10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-32559

Commission file number 333-177186

MEDICAL PROPERTIES TRUST, INC.

MPT OPERATING PARTNERSHIP, L.P.

(Exact Name of Registrant as Specified in Its Charter)

MARYLAND DELAWARE	20-0191742 20-0242069
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification No.)

1000 URBAN CENTER DRIVE, SUITE 501 BIRMINGHAM, AL	35242
(Address of principal executive offices)	(Zip Code)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (205) 969-3755

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒  (Medical Properties Trust, Inc. only)	Accelerated filer	☐
Non-accelerated filer	☒  (MPT Operating Partnership, L.P. only)	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.001	MPW	The New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 3, 2019, Medical Properties Trust, Inc. had 394,424,343 shares of common stock, par value $0.001, outstanding.

EXPLANATORY NOTE

This report combines the Quarterly Reports on Form 10-Q for the three months ended March 31, 2019 of Medical Properties Trust, Inc., a Maryland corporation, and MPT Operating Partnership, L.P., a Delaware limited partnership, through which Medical Properties Trust, Inc. conducts substantially all of its operations. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “our company,” “Medical Properties,” “MPT,” or “the company” refer to Medical Properties Trust, Inc. together with its consolidated subsidiaries, including MPT Operating Partnership, L.P. Unless otherwise indicated or unless the context requires otherwise, all references to “our operating partnership” or “the operating partnership” refer to MPT Operating Partnership, L.P. together with its consolidated subsidiaries.

MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.

AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED March 31, 2019

Table of Contents

	Page
PART I — FINANCIAL INFORMATION	3
Item 1 Financial Statements	3
Medical Properties Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018	3
Condensed Consolidated Statements of Net Income for the Three Months Ended March 31, 2019 and 2018	4
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018	5
Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2019 and 2018	6
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018	7
MPT Operating Partnership, L.P. and Subsidiaries
Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018	8
Condensed Consolidated Statements of Net Income for the Three Months Ended March 31, 2019 and 2018	9
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018	10
Condensed Consolidated Statements of Capital for the Three Months Ended March 31, 2019 and 2018	11
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018	12
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.
Notes to Condensed Consolidated Financial Statements	13
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3 Quantitative and Qualitative Disclosures about Market Risk	31
Item 4 Controls and Procedures	32
PART II — OTHER INFORMATION	33
Item 1 Legal Proceedings	33
Item 1A Risk Factors	33
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3 Defaults Upon Senior Securities	33
Item 4 Mine Safety Disclosures	33
Item 5 Other Information	33
Item 6 Exhibits	34
SIGNATURE	35

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

	March 31, 2019			December 31, 2018
(In thousands, except per share amounts)	(Unaudited)			(Note 2)
Assets
Real estate assets
Land, buildings and improvements, intangible lease assets, and other	$	5,394,092		$	5,268,459
Mortgage loans		1,214,780			1,213,322
Net investment in direct financing leases		684,547			684,053
Gross investment in real estate assets		7,293,419			7,165,834
Accumulated depreciation and amortization		(498,915	)		(464,984	)
Net investment in real estate assets		6,794,504			6,700,850
Cash and cash equivalents		995,548			820,868
Interest and rent receivables		24,788			25,855
Straight-line rent receivables		243,556			220,848
Equity investments		506,123			520,058
Other loans		365,402			373,198
Other assets		301,532			181,966
Total Assets	$	9,231,453		$	8,843,643
Liabilities and Equity
Liabilities
Debt, net	$	4,023,568		$	4,037,389
Accounts payable and accrued expenses		188,956			204,325
Deferred revenue		9,979			13,467
Obligations to tenants and other lease liabilities		118,474			27,524
Total Liabilities		4,340,977			4,282,705
Equity
Preferred stock, $0.001 par value. Authorized 10,000 shares;    no shares outstanding		—			—
Common stock, $0.001 par value. Authorized 500,000 shares;    issued and outstanding — 391,839 shares at March 31, 2019 and    370,637 shares at December 31, 2018		392			371
Additional paid-in capital		4,803,672			4,442,948
Retained earnings		141,427			162,768
Accumulated other comprehensive loss		(67,892	)		(58,202	)
Treasury shares, at cost		(777	)		(777	)
Total Medical Properties Trust, Inc. Stockholders’ Equity		4,876,822			4,547,108
Non-controlling interests		13,654			13,830
Total Equity		4,890,476			4,560,938
Total Liabilities and Equity	$	9,231,453		$	8,843,643

See accompanying notes to condensed consolidated financial statements.

3

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Net Income

(Unaudited)

	For the Three Months Ended March 31,
(In thousands, except per share amounts)	2019			2018
Revenues
Rent billed	$	108,598		$	128,011
Straight-line rent		20,651			15,791
Income from direct financing leases		17,280			17,681
Interest and other income		33,925			43,563
Total revenues		180,454			205,046
Expenses
Interest		50,551			57,023
Real estate depreciation and amortization		33,352			35,802
Property-related		3,066			2,184
General and administrative		23,451			17,818
Total expenses		110,420			112,827
Other income (expense)
Gain on sale of real estate, net		—			1,467
Earnings from equity interests		3,720			3,271
Other		204			(4,739	)
Total other income (expense)		3,924			(1	)
Income before income tax		73,958			92,218
Income tax benefit (expense)		2,333			(1,175	)
Net income		76,291			91,043
Net income attributable to non-controlling interests		(469	)		(442	)
Net income attributable to MPT common stockholders	$	75,822		$	90,601
Earnings per common share — basic and diluted
Net income attributable to MPT common stockholders	$	0.20		$	0.25
Weighted average shares outstanding — basic		380,551			364,882
Weighted average shares outstanding — diluted		381,675			365,343
Dividends declared per common share	$	0.25		$	0.25

See accompanying notes to condensed consolidated financial statements.

4

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	For the Three Months Ended March 31,
(In thousands)	2019			2018
Net income	$	76,291		$	91,043
Other comprehensive income:
Unrealized loss on interest rate swap		(3,772	)		—
Foreign currency translation (loss) gain		(5,918	)		16,088
Total comprehensive income		66,601			107,131
Comprehensive income attributable to non-controlling interests		(469	)		(442	)
Comprehensive income attributable to MPT common stockholders	$	66,132		$	106,689

See accompanying notes to condensed consolidated financial statements.

5

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(Unaudited)

	Preferred				Common
	Shares		Par Value		Shares		Par Value		Additional Paid-in Capital			Retained Earnings (Deficit)			Accumulated Other Comprehensive Loss			Treasury Stock			Non- Controlling Interests			Total Equity
Balance at December 31, 2017		—	$	—		364,424	$	364	$	4,333,027		$	(485,932	)	$	(26,049	)	$	(777	)	$	14,572		$	3,835,205
Net income		—		—		—		—		—			90,601			—			—			442			91,043
Cumulative effect of change in accounting    principles		—		—		—		—		—			1,938			—			—			—			1,938
Foreign currency translation gain		—		—		—		—		—			—			16,088			—			—			16,088
Stock vesting and amortization of stock-based    compensation		—		—		271		1		1,855			—			—			—			—			1,856
Redemption of MOP units		—		—		—		—		(816	)		—			—			—			—			(816	)
Distributions to non-controlling interests		—		—		—		—		—			—			—			—			(620	)		(620	)
Proceeds from offering (net of offering costs)		—		—		—		—		(94	)		—			—			—			—			(94	)
Dividends declared ($0.25 per common share)		—		—		—		—		—			(91,411	)		—			—			—			(91,411	)
Balance at March 31, 2018		—	$	—		364,695	$	365	$	4,333,972		$	(484,804	)	$	(9,961	)	$	(777	)	$	14,394		$	3,853,189

	Preferred				Common
	Shares		Par Value		Shares		Par Value		Additional Paid-in Capital		Retained Earnings (Deficit)			Accumulated Other Comprehensive Loss			Treasury Stock			Non- Controlling Interests			Total Equity
Balance at December 31, 2018		—	$	—		370,637	$	371	$	4,442,948	$	162,768		$	(58,202	)	$	(777	)	$	13,830		$	4,560,938
Net income		—		—		—		—		—		75,822			—			—			469			76,291
Unrealized loss on interest rate swap		—		—		—		—		—		—			(3,772	)		—			—			(3,772	)
Foreign currency translation loss		—		—		—		—		—		—			(5,918	)		—			—			(5,918	)
Stock vesting and amortization of stock-based    compensation		—		—		1,055		1		6,714		—			—			—			—			6,715
Distributions to non-controlling interests		—		—		—		—		—		—			—			—			(645	)		(645	)
Proceeds from offering (net of offering costs)		—		—		20,147		20		354,010		—			—			—			—			354,030
Dividends declared ($0.25 per common share)		—		—		—		—		—		(97,163	)		—			—			—			(97,163	)
Balance at March 31, 2019		—	$	—		391,839	$	392	$	4,803,672	$	141,427		$	(67,892	)	$	(777	)	$	13,654		$	4,890,476

See accompanying notes to condensed consolidated financial statements.

6

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended March 31,
	2019			2018
	(In thousands)
Operating activities
Net income	$	76,291		$	91,043
Adjustments to reconcile net income to net cash provided    by operating activities:
Depreciation and amortization		34,675			37,858
Amortization of deferred financing costs and debt discount		1,827			1,789
Direct financing lease interest accretion		(2,337	)		(2,340	)
Straight-line rent revenue		(23,959	)		(20,377	)
Share-based compensation		6,715			1,856
Gain from sale of real estate, net		—			(1,467	)
Straight-line rent and other write-off, net of tax benefit		2,596			6,059
Other adjustments		2,249			(3,217	)
Changes in:
Interest and rent receivables		(1,193	)		(3,678	)
Accounts payable and accrued expenses		(9,940	)		(12,729	)
Net cash provided by operating activities		86,924			94,797
Investing activities
Cash paid for acquisitions and other related investments		(6,492	)		—
Net proceeds from sale of real estate		—			148,809
Principal received on loans receivable		420			1,734
Investment in loans receivable		(1,185	)		(149,080	)
Construction in progress and other		(160,736	)		(8,399	)
Net cash used for investing activities		(167,993	)		(6,936	)
Financing activities
Revolving credit facilities, net		9,097			(33,590	)
Distributions paid		(95,419	)		(89,403	)
Lease deposits and other obligations to tenants		3,677			1,299
Proceeds from sale of common shares, net of offering costs		354,030			(94	)
Debt issuance costs paid and other financing activities		(677	)		(1,549	)
Net cash provided by (used for) financing activities		270,708			(123,337	)
Increase (decrease) in cash, cash equivalents and restricted cash for period		189,639			(35,476	)
Effect of exchange rate changes		(11,450	)		2,774
Cash, cash equivalents and restricted cash at beginning of period		822,425			172,247
Cash, cash equivalents and restricted cash at end of period	$	1,000,614		$	139,545
Interest paid	$	51,296		$	57,025
Supplemental schedule of non-cash financing activities:
Distributions declared, unpaid	$	97,163		$	91,411
Cash, cash equivalents and restricted cash are comprised of the following:
Beginning of period:
Cash and cash equivalents	$	820,868		$	171,472
Restricted cash, included in Other assets		1,557		775
	$	822,425		$	172,247
End of period:
Cash and cash equivalents	$	995,548		$	138,314
Restricted cash, included in Other assets		5,066			1,231
	$	1,000,614		$	139,545

See accompanying notes to condensed consolidated financial statements.

