at Ernest Health, a 28% improvement at Vibra, and an 8% increase at Median. Finally, our behavioral health portfolio was down slightly year-over-year, driven by certain volume headwinds in the U.K. market and labor cost pressures in the U.S., which Rosa will elaborate on shortly. During the quarter, we continued to take decisive steps to strengthen our portfolio. Given the strong performance of its post-acute facilities over the past few quarters, we are pleased to enter into a new 20-year master lease agreement with Vibra. We capitalized on an opportunity to acquire a high-performing post-acute facility in California for approximately $32 million with a strong cap rate. More recently, we acquired a new post-acute care facility in Europe for EUR 23 million. We also continue to identify opportunities within the portfolio to achieve attractive returns that enhance our capital allocation flexibility moving forward. To that end, we sold 6 smaller properties during the quarter. Before turning it over to Rosa, I also want to acknowledge that 2025 marked our 20th anniversary as a publicly traded company. Throughout the past 2 decades, we have been guided by the same core principles, providing hospital operators with capital solutions that allow them to focus on patient care, acquiring high-value real estate to deliver attractive returns for our shareholders, and supporting the communities we serve around the world. These principles have stayed true as we've navigated periods of significant opportunities and challenges, and they continue to shape the strength of our business today. We are entering our third decade as a public company with strong conviction in our business model and a clear focus on strengthening our platform for the long term. We recently unveiled an updated brand identity, and we were able to acquire MPT as our stock ticker. Given the encouraging performance trends across the portfolio, we remain confident in reaching our goal of over $1 billion in annualized cash rent by year-end. Rosa?

Thank you, Ed. Entering 2026, I'm encouraged by the strength and steadiness we see across our global portfolio. Echoing Ed's comments, 2025 was a year in which we solidified our foundation for long-term sustainable performance. Our operators' discipline, coupled with our own structured approach to re-tenanting and portfolio positioning gives us confidence as we look ahead to 2026 and beyond. Our international portfolio today comprises 50% of our investments, and these operators continue to be a cornerstone of portfolio stability. In Germany, Median recorded its strongest quarter since entering the portfolio with quarterly EBITDARM increasing more than 20% year-over-year with occupancy at 90%. Improving reimbursement levels and growing orthopedic demand contributed to notable operational momentum that positions Median for continued strong performance in 2026. In the U.K., general acute operators such as Circle Health sustained strong performance in the face of an evolving health care landscape. As a result of NHS budget constraints impacting the behavioral health market, Priory remains focused on adjusting to shifts in referral patterns and strategically modifying service lines to meet market demand at certain of its facilities. Across Continental Europe, Swiss Medical Network reported solid year-over-year growth in hospital EBITDARM. Its new clinical collaboration with the Mayo Clinic enhances its long-term capabilities and international reputation. Additional operators such as HM Hospitales, eMDs, and Atos continue to produce steady performance trends. Turning to the U.S. portfolio. Ernest Health delivered double-digit growth in EBITDARM year-over-year, supported by strong performance of their inpatient rehabilitation facilities and expansion of inpatient rehab units within LTAC facilities. Ernest also successfully refinanced their 2026 term loan and revolver in Q4, extending maturities out to 2030 and compressing the rate, a significant credit enhancement. At LifePoint Behavioral, new leadership is implementing forward-looking program enhancements that will modernize the segment, control labor costs, and support a strong revenue mix throughout 2026. As Ed mentioned, we recently entered into a new master lease agreement with Vibra, who increased EBITDARM coverage 28% year-over-year in Q3, driven by strong earnings in the rehab division. Our other long-standing tenants such as Surgery Partners and pipeline continue to report healthy performance trends. Finally, our portfolio of recently transitioned tenants' rent continues to ramp, and we expect them to be at 100% contractual rent by the end of 2026. During the quarter, we entered into a new 15-year lease agreement with NOR Health Systems in California, which is expected to reach stabilized annual cash rent of $45 million in December, in line with the rent previously paid by Prospect for these facilities. HSA showed measured progress in Q4 with modest improvements in collections across its markets. Upcoming supplemental receipts and the expected implementation of the MEDITECH EMR system in Q2 are anticipated to support operations and facilitate cost savings. While HSA remains focused on improving cash collections, it's important to remember that HSA will finally be fully stand-alone operationally once the EMR system is implemented. We feel comfortable with the steps underway to drive revenue cycle management enhancements. Our team continues to carefully monitor performance across these new operators. In fact, just last week, members of our team visited the NOR and HSA Miami facilities, all of which had high patient activity. It's clear that efforts to bring back doctors and improve EMS turnaround times are already having a positive impact. While the facilities are generally clean and in good condition, each operator is actively undertaking projects to modernize the properties. Taken together, the consistent performance of our international assets, the steady execution of our core U.S. operators, and the ongoing ramp of our transition tenants provide us with a clear confident outlook heading into 2026. We expect 2026 to be a year of continued stabilization and increasing cash rents as our tenants capitalize on service line enhancements, reimbursement tailwinds, EMR modernization, and operational efficiencies gained throughout 2025. Our global portfolio is stronger, more diversified, and more resilient than it has ever been. We are confident in the long-term earnings power of these assets, and we remain steadfast in our commitment to generating stable, growing cash flows for shareholders. Kevin?

