Medical Properties Trust Q1 Earnings Call Highlights

Key Points

• Portfolio health: Total portfolio EBITDARM coverage was steady at 2.5x with standout post-acute gains (MEDIAN, Ernest, Vibra), and management reiterated confidence in reaching more than $1 billion in annualized cash rent by year-end via rent ramps — but behavioral health, particularly the U.K. Priory operations, remains pressured by NHS reimbursement cuts.
• Financials and balance sheet: Q1 normalized FFO was $0.14 per share (boosted by one-time items including a $44M U.K. tax benefit), while near-term debt maturities include €500M due Oct 2026, a $200M term loan due Jun 2027 and $1.4B due Oct 2027 as management targets modest, accretive deals.
• Tenant and restructuring updates: HSA has improved collections to roughly 82% with Conifer onboarding and a MEDITECH conversion underway (goal: mid-90s collections), Prospect completed hospital sales and MPT's DIP loan was about $60M secured primarily by litigation proceeds expected to cover repayment.

Medical Properties Trust NYSE: MPT executives said the company’s hospital portfolio produced steady coverage levels in the first quarter of 2026, with strength in post-acute operators offsetting continued pressure in behavioral health, particularly in the U.K. Management also reiterated confidence in reaching a year-end goal of more than $1 billion in annualized cash rent, supported by rent ramps tied to recently transitioned tenants.

Portfolio performance and rent ramp progress

Chairman, President and CEO Edward K. Aldag Jr. said total portfolio EBITDARM coverage was steady year-over-year at 2.5x. He highlighted “standout results” in post-acute, where portfolio EBITDARM increased by about $80 million year-over-year, led by a 24% increase at MEDIAN, a 16% increase at Ernest Health, and a 61% increase at Vibra following a new 20-year master lease signed in late 2025.

Aldag said general acute performance was “largely stable,” with EBITDARM increasing nearly $40 million year-over-year. He added that behavioral health continues to face “two entirely separate challenges” in the U.S. and U.K., despite strong demand. In the U.S., he pointed to staffing shortages, while in the U.K. he cited demand being dampened by National Health Service (NHS) funding pressures.

On rent collections and transitioned tenants, Aldag said tenants across Florida, Texas, Arizona, and Louisiana were “fully current on rent due through April.” He noted that Quorum and HonorHealth reached fully stabilized rents in the third quarter of 2025, while HSA ramped to 75% in March with MPT still expecting “100% of monthly payments from HSA beginning in October.” Aldag said management remains confident in reaching “over $1 billion in annualized cash rent by year-end.”

International operations: strength in Germany and Switzerland, uncertainty in U.K. behavioral

Senior Vice President of Operations and Secretary Rosa Williams said international assets have been a “meaningful stabilizing force.” In Germany, she said MEDIAN delivered one of its best operating periods, supported by high occupancy, improving reimbursements, and sustained demand across orthopedic and other rehabilitation services. She also said Swiss Medical Network expanded through strategic acquisitions and outpatient growth focused on integrated care models.

In the U.K., Williams said Circle Health performed well in general acute care, benefiting from private-pay utilization and higher-acuity case mix. However, she said Priory continues to see record demand for inpatient mental health services while facing reimbursement reductions from the NHS. Williams said Priory is responding with “service line optimization, cost management, and selective repositioning of certain facilities.” She said MPT and Priory view the situation as temporary, though “the timing and degree of any recovery is unpredictable.”

Williams also said MPT revised allocated central costs used for Priory’s facility-level reporting, which reduced trailing 12-month coverage by 40 basis points for Priory and by 20 basis points for the behavioral health property type, with no impact on consolidated portfolio coverage.

U.S. tenant updates: HSA initiatives, NOR improvement projects, and operator trends

Williams said HSA management is focused on liquidity and collections. She noted that in April, HSA “engaged and fully onboarded Conifer to manage its revenue cycle operations,” and that HSA is moving to its own MEDITECH electronic health record system. She said HSA recently obtained equipment financing and has begun ordering replacement equipment. Williams also referenced contingent approval by the Centers for Medicare & Medicaid Services (CMS) for Florida’s Medicaid Directed Payment Program, which HSA expects will significantly improve its net benefit versus 2025 and strengthen liquidity.

Williams outlined a slate of capital projects at HSA, including a new parking deck, structural and electrical recertifications, wound care improvements, elevator upgrades, roof restorations, and equipment replacements.

On NOR, Williams said operations were stable in the first few months, with EBITDARM already exceeding its full contractual rent obligation that takes effect at year-end. She said inpatient admissions were ahead of the prior year and that NOR is adding service lines and restarting construction of a new emergency department at Culver City. The new ED, she said, is expected to be completed in summer 2027.

Across other U.S. operators, Williams said Ernest Health remained a post-acute standout and plans to convert all six MPT-owned LTAC facilities to inpatient rehabilitation facilities by the end of 2026. She said Vibra’s EBITDARM coverage improved to 3x following balance sheet and portfolio actions, with California assets performing particularly well. She added that LifePoint’s performance moderated from 2024 but remained supported by admissions and acuity.