7

MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

	March 31, 2019			December 31, 2018
(In thousands)	(Unaudited)			(Note 2)
Assets
Real estate assets
Land, buildings and improvements, intangible lease assets, and other	$	5,394,092		$	5,268,459
Mortgage loans		1,214,780			1,213,322
Net investment in direct financing leases		684,547			684,053
Gross investment in real estate assets		7,293,419			7,165,834
Accumulated depreciation and amortization		(498,915	)		(464,984	)
Net investment in real estate assets		6,794,504			6,700,850
Cash and cash equivalents		995,548			820,868
Interest and rent receivables		24,788			25,855
Straight-line rent receivables		243,556			220,848
Equity investments		506,123			520,058
Other loans		365,402			373,198
Other assets		301,532			181,966
Total Assets	$	9,231,453		$	8,843,643
Liabilities and Capital
Liabilities
Debt, net	$	4,023,568		$	4,037,389
Accounts payable and accrued expenses		91,461			108,574
Deferred revenue		9,979			13,467
Obligations to tenants and other lease liabilities		118,474			27,524
Payable due to Medical Properties Trust, Inc.		97,105			95,361
Total Liabilities		4,340,587			4,282,315
Capital
General Partner — issued and outstanding — 3,918 units at March 31, 2019    and 3,706 units at December 31, 2018		49,478			46,084
Limited Partners:
Common units — issued and outstanding — 387,921 units at    March 31, 2019 and 366,931 units at December 31, 2018		4,895,626			4,559,616
LTIP units — issued and outstanding — 232 units at March 31, 2019    and 232 units at December 31, 2018		—			—
Accumulated other comprehensive loss		(67,892	)		(58,202	)
Total MPT Operating Partnership, L.P. capital		4,877,212			4,547,498
Non-controlling interests		13,654			13,830
Total Capital		4,890,866			4,561,328
Total Liabilities and Capital	$	9,231,453		$	8,843,643

See accompanying notes to condensed consolidated financial statements.

8

MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Net Income

(Unaudited)

	For the Three Months Ended March 31,
(In thousands, except per unit amounts)	2019			2018
Revenues
Rent billed	$	108,598		$	128,011
Straight-line rent		20,651			15,791
Income from direct financing leases		17,280			17,681
Interest and other income		33,925			43,563
Total revenues		180,454			205,046
Expenses
Interest		50,551			57,023
Real estate depreciation and amortization		33,352			35,802
Property-related		3,066			2,184
General and administrative		23,451			17,818
Total expenses		110,420			112,827
Other income (expense)
Gain on sale of real estate, net		—			1,467
Earnings from equity interests		3,720			3,271
Other		204			(4,739	)
Total other income (expense)		3,924			(1	)
Income before income tax		73,958			92,218
Income tax benefit (expense)		2,333			(1,175	)
Net income		76,291			91,043
Net income attributable to non-controlling interests		(469	)		(442	)
Net income attributable to MPT Operating Partnership partners	$	75,822		$	90,601
Earnings per units — basic and diluted
Net income attributable to MPT Operating Partnership partners	$	0.20		$	0.25
Weighted average units outstanding — basic		380,551			364,882
Weighted average units outstanding — diluted		381,675			365,343
Dividends declared per unit	$	0.25		$	0.25

See accompanying notes to condensed consolidated financial statements.

9

MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	For the Three Months Ended March 31,
(In thousands)	2019			2018
Net income	$	76,291		$	91,043
Other comprehensive income:
Unrealized loss on interest rate swap		(3,772	)		—
Foreign currency translation (loss) gain		(5,918	)		16,088
Total comprehensive income		66,601			107,131
Comprehensive income attributable to non-controlling interests		(469	)		(442	)
Comprehensive income attributable to MPT Operating Partnership partners	$	66,132		$	106,689

See accompanying notes to condensed consolidated financial statements.

10

MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Capital

(Unaudited)

	General					Limited Partners											Accumulated
	Partner					Common						LTIPs					Other			Non-
	Units		Unit Value			Units			Unit Value			Units			Unit Value		Comprehensive Loss			Controlling Interests			Total Capital
Balance at December 31, 2017		3,644	$	38,489			360,780		$	3,808,583			292		$	—	$	(26,049	)	$	14,572		$	3,835,595
Net income		—		906			—			89,695			—			—		—			442			91,043
Cumulative effect of change in accounting    principles		—		19			—			1,919			—			—		—			—			1,938
Foreign currency translation gain		—		—			—			—			—			—		16,088			—			16,088
Unit vesting and amortization of unit-based    compensation		3		19			268			1,837			—			—		—			—			1,856
Conversion of LTIP units to common units		—		—			60			—			(60	)		—		—			—			—
Redemption of common units		—		—			(60	)		(816	)		—			—		—			—			(816	)
Distributions to non-controlling interests		—		—			—			—			—			—		—			(620	)		(620	)
Proceeds from offering (net of offering costs)		—		(1	)		—			(93	)		—			—		—			—			(94	)
Distributions declared ($0.25 per unit)		—		(914	)		—			(90,497	)		—			—		—			—			(91,411	)
Balance at March 31, 2018		3,647	$	38,518			361,048		$	3,810,628			232		$	—	$	(9,961	)	$	14,394		$	3,853,579

	General					Limited Partners									Accumulated
	Partner					Common					LTIPs				Other			Non-
	Units		Unit Value			Units		Unit Value			Units		Unit Value		Comprehensive Loss			Controlling Interests			Total Capital
Balance at December 31, 2018		3,706	$	46,084			366,931	$	4,559,616			232	$	—	$	(58,202	)	$	13,830		$	4,561,328
Net income		—		758			—		75,064			—		—		—			469			76,291
Unrealized loss on interest rate swap		—		—			—		—			—		—		(3,772	)		—			(3,772	)
Foreign currency translation loss		—		—			—		—			—		—		(5,918	)		—			(5,918	)
Unit vesting and amortization of unit-based    compensation		11		68			1,044		6,647			—		—		—			—			6,715
Distributions to non-controlling interests		—		—			—		—			—		—		—			(645	)		(645	)
Proceeds from offering (net of offering costs)		201		3,540			19,946		350,490			—		—		—			—			354,030
Distributions declared ($0.25 per unit)		—		(972	)		—		(96,191	)		—		—		—			—			(97,163	)
Balance at March 31, 2019		3,918	$	49,478			387,921	$	4,895,626			232	$	—	$	(67,892	)	$	13,654		$	4,890,866

See accompanying notes to condensed consolidated financial statements.

11

MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended March 31,
	2019			2018
	(In thousands)
Operating activities
Net income	$	76,291		$	91,043
Adjustments to reconcile net income to net cash provided    by operating activities:
Depreciation and amortization		34,675			37,858
Amortization of deferred financing costs and debt discount		1,827			1,789
Direct financing lease interest accretion		(2,337	)		(2,340	)
Straight-line rent revenue		(23,959	)		(20,377	)
Unit-based compensation		6,715			1,856
Gain from sale of real estate, net		—			(1,467	)
Straight-line rent and other write-off, net of tax benefit		2,596			6,059
Other adjustments		2,249			(3,217	)
Changes in:
Interest and rent receivables		(1,193	)		(3,678	)
Accounts payable and accrued expenses		(9,940	)		(12,729	)
Net cash provided by operating activities		86,924			94,797
Investing activities
Cash paid for acquisitions and other related investments		(6,492	)		—
Net proceeds from sale of real estate		—			148,809
Principal received on loans receivable		420			1,734
Investment in loans receivable		(1,185	)		(149,080	)
Construction in progress and other		(160,736	)		(8,399	)
Net cash used for investing activities		(167,993	)		(6,936	)
Financing activities
Revolving credit facilities, net		9,097			(33,590	)
Distributions paid		(95,419	)		(89,403	)
Lease deposits and other obligations to tenants		3,677			1,299
Proceeds from sale of units, net of offering costs		354,030			(94	)
Debt issuance costs paid and other financing activities		(677	)		(1,549	)
Net cash provided by (used for) financing activities		270,708			(123,337	)
Increase (decrease) in cash, cash equivalents and restricted cash for period		189,639			(35,476	)
Effect of exchange rate changes		(11,450	)		2,774
Cash, cash equivalents and restricted cash at beginning of period		822,425			172,247
Cash, cash equivalents and restricted cash at end of period	$	1,000,614		$	139,545
Interest paid	$	51,296		$	57,025
Supplemental schedule of non-cash financing activities:
Distributions declared, unpaid	$	97,163		$	91,411
Cash, cash equivalents, and restricted cash are comprised of the following:
Beginning of period:
Cash and cash equivalents	$	820,868		$	171,472
Restricted cash, included in Other assets		1,557			775
	$	822,425		$	172,247
End of period:
Cash and cash equivalents	$	995,548		$	138,314
Restricted cash, included in Other assets		5,066			1,231
	$	1,000,614		$	139,545

See accompanying notes to condensed consolidated financial statements.

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MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization

Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003, under the Maryland General Corporation Law for the purpose of engaging in the business of investing in, owning, and leasing healthcare real estate. Our operating partnership subsidiary, MPT Operating Partnership, L.P., (the “Operating Partnership”) through which we conduct all of our operations, was formed in September 2003. Through another wholly-owned subsidiary, Medical Properties Trust, LLC, we are the sole general partner of the Operating Partnership. At present, we directly own substantially all of the limited partnership interests in the Operating Partnership and have elected to report our required disclosures and that of the Operating Partnership on a combined basis, except where material differences exist.

We have operated as a real estate investment trust (“REIT”) since April 6, 2004 and elected REIT status upon the filing in September 2005 of the calendar year 2004 federal income tax return. Accordingly, we will generally not be subject to federal income tax in the United States (“U.S.”), provided that we continue to qualify as a REIT and our distributions to our stockholders equal or exceed our taxable income. Certain non-real estate activities we undertake are conducted by entities which we elected to be treated as taxable REIT subsidiaries (“TRS”). Our TRS entities are subject to both U.S. federal and state income taxes. For our properties located outside the U.S., we are subject to the local taxes of the jurisdictions where our properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes in the U.S. as such income flows through our REIT.

Our primary business strategy is to acquire and develop real estate and improvements, primarily for long-term lease to providers of healthcare services, such as operators of general acute care hospitals, inpatient physical rehabilitation hospitals, and long-term acute care hospitals. We also make mortgage and other loans to operators of similar facilities. In addition, we may obtain profits or equity interests in our tenants, from time to time, in order to enhance our overall return. We manage our business as a single business segment. All of our properties are currently located in the U.S. and Europe.

2. Summary of Significant Accounting Policies

Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information, including rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.

For information about significant accounting policies, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to these significant accounting policies other than the following:

On January 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, “Leases”, (“ASU 2016-02”). ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). We adopted this standard using the modified retrospective approach and have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, permits the following: no reassessment of whether existing contracts are or contain a lease; no reassessment of lease classification for existing leases; and no reassessment of initial direct costs for existing leases. Additionally, we made certain elections permitted in accordance with ASU 2018-11, “Leases (Topic 842): – Targeted Improvements.” which (1) permits entities to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in its financial statements and (2) permits lessors to account for lease and non-lease components as a single lease component in a contract if certain criteria are met.

The standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method (for finance leases) or on a straight-line basis (for operating leases) over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will remain off balance sheet with lease expense recognized on a straight-line basis over the lease term, similar to previous guidance for operating leases. The standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases.

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For our leases in which we are the lessee, including ground leases on which certain of our facilities reside, along with corporate office and equipment leases, we recorded a right-of-use asset and offsetting lease liability of approximately $84 million upon adoption of this standard – resulting in no material cumulative effect adjustment. From a lessor perspective, we did not change the classification or accounting of our existing leases except, we are now grossing up our income statement for certain operating expenses, such as property taxes and insurance, that the tenants of our facilities are required to reimburse us for pursuant to our “triple-net” leases. See Note 10 for additional detail.

Recent Accounting Developments:

Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). This standard requires a new forward-looking “expected loss” model to be used for our financing receivables, including direct financing leases and loan receivables, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is effective for us beginning January 1, 2020. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

Reclassifications and Revisions

Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.

3. Real Estate and Lending Activities

Acquisitions

We acquired the following assets (in thousands):

	Three Months Ended March 31,
	2019		2018
Assets Acquired
Land	$	169	$	—
Building		5,327		—
Intangible lease assets — subject to amortization		996		—
Total assets acquired	$	6,492	$	—

On February 8, 2019, we acquired an inpatient rehabilitation hospital in Germany for €5.7 million (including real estate transfer taxes). This acquisition was the final property to close as part of a four-hospital portfolio that we agreed to purchase for an aggregate amount of €23 million (including real estate transfer taxes).  The property is leased to affiliates of Median Kliniken S.à.r.l. (“MEDIAN”), pursuant to a new 27-year master lease with annual escalators at the greater of 1% or 70% of the change in German consumer price index (“CPI”).