Thank you, Rosa. Today, we reported normalized FFO of $0.18 per share for the fourth quarter and $0.58 per share for the full year 2025. As mentioned in our press release this morning, we completed a restructuring transaction with Vibra in the fourth quarter, resulting in a new master lease agreement and collection of approximately $18 million in the form of a one-time rent payment for past obligations. In October, we received a $4 million payment of September rent from HSA. As a result of these cash receipts, normalized FFO was approximately $0.03 to $0.04 higher than it otherwise would have been for the quarter. In the fourth quarter, we entered into a new lease with NOR Healthcare Systems for the 6 California properties previously leased to Prospect. NOR is contractually scheduled to begin paying partial rent in June 2026 with a ramp-up to 100% of contractual rents in December of 2026. We plan to account for their revenue on a cash basis as well. G&A expense was lower year-over-year in the quarter, primarily driven by the lower stock compensation expense due to the change in fair market value of certain performance-based equity compensation. Finally, we recorded approximately $34 million of impairment charges in the quarter, the majority of which related to Prospect. From a cash flow perspective, we received approximately $70 million of net proceeds from the Prospect bankruptcy in the quarter, with a remaining investment of $60 million expected to be collected in 2026 as the bankruptcy process nears an end.

I just have a few general comments about our financial position and outlook, and then we can take any questions. First, a general reminder of our debt maturities and our options for refinancing and deleveraging. Our nearest maturity is a EUR 500 million unsecured notes issue due in October of this year. We are paying a rate of 0.99% on these notes, and so we'll, of course, maximize the time benefit from that rate. Our bank revolver and $200 million term loan will mature in June of 2027 after our presumed extension of this facility, and then our $1.4 billion unsecured notes issue matures in October 2027. We retain numerous options for refinancing maturing debt over the next 2 years. Without belaboring those options, which we have discussed previously, they include refinancing with secured debt, additional asset sales, and other transactions as the capital markets and our cost of capital continue to evolve. We are confident in these options because of our recent successes generating highly profitable sales of hospital real estate, achieving attractive terms on the $2.5 billion of secured notes we issued a year ago, the euro portion of which are now trading at premiums implying a 5-ish percent rate, and the successful 10-year secured financing of our German rehab portfolio in June of last year at a similar 5-ish percent coupon. Our carefully crafted covenants have provided plenty of headroom to be able to consider each of these potential options. As Ed mentioned, we announced a $150 million share repurchase plan last quarter that we used to repurchase a little less than 1% of our market cap through the end of the year. We also invested about $60 million in 2 attractively priced and well-performing post-acute rehabilitation facilities, which we intend to add to the respective master leases of 2 important long-term tenants. While these are relatively modest acquisitions, the acute and post-acute hospital real estate market continues to offer attractive growth opportunities, both in the U.S. and Europe that we will take advantage of as our cost of capital continues to improve. And with that, I will turn the call back over to the operator to queue any questions.

Our first question will come from Michael Diana with Maxim Group.

I'd like to talk a little about your facility recycling during the quarter. I think you mentioned you sold 6 small properties, and a surprise to me anyway, bought 2 properties. So maybe you could talk about those 8 properties, but also just more in general, what your view is on the recycling.

Sure, Michael. But let me first take the opportunity to thank you for picking up coverage on us and the time you spent with us to fully understand the company and our business model, and we certainly look forward to working with you. So the 6 properties that we sold were smaller properties. They were properties that were underperforming for the rest of the portfolio. We will continue to look at opportunities like that going forward. But also, we're in a position now where we can go back into the acquisition mode. We'll do it very selectively. We believe that the 2 properties that we acquired are very good investments and the opportunity for us to continue to support our existing tenants.

Our next question will come from the line of John Kilichowski with Wells Fargo.

Maybe if we could just start on the Prospect sales. If you could just kind of help me source of uses. I think you gave some helpful color in the opening remarks, but maybe just to tie it all together. Could you talk about the sales proceeds from the assets that have closed, the expectations of the asset under contract, and then maybe what's going to be above and beyond the DIP financing and where those proceeds will go?