Financial results and balance sheet commentary

Senior Vice President, Controller and Chief Accounting Officer Kevin Hanna reported normalized FFO of $0.14 per share for the first quarter, “in line with our expectations.” He said results were approximately $0.03 to $0.04 per share higher than they otherwise would have been due to one-time cash rent receipts previously disclosed. Hanna also said G&A expense fell year-over-year largely due to lower stock compensation expense tied to changes in fair market value of certain cash-settled awards in 2024 and 2025.

Hanna added that MPT moved seven additional legal entities into its U.K. restructure effective in the first quarter, which resulted in a one-time $44 million tax benefit.

Executive Vice President and CFO Steven Hamner said the balance sheet was “relatively unchanged” from the fourth quarter. He identified the nearest maturity as €500 million of unsecured notes due in October 2026 with a 0.99% coupon. He also cited a $200 million term loan maturing in June 2027 (as well as the revolver, subject to an extension right) and $1.4 billion of unsecured notes maturing in October 2027. Hamner said the company continues to plan around “ample security value and indenture flexibility” to maximize deleveraging and interest coverage as revenue grows, and reiterated that near-term acquisitions are expected to be “modest, strategic, and accretive.”

During the quarter, Hamner said MPT completed a previously disclosed €23 million hospital acquisition in Germany and sold “two small hospitals” in the U.S. He added that cash rent collections from the hospitals re-tenanted in September 2024 continued to be paid under the contractual ramp, except for small Ohio and Pennsylvania facilities previously discussed. Based on April cash rent, he said annualized rent for the re-tenanted facilities (net of assets sold) represented about 74% of the contractual cash rent required under the prior master lease at the time of the September 2024 transition, rising to an expected 98% once HSA reaches fully stabilized cash rent in the fourth quarter of 2026. The remaining 2% relates generally to the Ohio and Pennsylvania facilities.

Hamner said MPT received no rent from those tenants in the first quarter and that it is “increasingly unlikely” they will return to profitability in the near term, in part because regulators have not granted approvals to reopen. As a result, he said MPT recognized an impairment of its loan collateral related to the two facilities.

Prospect bankruptcy update and Q&A highlights

Hamner said Prospect completed sales of its remaining hospitals and continues to collect receivables, with proceeds expected to help repay MPT’s debtor-in-possession (DIP) loan. He said MPT’s DIP loan balance was approximately $60 million at quarter-end and is secured primarily by litigation claim proceeds, which as of March 31 were estimated to “substantially exceed” MPT’s DIP loan commitment. Hamner said the DIP loan accrues interest at “all-in rates approximating 16%,” though MPT will recognize income only as received.

During the Q&A, Hamner confirmed to JPMorgan analyst Michael Mueller that the previously discussed $160 million target tied to the Steward pool remains the reference point for the 74% and 98% cash collection percentages. On refinancing, Hamner said the company was not in a position to predict coupons, while citing recent secured lending data points including a roughly 5%+ 10-year coupon on German portfolio financing about a year ago and secured senior notes trading in the 6% to 7% range, while emphasizing he was not predicting those levels for future refinancing.

RBC Capital Markets analyst Michael Carroll asked about HSA’s financial position. Aldag said HSA’s EBITDARM performance remained “exceptionally well,” generating about 3x coverage on a current cash rent basis, but said cash collections still need improvement. Aldag said HSA’s collections improved from about 78% to about 82%, with a goal of reaching the 90s. He also said MPT expects HSA to use some DIP funding to repay MPT’s asset-based lending facility and said HSA is pursuing a permanent ABL to replace MPT’s facility.

Asked about Priory’s coverage outlook, Hamner said management is “hopeful that we’re near the bottom” at 1.6x trailing 12-month EBITDARM coverage, while noting there is “no assurance” and no ability to predict timing or pace of any NHS reimbursement recovery. Aldag characterized the situation as largely political and said it “could be fixed overnight,” while not suggesting that it will be.

Wells Fargo analyst John Kilichowski asked about impacts from the “one big beautiful bill.” Aldag said, broadly, operators do not believe it will have a negative effect overall, and he said HCA does not expect a significant negative effect on any of its facilities. Kilichowski also asked about tenant lending; Hamner said working capital lending in the quarter was limited, including a sub-$1 million loan to the small Pennsylvania tenant, about $13 million funded under a secured loan for HSA’s MEDITECH conversion, and about $12 million funded under a second secured loan for capitation liabilities at Prospect’s California hospitals after bankruptcy.

Bank of America’s Farrell Granath asked about dispositions including Waterbury. Hamner said the “broader Waterbury transaction was completed in the quarter,” with the estate continuing to collect receivables for several months and those proceeds expected to repay the DIP loan. On future dispositions, Aldag said MPT does not have a list of properties being actively marketed aside from “a few remaining Steward closed facilities.”

About Medical Properties Trust NYSE: MPT

Medical Properties Trust, Inc NYSE: MPT is a real estate investment trust (REIT) that acquires, owns and finances hospitals and other healthcare facilities. Founded in 2003 by Edward K. Aldag Jr., the company’s business model centers on providing real estate capital to healthcare operators through long-term leases, sale-leaseback transactions, build-to-suit developments and mortgage financing. By specializing in healthcare real estate, MPT aims to deliver steady rental income and asset-based returns while enabling operators to access capital for clinical operations and growth.

The company’s portfolio primarily comprises acute care hospitals, inpatient rehabilitation hospitals, long-term acute care facilities, behavioral health centers and other specialty hospitals.

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