Development Activities

During the 2018 first quarter, we completed construction on a $25.5 million inpatient rehabilitation facility located in Flagstaff, Arizona. This facility opened on March 1, 2018 and is being leased to Ernest Health, Inc. (“Ernest”) pursuant to a stand-alone lease, with terms generally similar to the original master lease.

See table below for a status update on our current development projects (in thousands):

Property	Commitment		Costs Incurred as of March 31, 2019		Estimated Rent Commencement Date
Circle Health (Birmingham, England)	$	44,241	$	34,705	3Q 2019
Circle Health Rehabilitation (Birmingham, England)		21,979		11,677	3Q 2019
Surgery Partners (Idaho Falls, Idaho)		113,468		55,857	1Q 2020
	$	179,688	$	102,239

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Disposals

On March 1, 2018, we sold the real estate of St. Joseph Medical Center in Houston, Texas, for approximately $148 million to Steward Health Care System LLC (“Steward”). In return, we received a mortgage loan equal to the purchase price, with such loan secured by the underlying real estate. The mortgage loan had terms consistent with the other mortgage loans in the Steward portfolio. This transaction resulted in a gain of $1.5 million, offset by a $1.7 million non-cash charge to revenue to write-off related straight-line rent receivables on this property.

Leasing Operations (Lessor)

As noted earlier, we acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases (typical initial fixed terms ranging from 10 to 15 years) and most include renewal options at the election of our tenants, generally in five year increments. More than 95% of our leases provide annual rent escalations based on increases in the consumer price index (or similar index outside the U.S.) and/or fixed minimum annual escalations ranging from 0.5% to 3.0%.  Many of our domestic leases contain purchase options with pricing set at various terms but in no case less than our total investment.  For five properties with a carrying value of $210 million, our leases require a residual value guarantee from the tenant.  Our leases typically require the tenant to handle and bear most of the costs associated with our properties including repair/maintenance, property taxes, and insurance. We routinely inspect our properties to ensure the residual value of each of our assets is being maintained.  Except for leases noted below as direct finance leases (“DFLs”), all of our leases are classified as operating leases.

The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under noncancelable leases as of March 31, 2019 (in thousands):

	Total Under Operating Leases		Total Under DFLs		Total
2019 (nine months only)	$	329,487	$	48,491	$	377,978
2020		438,596		66,008		504,604
2021		447,232		67,388		514,620
2022		452,173		68,796		520,969
2023		459,222		70,232		529,454
Thereafter		9,636,734		1,550,857		11,187,591
	$	11,763,444	$	1,871,772	$	13,635,216

Direct Financing Leases

At March 31, 2019, leases on 14 Ernest facilities, ten Prime Healthcare Services, Inc. (“Prime”) facilities, and two Alecto Healthcare Services LLC (“Alecto”) facilities are accounted for as DFLs. The components of our net investment in DFLs consisted of the following (in thousands):

	As of March 31, 2019			As of December 31, 2018
Minimum lease payments receivable	$	2,078,099		$	2,091,504
Estimated residual values		421,893			424,719
Less: Unearned income		(1,815,445	)		(1,832,170	)
Net investment in direct financing leases	$	684,547		$	684,053

On March 15, 2018, we entered into a new lease agreement of our long-term acute care facility in Boise, Idaho with a joint venture formed by Vibra Healthcare, LLC (“Vibra”) and Ernest. The new lease had an initial 15-year fixed term (ending March 2033) with three extension options of five years each. With this transaction, we incurred a non-cash charge of $1.5 million to write-off DFL unbilled interest associated with the previous lease to Ernest on this property.

Adeptus Health Transition Properties

As noted in previous filings, effective October 2, 2017, we had 16 properties transitioning away from Adeptus Health, Inc. (“Adeptus”) in stages over a two year period as part of Adeptus’ confirmed plan of reorganization under Chapter 11 of the Bankruptcy Code. At March 31, 2019, nine of these properties have been re-leased at rates consistent with that of the previous Adeptus lease, and one property in the Dallas market was sold in April 2019. Of the six remaining facilities (representing less than 0.6% of our total assets at March 31, 2019), five remain vacant and the final property will be transitioned away from Adeptus on October 1, 2019.

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At March 31, 2019, Adeptus is current on its rent obligations to us. Although no assurances can be made that we will not recognize a loss in the future, we believe, at March 31, 2019, that the sale or re-leasing of the remaining six transition facilities will not result in any material loss or additional impairment.

Gilbert and Florence Facilities

In the first quarter of 2018, we terminated the lease at our Gilbert and Florence, Arizona facilities due to the tenant not meeting its rent obligations pursuant to the lease. As a result of the lease terminating, we recorded a charge of $1.1 million to reserve against the straight-line rent receivables. At March 31, 2019, all outstanding receivables due from the former tenant of Florence and Gilbert were completely reserved. On December 14, 2018, the Florence facility was re-leased to Steward pursuant to our original master lease with them with a term to begin in the second quarter of 2019. At March 31, 2019, our Gilbert facility is vacant. Although no assurances can be made that we will not have any impairment charges in the future, we believe our investment in the Gilbert facility (less than 0.2% of total assets at March 31, 2019), is fully recoverable.

Alecto Facilities

At March 31, 2019, we own four acute care facilities that are leased to Alecto and have a mortgage loan on a fifth property. With the decline in the operating results of the facility tenant, we recorded a charge to reserve against the straight-line rent and other receivables outstanding during the three months ended March 31, 2019. At March 31, 2019, our total overall investment in these properties is approximately 1% of our total assets.

Loans

The following is a summary of our loans (in thousands):

	As of March 31, 2019		As of December 31, 2018
Mortgage loans	$	1,214,780	$	1,213,322
Other loans		365,402		373,198
Total	$	1,580,182	$	1,586,520

Other loans typically consist of loans to our tenants for acquisitions and working capital purposes, and include our shareholder loan made to the joint venture with Primotop Holdings S.à.r.l. (“Primotop”) in the amount of €290 million.

Concentrations of Credit Risk

We monitor concentration risk in several ways due to the nature of our real estate assets that are vital to the communities in which they are located and given our history of being able to replace inefficient operators of our facilities if needed, with more effective operators:

1) Facility concentration – At March 31, 2019, we had no investment in any single property greater than 4% of our total assets, which is consistent with December 31, 2018.

2) Operator concentration – For the three months ended March 31, 2019, revenue from Steward and Prime of $86.6 million and $32.0 million, respectively, exceeded 10% of our total revenues. In comparison, Steward ($73.2 million), Prime ($31.8 million) and MEDIAN ($29.1 million), respectively, exceeded 10% of our total revenues for the first three months of 2018.

3) Geographic concentration – At March 31, 2019, investments in the U.S. and Europe represented approximately 80% and 20%, respectively, of our total assets, which is consistent with December 31, 2018.

4) Facility type concentration – For the three months ended March 31, 2019, approximately 86% of our revenues are from our general acute care facilities, while rehabilitation and long-term acute care facilities make up 10% and 4%, respectively. These percentages are similar to those for the first three months of 2018.

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4. Debt

The following is a summary of debt (dollar amounts in thousands):

	As of March 31, 2019			As of December 31, 2018
Revolving credit facility(A)	$	37,802		$	28,059
Term loan		200,000			200,000
4.000% Senior Unsecured Notes due 2022(B)		560,900			573,350
5.500% Senior Unsecured Notes due 2024		300,000			300,000
6.375% Senior Unsecured Notes due 2024		500,000			500,000
3.325% Senior Unsecured Notes due 2025(B)		560,900			573,350
5.250% Senior Unsecured Notes due 2026		500,000			500,000
5.000% Senior Unsecured Notes due 2027		1,400,000			1,400,000
	$	4,059,602		$	4,074,759
Debt issue costs, net		(36,034	)		(37,370	)
	$	4,023,568		$	4,037,389

(A) Includes £29 million and £22 million of GBP-denominated borrowings that reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

(B) These notes are Euro-denominated and reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

As of March 31, 2019, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) are as follows (in thousands):

2019	$	—
2020		—
2021		37,802
2022		760,900
2023		—
Thereafter		3,260,900
Total	$	4,059,602

Covenants

Our debt facilities impose certain restrictions on us, including restrictions on our ability to: incur debts; create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or other assets; and change our business. In addition, the credit agreements governing our revolving credit and term loan agreement (“Credit Facility”) limit the amount of dividends we can pay as a percentage of normalized adjusted funds from operations, as defined in the agreements, on a rolling four quarter basis. At March 31, 2019, the dividend restriction was 95% of normalized adjusted funds from operations (“NAFFO”). The indentures governing our senior unsecured notes also limit the amount of dividends we can pay based on the sum of 95% of NAFFO, proceeds of equity issuances and certain other net cash proceeds. Finally, our senior unsecured notes require us to maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.

In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, including covenants relating to our total leverage ratio, fixed charge coverage ratio, secured leverage ratio, consolidated adjusted net worth, unsecured leverage ratio, and unsecured interest coverage ratio. The Credit Facility also contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with our covenants. If an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and payable. At March 31, 2019, we were in compliance with all such financial and operating covenants.

5. Common Stock/Partners’ Capital

Medical Properties Trust, Inc.

In the 2019 first quarter, we sold 20.1 million shares of common stock under our at-the-market equity offering program, resulting in net proceeds of approximately $354 million.

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We sold an additional 2.5 million shares of common stock under our at-the-market equity offering program subsequent to March31, 2019, resulting in net proceeds of approximately $45 million.

MPT Operating Partnership, L.P.

At March 31, 2019, the Company has a 99.9% ownership interest in the Operating Partnership, with the remainder owned by two other partners, who are employees.

During the three months ended March 31, 2019, the Operating Partnership issued approximately 20.1 million units in direct response to the common stock at-the-market offerings by Medical Properties Trust, Inc. during the same period.

6. Stock Awards

We adopted the 2013 Equity Incentive Plan (the “Equity Incentive Plan”) during the second quarter of 2013, which authorizes the issuance of common stock options, restricted stock, restricted stock units, deferred stock units, stock appreciation rights, performance units and awards of interests in our Operating Partnership. The Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors. We have reserved 8,196,770 shares of common stock for awards under the Equity Incentive Plan. No shares remain available for future stock awards as of March 31, 2019. Share-based compensation expense totaled $6.7 million and $1.9 million for the three months ended March 31, 2019 and 2018, respectively.

7. Fair Value of Financial Instruments

We have various assets and liabilities that are considered financial instruments. We estimate that the carrying value of cash and cash equivalents and accounts payable and accrued expenses approximate their fair values. We estimate the fair value of our interest and rent receivables using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar receivables would be made to others with similar credit ratings and for the same remaining maturities. The fair value of our mortgage loans and other loans are estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We determine the fair value of our senior unsecured notes using Level 2 inputs such as quotes from securities dealers and market makers. We estimate the fair value of our revolving credit facility and term loan using Level 2 inputs based on the present value of future payments, discounted at a rate which we consider appropriate for such debt.

Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be possible and may not be a prudent management decision. The following table summarizes fair value estimates for our financial instruments (in thousands):

	As of						As of
	March 31, 2019						December 31, 2018
Asset (Liability)	Book Value			Fair Value			Book Value			Fair Value
Interest and rent receivables	$	24,788		$	23,925		$	25,855		$	24,942
Loans(1)		1,465,182			1,552,687			1,471,520			1,490,758
Debt, net		(4,023,568	)		(4,170,310	)		(4,037,389	)		(3,947,795	)

(1) Excludes mortgage loans related to Ernest since they are recorded at fair value and discussed below.