So the only remaining transaction that's pending is the binding contract to acquire the Waterbury facility in Connecticut, and we expect that to close in this quarter. That will significantly finalize the major components of the Prospect bankruptcy. We expect proceeds that will come from that sale, along with collecting of the receivables that will probably take over the next 60 to 90 days, will fully pay the DIP financing. And as we announced previously, probably going back as many as 2 quarters, we've committed to a super secured DIP commitment that we may fund going forward that the proceeds from causes of action that is litigation that's being pursued by the litigation trust; we have first claim on those proceeds, and we remain highly confident, frankly, that the super secured DIP financing will be repaid from those proceeds.

That's helpful. And then maybe just jumping to your '26 rent target and the ramp from your legacy assets, legacy Steward assets, the $22 million that you got this quarter. I believe last quarter, we got some color on expectations looking forward. Are you able to provide any color on what you expect to receive in the first quarter of this year?

No, we're not yet giving guidance on quarterly or annual amounts for a couple of reasons. One is, as Kevin mentioned, we still have several fairly significant tenants that we are accounting for on the cash received basis. And so we continue to watch that rent ramp. It has ramped in accordance with the contract that we entered into with those tenants going on 18 months ago now. And I think we said in our press release this morning that virtually all of them are fully paid as we sit here today. Now I'll qualify that with the 2 very small tenants that in recent quarters we've also called out roughly 3% of the total replacement rents are not yet paying rent. But nonetheless, and as Ed pointed out, we continue to expect through 2026, by the end of 2026, we'll be at an annualized run rate of cash collections exceeding $1 billion.

And John, to add to that question with Steve, there was one payment from HSA that was received last quarter, which was for the previous quarter. Kevin discussed that. The next significant increase will occur when NOR begins paying rent in June, I believe.

Our next question will come from the line of Austin Wurschmidt with KeyBanc.

This is Vikram Garewal on for Austin. Just one for me. Can you provide us with some additional color on the Vibra restructuring? Specifically, what was previous and what is the new cash rent expected from Vibra?

No, we haven't detailed that out. I'll remind you for the last couple of years, we've referred to this tenant kind of vaguely as the 1% tenant that we've been restructuring. That was consummated in the fourth quarter, and therefore, the collection of $18 million of rent that was due, although not paid pending restructuring. And going forward, Vibra is a significantly stronger tenant for us. And I'll just again reiterate based on your question that there's no impact on previous rental revenue because we haven't been recognizing it because Vibra has been on the cash basis. I don't know if that addressed your question.

As a part of answering that question, Vibra refinanced all of their debt. So as Steve said, they're in a much better position today than they have previously been. A couple of their properties are actually now leased to Select Medical and rather than Vibra from our standpoint.

Our next question will come from the line of Michael Carroll with RBC Capital Markets.

Sorry. I wanted to stay on the Vibra transaction. I just wanted to confirm, in the press release, it sounded like the $32 million acquisition was leased to Vibra. I mean, did you buy that from Vibra? And if so, why was that included in this transaction?

We did buy it from Vibra, and it is a great facility that we feel very good about and glad to have had the opportunity to acquire.

Okay. And then the cash went to Vibra for that specific deal then?

Correct. And also, Mike, just to clarify a little bit, the $18 million, we've actually had on our books a significant portion of that since this time last year when Vibra made a deposit of $20 million. And of that, about half of it we held in reserve to apply to rent. So your point is well taken. Yes, we provided proceeds by virtue of acquiring this asset. But Vibra itself has put in probably upwards of $70 million over the course of this restructuring.

And Vibra actually used the proceeds from this sale to pay off debt that they had.

Our next question will come from the line of Mike Mueller with JPMorgan.

Yes, a couple of questions. I guess on the first one, for this acquisition and the other acquisition, can you talk about pricing, I guess, the cap rates and coverages? And then for the second question, maybe just a little bit bigger picture. I know you bought some stock back in the quarter, but you also went through all the debt maturities coming due over the next couple of years. How are you thinking about today kind of buybacks versus delevering?

Let me address the first part of your question, Mike. The coverage on both acquisitions has been very strong, and the cap rates are quite attractive. While it's not our practice to disclose details about each individual property, I can confirm that both acquisitions are solid in terms of coverage and cap rate from our perspective.

Going forward, Mike, on the balance sheet, we invested what, roughly $25 million in our own stock over the quarter, relatively modest amount. We'll continue to evaluate when it's appropriate to be in the market with the stock. We have multiple opportunities that I tried to summarize very briefly in my prepared remarks to address the upcoming maturities and have a high level of confidence that we'll have some attractive options for addressing that, obviously, beginning this year as we have the very, very low rate euro issuance coming due in October.