Items Measured at Fair Value on a Recurring Basis

Our Ernest mortgage loans are measured at fair value on a recurring basis as we elected to account for these investments using the fair value option method in 2012 when we acquired an equity interest in and made an acquisition loan to Ernest. Such equity interest was sold and the acquisition loan was paid off in October 2018. We elected to account for these investments at fair value due to the size of the investments and because we believe this method was more reflective of current values. We have not made a similar election for other investments existing at March 31, 2019.

At March 31, 2019, the amounts recorded under the fair value option method were as follows (in thousands):

Asset Type	Fair Value		Original Cost		Asset Type Classification
Mortgage loans	$	115,000	$	115,000	Mortgage loans

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Our mortgage loans with Ernest are recorded at fair value based on Level 2 inputs by discounting the estimated cash flows using the market rates which similar loans would be made to borrowers with similar credit ratings and the same remaining maturities.

During the first quarter of 2018, we recognized an unrealized loss on our investment in Ernest. There was no gain or loss recorded during the first three months of 2019.

8. Earnings Per Share/Unit

Medical Properties Trust, Inc.

Our earnings per share were calculated based on the following (amounts in thousands):

	For the Three Months Ended March 31,
	2019			2018
Numerator:
Net income	$	76,291		$	91,043
Non-controlling interests’ share in net income		(469	)		(442	)
Participating securities’ share in earnings		(476	)		(195	)
Net income, less participating securities’ share in earnings	$	75,346		$	90,406
Denominator:
Basic weighted-average common shares		380,551			364,882
Dilutive potential common shares		1,124			461
Dilutive weighted-average common shares		381,675			365,343

MPT Operating Partnership, L.P.

Our earnings per common unit were calculated based on the following (amounts in thousands):

	For the Three Months Ended March 31,
	2019			2018
Numerator:
Net income	$	76,291		$	91,043
Non-controlling interests’ share in net income		(469	)		(442	)
Participating securities’ share in earnings		(476	)		(195	)
Net income, less participating securities’ share in earnings	$	75,346		$	90,406
Denominator:
Basic weighted-average units		380,551			364,882
Dilutive potential units		1,124			461
Diluted weighted-average units		381,675			365,343

9. Commitments and Contingencies

Commitments

On January 31, 2019, we entered into definitive agreements to acquire a portfolio of eleven Australian hospitals currently operated by Healthscope Ltd. (“Healthscope”) for an aggregate purchase price of approximately $859 million, of which approximately $36.4 million was paid into escrow on February 4, 2019. Upon closing, these facilities will be leased to Healthscope pursuant to master lease agreements that have an average initial term of 20 years with annual fixed escalations and multiple extension options. In a related transaction, Brookfield Business Partners L.P. together with its institutional partners (“Brookfield”) has agreed to acquire up to 100% of Healthscope’s outstanding shares. Closing of our acquisition, which is expected to be completed in the second quarter of 2019, is subject to Healthscope shareholder approval, customary real estate and regulatory approvals, the successful completion of the Brookfield transactions, and other closing conditions. In April 2019, we entered into an Australian term loan commitment in the amount of $1.2 billion Australian dollars for which closing and funding is contingent on the successful completion of the Healthscope transaction.

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Contingencies

We are a party to various legal proceedings incidental to our business. In the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect our financial position, results of operations or cash flows.

10. Leases (Lessee)

We have leased land on which certain of our facilities reside, along with corporate office and equipment. Our leases have remaining lease terms of 5.3 years to 42.5 years, some of which may include options to extend the leases up to, or just beyond, the depreciable life of the properties that occupy the leased land. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments.

Properties subject to ground leases are subleased to our tenants, except for three Adeptus transition properties.

The following is a summary of our lease expense (in thousands):

	Classification	Three Months Ended March 31, 2019
Operating lease cost (1)	(2)	$	2,096
Finance lease cost:
Amortization of right-of-use assets	Real estate depreciation and amortization		13
Interest on lease liabilities	Interest expense		21
Sublease income	Interest and other income		(900	)
Total lease cost		$	1,230

(1) Includes short-term leases.

(2) $1.6 million included in Property-related, with the remainder reflected in General and administrative expenses.

Fixed minimum payments due over the remaining lease term under non-cancelable leases of more than one year and amounts to be received in the future from non-cancelable subleases over their remaining lease term at March 31, 2019 are as follows (amounts in thousands):

	Operating leases			Finance leases			Amounts to be received from subleases			Net payments
2019 (1)	$	4,598		$	93		$	(2,542	)	$	2,149
2020		6,437			125			(3,456	)		3,106
2021		6,606			126			(3,561	)		3,171
2022		6,750			128			(3,715	)		3,163
2023		6,815			129			(3,719	)		3,225
Thereafter		196,788			5,045			(95,320	)		106,513	(2)
Total undiscounted minimum lease payments	$	227,994		$	5,646		$	(112,313	)	$	121,327
Less: interest		(146,478	)		(3,717	)
Present value of lease liabilities	$	81,516		$	1,929

(1) Represents remaining nine months of 2019.

(2) Reflects certain ground leases, in which we are the lessee, that have longer initial fixed terms than our existing sublease to our tenants. However, we would expect to either renew the related sublease, enter into a lease with a new tenant or early terminate the ground lease to reduce or avoid any significant impact from such ground leases.

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Supplemental balance sheet information is as follows (in thousands, except lease terms and discount rate):

	Classification	March 31, 2019
Right of use assets:
Operating leases - real estate	Land, buildings and improvements, intangible lease assets, and other	$	64,995
Finance leases - real estate	Land, buildings and improvements, intangible lease assets, and other		1,939
Real estate right of use assets, net			66,934
Operating leases - corporate	Other assets		11,419
Total right of use assets, net		$	78,353
Lease liabilities:
Operating leases	Obligations to tenants and other lease liabilities	$	81,516
Financing leases	Obligations to tenants and other lease liabilities		1,929
Total lease liabilities		$	83,445
Weighted average remaining lease term:
Operating leases			32.2
Finance leases			37.7
Weighted average discount rate:
Operating leases			6.3	%
Finance leases			6.6	%

The following is supplemental cash flow information (in thousands):

	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,459
Operating cash flows from finance leases		10
Financing cash flows from finance leases		21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		1,042
Finance leases		—

11. Subsequent Events

On April 3, 2019, we closed on the acquisition of one acute care hospital in Poole, England for a purchase price of approximately £34.5 million. Upon closing, this facility was leased to BMI Healthcare, pursuant to an in-place lease with 14 years remaining on its term and fixed 2.5% annual escalators.

On April 11, 2019, we re-leased our Twelve Oaks facility to a new tenant, Advanced Diagnostics Health System, LLC, pursuant to a new 10-year lease, subject to four additional five-year extension options.

On April 12, 2019, we closed on the acquisition of one acute care hospital in Big Spring, Texas for a purchase price of $26 million. Upon closing, this facility was leased to Steward pursuant to the existing master lease agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the consolidated financial condition and consolidated results of operations are presented on a combined basis for Medical Properties Trust and MPT Operating Partnership, L.P. as there are no material differences between these two entities.

The following discussion and analysis of the consolidated financial condition and consolidated results of operations should be read together with the condensed consolidated financial statements and notes thereto contained in this Form 10-Q and the consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2018.

Forward-Looking Statements.

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results or future performance, achievements or transactions or events to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to, the risks described in our Annual Report on Form 10-K and as updated in our Quarterly Reports on Form 10-Q for future periods, and Current Reports on Form 8-K as we file them with the SEC under the Securities Exchange Act of 1934, as amended. Such factors include, among others, the following:

• the political, economic, business, real estate, and other market conditions of the U.S. (both national and local), Europe (in particular Germany, the United Kingdom, Spain and Italy), and other foreign jurisdictions;

• the competitive environment in which we operate;

• the execution of our business plan;

• financing risks, such as our ability to repay, refinance, restructure, or extend our indebtedness as it becomes due;

• the risk that a condition to closing under the agreements governing any or all of our outstanding transactions that have not closed as of the date hereof (including the Healthscope transaction described in Note 9 to Item 1 of this Quarterly Report on Form 10-Q) may not be satisfied;

• the possibility that the anticipated benefits from any or all of the transactions we enter into will take longer to realize than expected or will not be realized at all;

• acquisition and development risks;

• potential environmental contingencies and other liabilities;

• adverse developments affecting the financial health of one or more of our tenants, including insolvency;

• other factors affecting the real estate industry generally or the healthcare real estate industry in particular;

• our ability to maintain our status as a real estate investment trust (“REIT”) for U.S. federal and state income tax purposes;

• our ability to attract and retain qualified personnel;

• changes in foreign currency exchange rates;

• changes in tax laws in the U.S., Europe or any other foreign jurisdictions in which we do business;

• U.S. (both federal and state), European (in particular Germany, the United Kingdom, Spain and Italy) and other foreign countries’ healthcare and other regulatory requirements; and

• U.S. national and local economic conditions, as well as conditions in Europe, Australia and any other foreign jurisdictions where we own or will own healthcare facilities, which may have a negative effect on the following, among other things:

• the financial condition of our tenants, our lenders, or institutions that hold our cash balances, which may expose us to increased risks of default by these parties;

• our ability to obtain equity or debt financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition and development opportunities, refinance existing debt and our future interest expense; and

• the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis.

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Key Factors that May Affect Our Operations

Our revenue is derived from rents we earn pursuant to the lease agreements with our tenants, from interest income from loans to our tenants and other facility owners and from profits or equity interests in real estate joint ventures and other investments including interest held in certain of our tenants’ operations. Our tenants operate in the healthcare industry, generally providing medical, surgical and rehabilitative care to patients. The capacity of our tenants to pay our rents and interest is dependent upon their ability to conduct their operations at profitable levels. We believe that the business environment of the industry segments in which our tenants operate is generally positive for efficient operators. However, our tenants’ operations are subject to economic, regulatory and market conditions that may affect their profitability, which could impact our results. Accordingly, we monitor certain key factors, changes to which we believe may provide early indications of conditions that may affect the level of risk in our portfolio.

Key factors that we consider in underwriting prospective tenants and borrowers and in monitoring the performance of existing tenants and borrowers include the following:

• admission levels and surgery/procedure/diagnosis volumes by type;

• the current, historical and prospective operating margins (measured by earnings before interest, taxes, depreciation, amortization and facility rent) of each tenant or borrower and at each facility;

• the ratio of our tenants’ or borrowers’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs;

• changes in revenue sources of our tenants’ or borrowers’ revenue, including the relative mix of public payors (including Medicare, Medicaid/MediCal, managed care in the U.S. and pension funds in Germany) and private payors (including commercial insurance and private pay patients);

• trends in tenants’ cash collections, including comparison to recorded net patient service revenues;

• tenants’ free cash flows;

• the effect of evolving healthcare legislation and other regulations on our tenants’ or borrowers’ profitability and liquidity; and

• the competition and demographics of the local and surrounding areas in which the tenants or borrowers operate.

Certain business factors, in addition to those described above that directly affect our tenants and borrowers, will likely materially influence our future results of operations. These factors include:

• trends in the cost and availability of capital, including market interest rates, that our prospective tenants may use for their real estate assets instead of financing their real estate assets through lease structures;

• changes in healthcare regulations that may limit the opportunities for physicians to participate in the ownership of healthcare providers and healthcare real estate;

• reductions in reimbursements from Medicare, state healthcare programs, and commercial insurance providers that may reduce our tenants’ or borrowers’ profitability and our lease rates;

• competition from other financing sources; and

• the ability of our tenants and borrowers to access funds in the credit markets.

CRITICAL ACCOUNTING POLICIES

Refer to our 2018 Annual Report on Form 10-K for a discussion of our critical accounting policies, which include revenue recognition, investments in real estate, purchase price allocation, loans, losses from rent and interest receivables, stock-based compensation, our fair value option election, and our accounting policy on consolidation. During the three months ended March 31, 2019, there were no material changes to these policies except for those described in Note 2 to Item 1 of this Form 10-Q.

Overview

We are a self-advised REIT focused on investing in and owning net-leased healthcare facilities across the U.S. and selectively in foreign jurisdictions. We have operated as a REIT since April 6, 2004, and accordingly, elected REIT status upon the filing of our calendar year 2004 federal income tax return. Medical Properties Trust, Inc. was incorporated under Maryland law on August 27, 2003, and MPT Operating Partnership, L.P. was formed under Delaware law on September 10, 2003. We conduct substantially all of our business through MPT Operating Partnership, L.P. We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. We also make mortgage loans to healthcare operators collateralized by their real estate assets. In addition, we selectively make loans to certain of our operators through our taxable REIT subsidiaries, the proceeds of which are typically used for acquisitions and working capital. Finally, from time to time, we acquire a profits or other equity interest in our tenants that gives us a right to share in such tenant’s profits and losses.

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At March 31, 2019, our portfolio consisted of 276 properties leased or loaned to 29 operators, of which three are under development and 10 are in the form of mortgage loans.

Our investments in healthcare real estate, including mortgage and other loans, as well as any equity investments in our tenants are considered a single reportable segment. At March 31, 2019, all of our investments are located in the U.S. and Europe. Our total assets are made up of the following (dollars in thousands):

	As of March 31, 2019		% of Total			As of December 31, 2018		% of Total
Real estate owned (gross)	$	5,976,400		64.7	%	$	5,868,340		66.4	%
Mortgage loans		1,214,780		13.2	%		1,213,322		13.7	%
Other loans		365,402		4.0	%		373,198		4.2	%
Construction in progress		102,239		1.1	%		84,172		1.0	%
Other assets		1,572,632		17.0	%		1,304,611		14.7	%
Total assets	$	9,231,453		100.0	%	$	8,843,643		100.0	%

Additional Concentration Details

On a pro forma gross asset basis (as defined in the “Reconciliation of Non-GAAP Financial Measures” section of Item 2 of this Quarterly Report on Form 10-Q), our concentration as of March 31, 2019 as compared to December 31, 2018 is as follows (dollars in thousands):

Pro Forma Gross Assets by Operator

	As of March 31, 2019					As of December 31, 2018
Operators	Total Pro Forma Gross Assets		Percentage of Total Pro Forma  Gross Assets			Total Pro Forma Gross Assets		Percentage of Total Pro Forma  Gross Assets
Steward	$	3,879,006		37.9	%	$	3,823,625		38.0	%
Prime		1,145,909		11.2	%		1,124,711		11.2	%
MEDIAN		1,041,121		10.2	%		1,075,504		10.7	%
Healthscope		858,569		8.4	%		858,569		8.5	%
Ernest		504,546		4.9	%		500,397		5.0	%
LifePoint		502,072		4.9	%		502,072		5.0	%
Other operators		1,745,797		16.9	%		1,644,900		16.3	%
Other assets		569,876		5.6	%		528,669		5.3	%
Total	$	10,246,896		100.0	%	$	10,058,447		100.0	%

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Pro Forma Gross Assets by U.S. State and Country

	As of March 31, 2019					As of December 31, 2018
U.S. States and Other Countries	Total Pro Forma Gross Assets		Percentage of Total Pro Forma Gross Assets			Total Pro Forma Gross Assets		Percentage of Total Pro Forma Gross Assets
Massachusetts	$	1,476,887		14.4	%	$	1,469,423		14.6	%
Texas		1,195,752		11.7	%		1,126,217		11.2	%
Utah		1,057,519		10.3	%		1,054,539		10.5	%
California		522,750		5.1	%		522,753		5.2	%
Arizona		488,198		4.8	%		483,778		4.8	%
All other states		2,666,821		25.9	%		2,630,231		26.1	%
Other domestic assets		552,005		5.4	%		482,992		4.8	%
Total U.S.	$	7,959,932		77.6	%	$	7,769,933		77.2	%
Germany	$	1,132,936		11.1	%	$	1,164,973		11.6	%
Australia		858,569		8.4	%		858,569		8.5	%
United Kingdom, Italy, and Spain		277,588		2.7	%		219,295		2.2	%
Other international assets		17,871		0.2	%		45,677		0.5	%
Total international	$	2,286,964		22.4	%	$	2,288,514		22.8	%
Grand total	$	10,246,896		100.0	%	$	10,058,447		100.0	%

On an individual property basis, we had no investment in any single property greater than 3.6% of our total pro forma gross assets as of March 31, 2019.

On an adjusted revenue basis (as defined in the “Reconciliation of Non-GAAP Financial Measures” section of Item 2 of this Quarterly Report on Form 10-Q), concentration for the three months ended March 31, 2019 as compared to the prior year is as follows (dollars in thousands):

AdjustedRevenue by Operator

	For the Three Months Ended March 31,
	2019					2018
Operators	Total Adjusted Revenue		Percentage of Total Adjusted Revenue			Total Adjusted Revenue		Percentage of Total Adjusted Revenue
Steward	$	86,630		43.5	%	$	73,227		35.7	%
Prime		32,002		16.1	%		31,778		15.5	%
MEDIAN		22,186		11.2	%		29,088		14.2	%
Ernest		12,969		6.5	%		16,416		8.0	%
LifePoint		11,483		5.8	%		9,537		4.7	%
Other operators		33,733		16.9	%		45,000		21.9	%
Total	$	199,003		100.0	%	$	205,046		100.0	%

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AdjustedRevenue by U.S. State and Country

	For the Three Months Ended March 31,
	2019					2018
U.S. States and Other Countries	Total Adjusted Revenue		Percentage of Total Adjusted Revenue			Total Adjusted Revenue		Percentage of Total Adjusted Revenue
Massachusetts	$	34,036		17.1	%	$	26,940		13.1	%
Texas		27,231		13.7	%		30,355		14.8	%
Utah		21,591		10.9	%		20,871		10.2	%
California		15,822		8.0	%		16,666		8.1	%
Arizona		12,583		6.3	%		11,386		5.6	%
All other states		59,757		29.9	%		60,037		29.3	%
Total U.S.	$	171,020		85.9	%	$	166,255		81.1	%
Germany	$	24,175		12.2	%	$	37,665		18.4	%
United Kingdom, Italy, and Spain		3,808		1.9	%		1,126		0.5	%
Total international	$	27,983		14.1	%	$	38,791		18.9	%
Grand total	$	199,003		100.0	%	$	205,046		100.0	%

Adjusted Revenue by Facility Type

	For the Three Months Ended March 31,
	2019					2018
U.S. States and Other Countries	Total Adjusted Revenue		Percentage of Total Adjusted Revenue			Total Adjusted Revenue		Percentage of Total Adjusted Revenue
General acute care hospitals	$	157,700		79.2	%	$	145,797		71.1	%
Rehabilitation hospitals		34,159		17.2	%		50,159		24.5	%
Long-term acute care hospitals		7,144		3.6	%		9,090		4.4	%
Total	$	199,003		100.0	%	$	205,046		100.0	%

Results of Operations

Three Months Ended March 31, 2019 Compared to March 31, 2018

Net income for the three months ended March 31, 2019, was $75.8 million, compared to $90.6 million for the three months ended March 31, 2018. This decrease is primarily due to expected lower revenues as a result of property sales post the 2018 first quarter including 71 properties sold to form the Primotop joint venture in the 2018 third quarter. This decrease is partially offset by additional revenue from new investments post the 2018 first quarter along with additional straight-line rent revenue recorded from the conversion of Steward mortgage loans to fee simple real estate throughout 2018. Funds from operations (“FFO”), after adjusting for certain items (as more fully described in Reconciliation of Non-GAAP Financial Measures), was $117.8 million for the 2019 first quarter as compared to $131.5 million for the 2018 first quarter. Similar to net income, this decrease in FFO is primarily due to lower revenue from the property sales post March 31, 2018.

A comparison of revenues for the three month periods ended March 31, 2019 and 2018 is as follows (dollar amounts in thousands):

	2019		% of Total			2018		% of Total			Year over Year Change
Rent billed	$	108,598		60.2	%	$	128,011		62.4	%		-15.2	%
Straight-line rent		20,651		11.4	%		15,791		7.7	%		30.8	%
Income from direct financing leases		17,280		9.6	%		17,681		8.6	%		-2.3	%
Interest and other income		33,925		18.8	%		43,563		21.3	%		-22.1	%
Total revenues	$	180,454		100.0	%	$	205,046		100.0	%		-12.0	%

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Our total revenue for the 2019 first quarter is down $24.6 million, or 12%, over the prior year. This decrease is made up of the following:

• Operating lease revenue (includes rent billed and straight-line rent) – down $14.6 million over the prior year of which $35.1 million of lower revenues is due to property dispositions post March 31, 2018 (majority relates to the formation of the Primotop joint venture in the 2018 third quarter) and approximately $2.9 million is from unfavorable foreign currency fluctuations. This decrease is partially offset by $17.6 million of additional lease revenue (of which $4.3 million represents straight-line rent) related to the conversion of four Steward mortgage loans to fee simple assets in 2018, and $5.4 million of incremental revenue from acquisitions post March 31, 2018 along with expansion and development projects.

• Income from direct financing leases – remained flat quarter over quarter.

• Interest and other income – down $9.6 million from the prior year due to the following:

- Interest from loans – down $10.9 million over the prior year of which $11.5 million is the result of lower interest revenue related to Steward mortgage loans converted to fee simple assets in 2018 and $4.4 million is from the payoff of our Ernest acquisition and other loans in the fourth quarter of 2018. This is partially offset by $4.2 million of interest revenue earned on the Primotop joint venture shareholder loan made in August 2018, $0.7 million from new loans made post the 2018 first quarter, and $0.2 million from our annual escalations in interest rates in accordance with loan provisions.

- Other income – up $1.3 million due to the implementation of the lease accounting standard on January 1, 2019, whereby we are now reflecting certain payments made by our tenants, including ground lease payments and reimbursements of property taxes and insurance, as revenue. This revenue is offset by a corresponding expense in the “Property-related” line on the Condensed Consolidated Statements of Net Income.

Interest expense for the quarters ended March 31, 2019 and 2018, totaled $50.6 million and $57.0 million, respectively. This decrease is primarily related to the lower average revolving debt balance during the 2019 first quarter compared to the 2018 first quarter as we paid down our revolver with proceeds from property sales post March 31, 2018.

Real estate depreciation and amortization during the first quarter of 2019 decreased to $33.4 million from $35.8 million in 2018, due to the property sales in 2018, partially offset by new investments made and the conversion of the four Steward mortgage loans to fee simple assets.

Property-related expenses totaled $3.1 million and $2.2 million for the quarters ended March 31, 2019 and 2018, respectively. As noted above under the caption “Other income,” this increase was primarily due to the grossing up of certain expenses (such as ground lease, property taxes and insurance) as part of our implementation of the lease accounting standard on January 1, 2019.

General and administrative expenses totaled $23.5 million for the 2019 first quarter, which is a $5.6 million increase from the prior year first quarter. The majority of the increase relates to stock compensation expense from our performance-based awards. Given our strong performance in 2018 with a total shareholder return of 25% along with our current acquisition pipeline and expectations to close a substantial amount of acquisitions in 2019, we believe it is more likely that such performance awards will be earned and have adjusted our stock compensation expense accordingly.

During the three months ended March 31, 2018, we sold our St. Joseph’s property at a gain of $1.5 million. We have no dispositions in the first quarter of 2019. See Note 3 to Item 1 of this Form 10-Q for further details.

In the first quarter of 2018, we incurred other expense of $4.7 million, which included non-cash and unrealized fair value adjustments on our Ernest investments that were sold or repaid in October 2018. No similar fair value adjustments were recorded in the 2019 first quarter.

Income tax expense typically includes U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $2.3 million income tax benefit for the three months ended March 31, 2019, represents the benefit from straight-line rent and other write-offs on our TRS in the quarter. The benefit is partially offset by financial taxable income from our international investments.  We utilize the asset and liability method of accounting for income taxes. Deferred tax assets are recorded to the extent we believe these assets will more likely than not be realized. In making such determination, all available positive and negative evidence is considered, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based upon our review of all positive and negative evidence, including our three-year cumulative pre-tax book loss position in certain entities, we concluded that a full valuation allowance of $3 million should continue to be recorded against certain of our international net deferred tax assets at March 31, 2019. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and incur higher income taxes in future periods as income earned.