Our next question will come from the line of Vikram Malhotra with Mizuho.

I guess two ones. One, just bigger picture. You mentioned the acquisitions. I'm just wondering sort of as the portfolio stands today, whether it's just noncore or international, can you just talk about potential sales and give us an update on like how the buyer pool has shaped up? What sort of capital is still interested in owning hospital real estate?

So Vikram, if I understood your question correctly, there still continues to be a very strong market for people interested in acquiring our properties. We get calls often. But where we are today, we are much more likely to be in an acquisition mode than a disposition mode. We'll do dispositions as we review various items and think it's appropriate for us. But we are more in an acquisition mode.

Regarding the acquisition point, I’m curious about the opportunity within the different sub-asset classes, particularly in post-acute and behavioral settings. Are there specific focus areas or types of assets you are considering? I wonder if there’s a potential shift in the focus on the types of healthcare or hospital settings for acquisitions.

Sure. Our focus will continue to be general acute care, which it has been through the vast majority of the life of medical properties. But we will continue to look at post-acute, but that's primarily almost exclusively in the rehab sector, which we've been very strong on since the inception of the company. We're still big believers in behavioral. In the U.S., behavioral softness has not come from lack of demand, but lack of ability to have nurses and staff at each of the facilities. In the U.K., it's much more of a funding issue with NHS. If you follow the U.K., you'll know that the need is there. The desire is there. It's just more of a political funding standpoint. Still believers in both sectors, but probably the biggest acquisitions we'll make today will be in general acute care, followed by post-acute care, being rehab.

Our next question will come from the line of Farrell Granath with Bank of America.

This is Farrell Granath. I just wanted to also dig in a little bit more on your acquisitions. Just when thinking about Europe versus the U.S., especially now that we've seen some pressures just on public pay with headlines and reimbursement rates. Does that weigh in on how you're evaluating your pipeline? Or can you give a quantifiable qualitative of how you think about your pipeline in both regions?

That's a good question, Farrell. Currently, we have a balanced presence, with 50% of our operations in the United States and 50% internationally. We maintain that the United States offers the best healthcare globally and will keep our focus here. However, we find the international landscape to be less politically charged. Therefore, we are very positive about our investments abroad. We're operating in nine different countries and will continue to invest in those markets while also exploring opportunities for expansion in Europe and other regions where we currently do not have a presence. We remain optimistic about the overall state of healthcare in the United States and believe that while there may be minor fluctuations, we do not anticipate significant changes in reimbursement rates in the U.S.

And I guess also on that, when thinking about the people who are selling, are these in the properties that you're acquiring, are these marketed deals? Are you having reverse inquiries? Are these also just operators that you have past business with? Just curious how that pipeline is building out.

Yes, it's probably 50% or slightly more of people that we've already done business with, our existing tenants or tenants that had formally been our tenants. There's still a very strong pipeline of people who know who we are, that are looking to make acquisitions and to use our type of funding for those acquisitions. I would say most of the deals that come to us outside of our existing tenants are marketed transactions.

Farrell, I want to highlight that we completed a limited amount of $60 million in total, which resulted from several quarters of negotiation and exploration. This doesn't only reflect activity for the quarter. We are currently being very selective. We hope to see an improvement in our cost of capital. It's important to note that the $60 million we transacted in two transactions does not represent the overall size and vibrancy of the market. We had many more transactions available for evaluation, but we are choosing to be very selective.

Our next question is a follow-up from the line of Michael Carroll with RBC Capital Markets.

I guess, Ed or Rosa, I wanted to follow up and circle back on the comments related to HSA. Can you remind us, is that operator cash flow positive today with the rent fully ramped? I know that you indicated that last quarter that their coverage was above 1 on the fully rent ramps, but obviously, it takes time for cash collections to pick up to equal that.

Yes. The cash collections, as Rosa pointed out, are not where we would like them to be. However, considering their starting point, especially with the acquisition of the Steward properties, we are quite pleased with their progress. Of course, we want to see improvement. We believe that in the second quarter, they will achieve full independence by acquiring the MEDITECH license and making significant strides in cash collections. We are optimistic about their potential to perform even better. Currently, they maintain a full rent coverage of 1x.

Okay. And then last question for me. Does HSA or NOR still need working capital loans from MPW, or have they moved away from relying on those specific loans and can now manage with their own balance sheets?

Yes. We have not provided any additional working capital loans for either one of those entities. We have provided HSA with funding to help them acquire the MEDITECH license and with NOR, the last funding that we were participating in those were left over Prospect bills. Regina, thank you very much. And again, thank all of you for listening today. And as always, if you have any additional questions, please don't hesitate to reach out to us. Thank you very much.

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