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Reconciliation of Non-GAAP Financial Measures

Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance measure. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably over time. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, or Nareit, which represents net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.

In addition to presenting FFO in accordance with the Nareit definition, we also disclose normalized FFO, which adjusts FFO for items that relate to unanticipated or non-core events or activities or accounting changes that, if not noted, would make comparison to prior period results and market expectations less meaningful to investors and analysts.

We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and the use of normalized FFO makes comparisons of our operating results with prior periods and other companies more meaningful. While FFO and normalized FFO are relevant and widely used supplemental measures of operating and financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which can be significant economic costs that could materially impact our results of operations. FFO and normalized FFO should not be considered an alternative to net income (loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity.

The following table presents a reconciliation of net income attributable to MPT common stockholders to FFO for the three months ended March 31, 2019 and 2018 (in thousands, except per share data):

	For the Three Months Ended
	March 31, 2019			March 31, 2018
FFO information:
Net income attributable to MPT common stockholders	$	75,822		$	90,601
Participating securities’ share in earnings		(476	)		(195	)
Net income, less participating securities’ share in earnings	$	75,346		$	90,406
Depreciation and amortization		39,854			36,517
Gain on sale of real estate, net		-			(1,467	)
Funds from operations	$	115,200		$	125,456
Write-off of straight-line rent and other, net of tax benefit		2,596			6,059
Normalized funds from operations	$	117,796		$	131,515
Per diluted share data:
Net income, less participating securities’ share in earnings	$	0.20		$	0.25
Depreciation and amortization		0.10			0.09
Gain on sale of real estate, net		—			—
Funds from operations	$	0.30		$	0.34
Write-off of straight-line rent and other, net of tax benefit		0.01			0.02
Normalized funds from operations	$	0.31		$	0.36

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Pro Forma Gross Assets

Pro forma gross assets is total assets before accumulated depreciation/amortization (adjusted for our unconsolidated joint ventures) and assumes all real estate binding commitments on new investments and unfunded amounts on development deals and commenced capital improvement projects as of the applicable reporting periods are fully funded, and assumes cash on hand is used in these transactions. We believe pro forma gross assets is useful to investors as it provides a more current view of our portfolio and allows for a better understanding of our concentration levels as our binding commitments close and our other commitments are fully funded. The following table presents a reconciliation of total assets to pro forma gross assets (in thousands):

	As of			As of
	March 31, 2019			December 31, 2018
Total assets	$	9,231,453		$	8,843,643
Add:
Binding real estate commitments on new investments(1)		929,964			865,165
Unfunded amounts on development deals and commenced capital       improvement projects(2)		214,722			229,979
Accumulated depreciation and amortization		498,915			464,984
Incremental gross assets of our joint ventures(3)		367,390			375,544
Less:
Cash and cash equivalents		(995,548	)		(720,868	)
Total pro forma gross assets	$	10,246,896		$	10,058,447

(1) The 2019 column reflects a commitment to acquire 11 facilities in Australia along with the acquisition of two facilities in April 2019, while the 2018 column reflects a commitment to acquire 11 facilities in Australia along with the acquisition of one property in Germany in February 2019.

(2) Includes $77.4 million and $94.1 million of unfunded amounts on ongoing development projects and $137.3 million and $135.9 million of unfunded amounts on capital improvement projects and development projects that have commenced rent, as of March 31, 2019 and December 31, 2018, respectively.

(3) Adjustment needed to reflect our share of our joint venture’s gross assets.

Adjusted revenue

Adjusted revenue is total revenues adjusted for our pro rata portion of similar revenues in our joint venture arrangements. We believe adjusted revenue is useful to investors as it provides a more complete view of revenue across all of our investments and allows for better understanding of our revenue concentration. The following table presents a reconciliation of total revenues to total adjusted revenue (in thousands):

	For the Three Months Ended March 31, 2019		For the Three Months Ended March 31, 2018
Total revenues	$	180,454	$	205,046
Revenue from properties owned through joint venture arrangements		18,549		—
Total adjusted revenue	$	199,003	$	205,046

LIQUIDITY AND CAPITAL RESOURCES

2019 Cash Flow Activity

During the 2019 first quarter, we generated $86.9 million of cash flows from operating activities, primarily consisting of rent and interest from mortgage and other loans. We used these operating cash flows along with cash on-hand to fund our dividends of $95.4 million and certain investing activities including an initial deposit on the Healthscope acquisition discussed in Note 9, development costs on our construction projects and improvements to certain of our corporate assets.

In anticipation of future acquisitions in 2019, we sold 20.1 million shares of common stock under our at-the-market equity program in the first quarter generating net proceeds of approximately $354 million. Furthermore, in April 2019, we entered into a $1.2 billion Australian dollar term loan commitment that will close and fund once shareholder approval of the Healthscope acquisition is received.

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2018 Cash Flow Activity

During the 2018 first quarter, we generated $94.8 million of cash flows from operating activities, primarily consisting of rent and interest from mortgage and other loans. We used these operating cash flows along with cash on-hand to fund our dividends of $89.4 million and certain investing and financing activities (including a $33.6 million reduction in our revolving credit facility).

Short-term Liquidity Requirements:

As of March 31, 2019, we have no debt principal payments due in the next twelve months — see debt maturity schedule below. At May 3, 2019, our availability under our revolving credit facility plus cash on-hand approximated $2 billion. We believe this liquidity along with our current monthly cash receipts from rent and loan interest, quarterly distributions from our joint venture arrangements, availability under our at-the-market equity program, and expected proceeds from the Australian term loan commitment is sufficient to fund our operations, debt and interest obligations, our firm commitments (including expected funding requirements on our development projects), our $2.5 billion acquisition goal (including our commitment to acquire 11 properties in Australia for approximately $860 million), and dividends in order to comply with REIT requirements for the next twelve months.

Long-term Liquidity Requirements:

As of March 31, 2019, we have no debt principal payments due between now and January 2021 when our revolving credit facility comes due (which can be extended by one year). With our liquidity at May 3, 2019 of approximately $2 billion, along with our current monthly cash receipts from rent and loan interest, quarterly distributions from our joint venture arrangements, availability under our at-the-market equity program and expected proceeds from the Australian term loan commitment, we believe we have the liquidity available to us to fund our operations, debt and interest obligations, dividends in order to comply with REIT requirements, firm commitments (including expected funding requirements on our development projects) and our 2019 acquisition goal of $2.5 billion (including our commitment to acquire the Australian portfolio).

However, our acquisition pipeline is robust, so in order to fund acquisitions above our $2.5 billion goal for 2019 and beyond and to fund debt maturities coming due in later years, we will need additional capital, and we believe the following sources are generally available in the market and we may access one or a combination of them:

• sale of equity securities;

• amending or entering into new bank term loans,

• placing new secured loans on real estate located in and outside the U.S.;

• issuance of new USD or EUR denominated debt securities, including senior unsecured notes; and/or

• proceeds from strategic property sales.

However, there is no assurance that conditions will be favorable for such possible transactions or that our plans will be successful.

As of March 31, 2019, principal payments due on our debt (which excludes the effects of any discounts, premiums, or debt issue costs recorded) are as follows (in thousands):

2019	$	—
2020		—
2021		37,802
2022		760,900
2023		—
Thereafter		3,260,900
Total	$	4,059,602

Disclosure of Contractual Obligations

We presented our contractual obligations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. Except for changes to our purchase obligations, there have been no other significant changes during the three months ended March 31, 2019.

30

The following table updates our contractual obligations schedule for updates to our purchase obligations (in thousands):

Contractual Obligations	Less Than 1 Year		1-3 Years		3-5 Years		After 5 Years		Total
Purchase obligations(1)	$	1,161,935	$	44,353	$	—	$	—	$	1,206,288

(1) Includes $930 million to fund the Healthscope transaction as described in Note 9 along with the two acquisitions completed in April 2019, and $214.7 million for future expenditures related to development projects along with funding for other capital improvement projects.

Distribution Policy

The table below is a summary of our distributions declared during the two year period ended March 31, 2019:

Declaration Date	Record Date	Date of Distribution	Distribution per Share
February 14, 2019	March 14, 2019	April 11, 2019	$	0.25
November 15, 2018	December 13, 2018	January 10, 2019	$	0.25
August 16, 2018	September 13, 2018	October 11, 2018	$	0.25
May 24, 2018	June 14, 2018	July 12, 2018	$	0.25
February 15, 2018	March 15, 2018	April 12, 2018	$	0.25
November 9, 2017	December 7, 2017	January 11, 2018	$	0.24
August 17, 2017	September 14, 2017	October 12, 2017	$	0.24
May 25, 2017	June 15, 2017	July 14, 2017	$	0.24

We intend to pay to our stockholders, within the time periods prescribed by the Internal Revenue Code (“Code”), all or substantially all of our annual taxable income, including taxable gains from the sale of real estate and recognized gains on the sale of securities. It is our policy to make sufficient cash distributions to stockholders in order for us to maintain our status as a REIT under the Code and to avoid corporate income and excise taxes on undistributed income. However, our Credit Facility limits the amount of dividends we can pay - see Note 4 in Item 1 to this Form 10-Q for further information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate or foreign currency exposure. For interest rate hedging, these decisions are principally based on our policy to match investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. For foreign currency hedging, these decisions are principally based on how our investments are financed, the long-term nature of our investments, the need to repatriate earnings back to the U.S. and the general trend in foreign currency exchange rates.

In addition, the value of our facilities will be subject to fluctuations based on changes in local and regional economic conditions and changes in the ability of our tenants to generate profits, all of which may affect our ability to refinance our debt, if necessary. The changes in the value of our facilities would be impacted also by changes in “cap” rates, which is measured by the current base rent divided by the current market value of a facility.

Our primary exposure to market risks relates to fluctuations in interest rates and foreign currency. The following analyses present the sensitivity of the market value, earnings and cash flows of our significant financial instruments to hypothetical changes in interest rates and exchange rates as if these changes had occurred. The hypothetical changes chosen for these analyses reflect our view of changes that are reasonably possible over a one-year period. These forward looking disclosures are selective in nature and only address the potential impact from these hypothetical changes. They do not include other potential effects which could impact our business as a result of changes in market conditions. In addition, they do not include measures we may take to minimize our exposure such as entering into future interest rate swaps to hedge against interest rate increases on our variable rate debt.

Interest Rate Sensitivity

For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common stockholders or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net income to common stockholders and cash flows, assuming other factors are held constant. At March 31, 2019, our outstanding debt totaled $4.0 billion, which consisted of fixed-rate debt of approximately $3.8 billion and variable rate debt of $0.2 billion. If market

31

interest rates increase by 1%, the fair value of our debt at March 31, 2019 would decrease by $6.5 million. Changes in the fair value of our fixed rate debt will not have any impact on us unless we decided to repurchase the debt in the open market.

If market rates of interest on our variable rate debt increase by 1%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by $0.1 million per year. If market rates of interest on our variable rate debt decrease by 1%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by $0.1 million per year. This assumes that the average amount outstanding under our variable rate debt for a year is $0.2 billion, the balance of such variable rate debt at March 31, 2019.

Foreign Currency Sensitivity

With our investments in Germany, the United Kingdom, Spain, and Italy, we are subject to fluctuations in the euro and British pound to U.S. dollar currency exchange rates. Increases or decreases in the value of the euro to U.S. dollar and the British pound to U.S. dollar exchange rates may impact our financial condition and/or our results of operations. Based solely on operating results to-date in 2019 and on an annualized basis, if the euro exchange rate were to change by 5%, our net income and FFO would change by approximately $0.2 million and $1.4 million, respectively. Based solely on operating results to-date in 2019 and on an annualized basis, if the British pound exchange rate were to change by 5%, our net income and FFO would change by approximately $0.1 million and $0.2 million, respectively.

Item 4. Controls and Procedures.

Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.

We have adopted and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b), under the Securities Exchange Act of 1934, as amended, we have carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

32

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

The information contained in Note 9 “Commitments and Contingencies” of Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated by reference into this Item 1.

Item 1A. Risk Factors.

There have been no material changes to the Risk Factors as presented in our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) None.

(b) Not applicable.

(c) None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

(a) None.

(b) None.

33

Item 6. Exhibits

Exhibit Number	Description
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (Medical Properties Trust, Inc.)
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (Medical Properties Trust, Inc.)
31.3*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (MPT Operating Partnership, L.P.)
31.4*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (MPT Operating Partnership, L.P.)
32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Medical Properties Trust, Inc.)
32.2**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (MPT Operating Partnership, L.P.)
Exhibit 101.INS	XBRL Instance Document
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Furnished herewith.

34

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MEDICAL PROPERTIES TRUST, INC.
By:	/s/ J. Kevin Hanna
	J. Kevin Hanna
	Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer (Principal Accounting Officer)

MPT OPERATING PARTNERSHIP, L.P.
By:	/s/ J. Kevin Hanna
	J. Kevin Hanna
	Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer of the sole member of the general partner of MPT Operating Partnership, L.P. (Principal Accounting Officer)

Date: May 10, 2019

35

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Edward K. Aldag, Jr., certify that:

1) I have reviewed this quarterly report on Form 10-Q of Medical Properties Trust, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2019	/s/ Edward K. Aldag, Jr.
	Edward K. Aldag, Jr.
	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, R. Steven Hamner, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Medical Properties Trust, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2019	/s/ R. Steven Hamner
	R. Steven Hamner
	Executive Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Edward K. Aldag, Jr., certify that:

1) I have reviewed this quarterly report on Form 10-Q of MPT Operating Partnership, L.P.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2019	/s/ Edward K. Aldag, Jr.
	Edward K. Aldag, Jr.
	Chairman, President and Chief Executive Officer of the sole member of the general partner of MPT Operating Partnership, L.P.

EX-31.4

Exhibit 31.4

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, R. Steven Hamner, certify that:

1) I have reviewed this quarterly report on Form 10-Q of MPT Operating Partnership, L.P.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2019	/s/ R. Steven Hamner
	R. Steven Hamner
	Executive Vice President and Chief Financial Officer of the sole member of the general partner of MPT Operating Partnership, L.P.

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Medical Properties Trust, Inc. (the “Company”) for the quarter ended March 31, 2019 (the “Report”), each of the undersigned, Edward K. Aldag, Jr. and R. Steven Hamner, certifies, pursuant to Section 18 U.S.C. Section 1350, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2019	/s/ Edward K. Aldag, Jr.
	Edward K. Aldag, Jr.
	Chairman, President and Chief Executive Officer
	/s/ R. Steven Hamner
	R. Steven Hamner
	Executive Vice President and Chief Financial Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of MPT Operating Partnership, L.P. (the “Company”) for the quarter ended March 31, 2019 (the “Report”), each of the undersigned, Edward K. Aldag, Jr. and R. Steven Hamner, certifies, pursuant to Section 18 U.S.C. Section 1350, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2019	/s/ Edward K. Aldag, Jr.
	Edward K. Aldag, Jr.
	Chairman, President and Chief Executive Officer of the sole member of the general partner of MPT Operating Partnership, L.P.
	/s/ R. Steven Hamner
	R. Steven Hamner
	Executive Vice President and Chief Financial Officer of the sole member of the general partner of MPT Operating Partnership, L.P.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 03, 2019
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	MPW
Entity Registrant Name	MEDICAL PROPERTIES TRUST INC
Entity Central Index Key	0001287865
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		394,424,343
MPT Operating Partnership, L.P. [Member]
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	MPT OPERATING PARTNERSHIP, L.P.
Entity Central Index Key	0001524607
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Real estate assets
Land, buildings and improvements, intangible lease assets, and other	$ 5,394,092	$ 5,268,459
Mortgage loans	1,214,780	1,213,322
Net investment in direct financing leases	684,547	684,053
Gross investment in real estate assets	7,293,419	7,165,834
Accumulated depreciation and amortization	(498,915)	(464,984)
Net investment in real estate assets	6,794,504	6,700,850
Cash and cash equivalents	995,548	820,868
Interest and rent receivables	24,788	25,855
Straight-line rent receivables	243,556	220,848
Equity investments	506,123	520,058
Other loans	365,402	373,198
Other assets	301,532	181,966
Total Assets	9,231,453	8,843,643
Liabilities
Debt, net	4,023,568	4,037,389
Accounts payable and accrued expenses	188,956	204,325
Deferred revenue	9,979	13,467
Obligations to tenants and other lease liabilities	118,474	27,524
Total Liabilities	4,340,977	4,282,705
Equity / Capital
Preferred stock, $0.001 par value. Authorized 10,000 shares; no shares outstanding
Common stock, $0.001 par value. Authorized 500,000 shares; issued and outstanding — 391,839 shares at March 31, 2019 and 370,637 shares at December 31, 2018	392	371
Limited Partners:
Additional paid-in capital	4,803,672	4,442,948
Retained earnings	141,427	162,768
Accumulated other comprehensive loss	(67,892)	(58,202)
Treasury shares, at cost	(777)	(777)
Total Medical Properties Trust, Inc. Stockholders' Equity (MPT Operating Partnership, L.P. capital)	4,876,822	4,547,108
Non-controlling interests	13,654	13,830
Total Equity / Capital	4,890,476	4,560,938
Total Liabilities and Equity / Capital	9,231,453	8,843,643
MPT Operating Partnership, L.P. [Member]
Real estate assets
Land, buildings and improvements, intangible lease assets, and other	5,394,092	5,268,459
Mortgage loans	1,214,780	1,213,322
Net investment in direct financing leases	684,547	684,053
Gross investment in real estate assets	7,293,419	7,165,834
Accumulated depreciation and amortization	(498,915)	(464,984)
Net investment in real estate assets	6,794,504	6,700,850
Cash and cash equivalents	995,548	820,868
Interest and rent receivables	24,788	25,855
Straight-line rent receivables	243,556	220,848
Equity investments	506,123	520,058
Other loans	365,402	373,198
Other assets	301,532	181,966
Total Assets	9,231,453	8,843,643
Liabilities
Debt, net	4,023,568	4,037,389
Accounts payable and accrued expenses	91,461	108,574
Deferred revenue	9,979	13,467
Obligations to tenants and other lease liabilities	118,474	27,524
Payable due to Medical Properties Trust, Inc.	97,105	95,361
Total Liabilities	4,340,587	4,282,315
Limited Partners:
Accumulated other comprehensive loss	(67,892)	(58,202)
Total Medical Properties Trust, Inc. Stockholders' Equity (MPT Operating Partnership, L.P. capital)	4,877,212	4,547,498
Non-controlling interests	13,654	13,830
Total Equity / Capital	4,890,866	4,561,328
Total Liabilities and Equity / Capital	9,231,453	8,843,643
General Partner [Member] | MPT Operating Partnership, L.P. [Member]
Equity / Capital
General Partner — issued and outstanding — 3,647 units at March 31, 2018and 3,644 units at December 31, 2017	49,478	46,084
Limited Partners:
Total Equity / Capital	49,478	46,084
Common Units [Member] | MPT Operating Partnership, L.P. [Member]
Limited Partners:
Limited Partners Capital	$ 4,895,626	$ 4,559,616

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	391,839,000	370,637,000
Common stock, shares outstanding	391,839,000	370,637,000
General Partner [Member] | MPT Operating Partnership, L.P. [Member]
General partner, units issued	3,918,000	3,706,000
General partner, units outstanding	3,918,000	3,706,000
Common Units [Member] | MPT Operating Partnership, L.P. [Member]
Limited Partners, units issued	387,921,000	366,931,000
Limited Partners, units outstanding	387,921,000	366,931,000
LTIP Units [Member] | MPT Operating Partnership, L.P. [Member]
LTIP Units, shares issued	232,000	232,000
LTIP Units, shares outstanding	232,000	232,000

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Condensed Consolidated Statements of Net Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Rent billed	$ 108,598	$ 128,011
Straight-line rent	20,651	15,791
Income from direct financing leases	17,280	17,681
Interest and other income	33,925	43,563
Total revenues	180,454	205,046
Expenses
Interest	50,551	57,023
Real estate depreciation and amortization	33,352	35,802
Property-related	3,066	2,184
General and administrative	23,451	17,818
Total expenses	110,420	112,827
Other income (expense)
Gain on sale of real estate, net		1,467
Earnings from equity interests	3,720	3,271
Other	204	(4,739)
Total other income (expense)	3,924	(1)
Income before income tax	73,958	92,218
Income tax benefit (expense)	2,333	(1,175)
Net income	76,291	91,043
Net income attributable to non-controlling interests	(469)	(442)
Net income attributable to MPT common stockholders (Operating Partnership partners)	$ 75,822	$ 90,601
Earnings per common share (units) — basic and diluted
Net income attributable to MPT common stockholders (Operating Partnership partners)	$ 0.20	$ 0.25
Weighted average shares (units) outstanding — basic	380,551	364,882
Weighted average shares (units) outstanding — diluted	381,675	365,343
Dividends declared per common share (unit)	$ 0.25	$ 0.25
MPT Operating Partnership, L.P. [Member]
Revenues
Rent billed	$ 108,598	$ 128,011
Straight-line rent	20,651	15,791
Income from direct financing leases	17,280	17,681
Interest and other income	33,925	43,563
Total revenues	180,454	205,046
Expenses
Interest	50,551	57,023
Real estate depreciation and amortization	33,352	35,802
Property-related	3,066	2,184
General and administrative	23,451	17,818
Total expenses	110,420	112,827
Other income (expense)
Gain on sale of real estate, net		1,467
Earnings from equity interests	3,720	3,271
Other	204	(4,739)
Total other income (expense)	3,924	(1)
Income before income tax	73,958	92,218
Income tax benefit (expense)	2,333	(1,175)
Net income	76,291	91,043
Net income attributable to non-controlling interests	(469)	(442)
Net income attributable to MPT common stockholders (Operating Partnership partners)	$ 75,822	$ 90,601
Earnings per common share (units) — basic and diluted
Net income attributable to MPT common stockholders (Operating Partnership partners)	$ 0.20	$ 0.25
Weighted average shares (units) outstanding — basic	380,551	364,882
Weighted average shares (units) outstanding — diluted	381,675	365,343
Dividends declared per common share (unit)	$ 0.25	$ 0.25

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net income	$ 76,291	$ 91,043
Other comprehensive income:
Unrealized loss on interest rate swap	(3,772)
Foreign currency translation (loss) gain	(5,918)	16,088
Total comprehensive income	66,601	107,131
Comprehensive income attributable to non-controlling interests	(469)	(442)
Comprehensive income attributable to MPT common stockholders (Operating Partnership Partners)	66,132	106,689
MPT Operating Partnership, L.P. [Member]
Net income	76,291	91,043
Other comprehensive income:
Unrealized loss on interest rate swap	(3,772)
Foreign currency translation (loss) gain	(5,918)	16,088
Total comprehensive income	66,601	107,131
Comprehensive income attributable to non-controlling interests	(469)	(442)
Comprehensive income attributable to MPT common stockholders (Operating Partnership Partners)	$ 66,132	$ 106,689

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Condensed Consolidated Statements of Equity / Capital - USD ($) shares in Thousands, $ in Thousands	Total	MPT Operating Partnership, L.P. [Member]	MPT Operating Partnership, L.P. [Member] General Partner [Member]	Common Par Value [Member]	Common Par Value [Member] MPT Operating Partnership, L.P. [Member] Limited Partner [Member]	Additional Paid-in Capital [Member]	Retained Earnings (Deficit) [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Other Comprehensive Loss [Member] MPT Operating Partnership, L.P. [Member]	Treasury Shares [Member]	Non-Controlling Interests [Member]	Non-Controlling Interests [Member] MPT Operating Partnership, L.P. [Member]	Long Term Incentive Plan [Member] MPT Operating Partnership, L.P. [Member] Limited Partner [Member]
Beginning balance at Dec. 31, 2017	$ 3,835,205	$ 3,835,595	$ 38,489	$ 364	$ 3,808,583	$ 4,333,027	$ (485,932)	$ (26,049)	$ (26,049)	$ (777)	$ 14,572	$ 14,572
Beginning balance (in shares) at Dec. 31, 2017			3,644	364,424	360,780								292
Net income	91,043	91,043	$ 906		$ 89,695		90,601				442	442
Cumulative effect of change in accounting principles	1,938	1,938	19		1,919		1,938
Foreign currency translation gain (loss)	16,088	16,088						16,088	16,088
Stock (Unit) vesting and amortization of stock (unit)-based compensation	1,856	1,856	$ 19	$ 1	$ 1,837	1,855
Stock (Unit) vesting and amortization of stock (unit)-based compensation (shares)			3	271	268
Conversion of LTIP units to common units (shares)					60								(60)
Redemption of MOP units/common units	(816)	(816)			$ (816)	(816)
Redemption of MOP units/common units (shares)					(60)
Distributions to non-controlling interests	(620)	(620)									(620)	(620)
Proceeds from offering (net of offering costs)	(94)	(94)	$ (1)		$ (93)	(94)
Dividends (Distributions) declared ($0.25 in 2018 and $0.25 in 2019 per common share/ unit)	(91,411)	(91,411)	(914)		(90,497)		(91,411)
Ending balance at Mar. 31, 2018	3,853,189	3,853,579	$ 38,518	$ 365	$ 3,810,628	4,333,972	(484,804)	(9,961)	(9,961)	(777)	14,394	14,394
Ending balance (in shares) at Mar. 31, 2018			3,647	364,695	361,048								232
Beginning balance at Dec. 31, 2018	4,560,938	4,561,328	$ 46,084	$ 371	$ 4,559,616	4,442,948	162,768	(58,202)	(58,202)	(777)	13,830	13,830
Beginning balance (in shares) at Dec. 31, 2018			3,706	370,637	366,931								232
Net income	76,291	76,291	$ 758		$ 75,064		75,822				469	469
Unrealized loss on interest rate swap	(3,772)	(3,772)						(3,772)	(3,772)
Foreign currency translation gain (loss)	(5,918)	(5,918)						(5,918)	(5,918)
Stock (Unit) vesting and amortization of stock (unit)-based compensation	6,715	6,715	$ 68	$ 1	$ 6,647	6,714
Stock (Unit) vesting and amortization of stock (unit)-based compensation (shares)			11	1,055	1,044
Distributions to non-controlling interests	(645)	(645)									(645)	(645)
Proceeds from offering (net of offering costs)	354,030	354,030	$ 3,540	$ 20	$ 350,490	354,010
Proceeds from offering (net of offering costs) (shares)			201	20,147	19,946
Dividends (Distributions) declared ($0.25 in 2018 and $0.25 in 2019 per common share/ unit)	(97,163)	(97,163)	$ (972)		$ (96,191)		(97,163)
Ending balance at Mar. 31, 2019	$ 4,890,476	$ 4,890,866	$ 49,478	$ 392	$ 4,895,626	$ 4,803,672	$ 141,427	$ (67,892)	$ (67,892)	$ (777)	$ 13,654	$ 13,654
Ending balance (in shares) at Mar. 31, 2019			3,918	391,839	387,921								232

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Condensed Consolidated Statements of Equity / Capital (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Dividends (Distributions) declared per common share / unit	$ 0.25	$ 0.25
MPT Operating Partnership, L.P. [Member]
Dividends (Distributions) declared per common share / unit	0.25	0.25
MPT Operating Partnership, L.P. [Member] | General Partner [Member]
Dividends (Distributions) declared per common share / unit	0.25	0.25
Retained Earnings (Deficit) [Member]
Dividends (Distributions) declared per common share / unit	0.25	0.25
Common Par Value [Member] | MPT Operating Partnership, L.P. [Member] | Limited Partner [Member]
Dividends (Distributions) declared per common share / unit	$ 0.25	$ 0.25

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities
Net income	$ 76,291	$ 91,043
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	34,675	37,858
Amortization of deferred financing costs and debt discount	1,827	1,789
Direct financing lease interest accretion	(2,337)	(2,340)
Straight-line rent revenue	(23,959)	(20,377)
Share / (Unit)-based compensation expense	6,715	1,856
Gain from sale of real estate, net		(1,467)
Straight-line rent and other write-off, net of tax benefit	2,596	6,059
Other adjustments	2,249	(3,217)
Changes in:
Interest and rent receivables	(1,193)	(3,678)
Accounts payable and accrued expenses	(9,940)	(12,729)
Net cash provided by operating activities	86,924	94,797
Investing activities
Cash paid for acquisitions and other related investments	(6,492)
Net proceeds from sale of real estate		148,809
Principal received on loans receivable	420	1,734
Investment in loans receivable	(1,185)	(149,080)
Construction in progress and other	(160,736)	(8,399)
Net cash used for investing activities	(167,993)	(6,936)
Financing activities
Revolving credit facilities, net	9,097	(33,590)
Distributions paid	(95,419)	(89,403)
Lease deposits and other obligations to tenants	3,677	1,299
Proceeds from sale of common shares, net of offering costs	354,030	(94)
Debt issuance costs paid and other financing activities	(677)	(1,549)
Net cash provided by (used for) financing activities	270,708	(123,337)
Increase (decrease) in cash, cash equivalents and restricted cash for period	189,639	(35,476)
Effect of exchange rate changes	(11,450)	2,774
Cash, cash equivalents and restricted cash at beginning of period	822,425	172,247
Cash, cash equivalents and restricted cash at end of period	1,000,614	139,545
Interest paid	51,296	57,025
Supplemental schedule of non-cash financing activities:
Distributions declared, unpaid	97,163	91,411
Cash, cash equivalents and restricted cash are comprised of the following:
Cash and cash equivalents at beginning of period	820,868	171,472
Restricted cash, included in Other assets at beginning of period	$ 1,557	$ 775
Restricted cash and cash equivalents, noncurrent, asset, statement of financial position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Cash, cash equivalents and restricted cash at beginning of period	$ 822,425	$ 172,247
Cash and cash equivalents at end of period	995,548	138,314
Restricted cash, included in Other assets at end of period	$ 5,066	$ 1,231
Restricted cash and cash equivalents, noncurrent, asset, statement of financial position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Cash, cash equivalents and restricted cash at end of period	$ 1,000,614	$ 139,545
MPT Operating Partnership, L.P. [Member]
Operating activities
Net income	76,291	91,043
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	34,675	37,858
Amortization of deferred financing costs and debt discount	1,827	1,789
Direct financing lease interest accretion	(2,337)	(2,340)
Straight-line rent revenue	(23,959)	(20,377)
Share / (Unit)-based compensation expense	6,715	1,856
Gain from sale of real estate, net		(1,467)
Straight-line rent and other write-off, net of tax benefit	2,596	6,059
Other adjustments	2,249	(3,217)
Changes in:
Interest and rent receivables	(1,193)	(3,678)
Accounts payable and accrued expenses	(9,940)	(12,729)
Net cash provided by operating activities	86,924	94,797
Investing activities
Cash paid for acquisitions and other related investments	(6,492)
Net proceeds from sale of real estate		148,809
Principal received on loans receivable	420	1,734
Investment in loans receivable	(1,185)	(149,080)
Construction in progress and other	(160,736)	(8,399)
Net cash used for investing activities	(167,993)	(6,936)
Financing activities
Revolving credit facilities, net	9,097	(33,590)
Distributions paid	(95,419)	(89,403)
Lease deposits and other obligations to tenants	3,677	1,299
Proceeds from sale of units, net of offering costs	354,030	(94)
Debt issuance costs paid and other financing activities	(677)	(1,549)
Net cash provided by (used for) financing activities	270,708	(123,337)
Increase (decrease) in cash, cash equivalents and restricted cash for period	189,639	(35,476)
Effect of exchange rate changes	(11,450)	2,774
Cash, cash equivalents and restricted cash at beginning of period	822,425	172,247
Cash, cash equivalents and restricted cash at end of period	1,000,614	139,545
Interest paid	51,296	57,025
Supplemental schedule of non-cash financing activities:
Distributions declared, unpaid	97,163	91,411
Cash, cash equivalents and restricted cash are comprised of the following:
Cash and cash equivalents at beginning of period	820,868	171,472
Restricted cash, included in Other assets at beginning of period	$ 1,557	$ 775
Restricted cash and cash equivalents, noncurrent, asset, statement of financial position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Cash, cash equivalents and restricted cash at beginning of period	$ 822,425	$ 172,247
Cash and cash equivalents at end of period	995,548	138,314
Restricted cash, included in Other assets at end of period	$ 5,066	$ 1,231
Restricted cash and cash equivalents, noncurrent, asset, statement of financial position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Cash, cash equivalents and restricted cash at end of period	$ 1,000,614	$ 139,545

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Organization

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Organization

1. Organization

Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003, under the Maryland General Corporation Law for the purpose of engaging in the business of investing in, owning, and leasing healthcare real estate. Our operating partnership subsidiary, MPT Operating Partnership, L.P., (the “Operating Partnership”) through which we conduct all of our operations, was formed in September 2003. Through another wholly-owned subsidiary, Medical Properties Trust, LLC, we are the sole general partner of the Operating Partnership. At present, we directly own substantially all of the limited partnership interests in the Operating Partnership and have elected to report our required disclosures and that of the Operating Partnership on a combined basis, except where material differences exist.

We have operated as a real estate investment trust (“REIT”) since April 6, 2004 and elected REIT status upon the filing in September 2005 of the calendar year 2004 federal income tax return. Accordingly, we will generally not be subject to federal income tax in the United States (“U.S.”), provided that we continue to qualify as a REIT and our distributions to our stockholders equal or exceed our taxable income. Certain non-real estate activities we undertake are conducted by entities which we elected to be treated as taxable REIT subsidiaries (“TRS”). Our TRS entities are subject to both U.S. federal and state income taxes. For our properties located outside the U.S., we are subject to the local taxes of the jurisdictions where our properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes in the U.S. as such income flows through our REIT.

Our primary business strategy is to acquire and develop real estate and improvements, primarily for long-term lease to providers of healthcare services, such as operators of general acute care hospitals, inpatient physical rehabilitation hospitals, and long-term acute care hospitals. We also make mortgage and other loans to operators of similar facilities. In addition, we may obtain profits or equity interests in our tenants, from time to time, in order to enhance our overall return. We manage our business as a single business segment. All of our properties are currently located in the U.S. and Europe.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information, including rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.

For information about significant accounting policies, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to these significant accounting policies other than the following:

On January 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, “Leases”, (“ASU 2016-02”). ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). We adopted this standard using the modified retrospective approach and have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, permits the following: no reassessment of whether existing contracts are or contain a lease; no reassessment of lease classification for existing leases; and no reassessment of initial direct costs for existing leases. Additionally, we made certain elections permitted in accordance with ASU 2018-11, “Leases (Topic 842): – Targeted Improvements.” which (1) permits entities to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in its financial statements and (2) permits lessors to account for lease and non-lease components as a single lease component in a contract if certain criteria are met.

The standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method (for finance leases) or on a straight-line basis (for operating leases) over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will remain off balance sheet with lease expense recognized on a straight-line basis over the lease term, similar to previous guidance for operating leases. The standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases.

For our leases in which we are the lessee, including ground leases on which certain of our facilities reside, along with corporate office and equipment leases, we recorded a right-of-use asset and offsetting lease liability of approximately $84 million upon adoption of this standard – resulting in no material cumulative effect adjustment. From a lessor perspective, we did not change the classification or accounting of our existing leases except, we are now grossing up our income statement for certain operating expenses, such as property taxes and insurance, that the tenants of our facilities are required to reimburse us for pursuant to our “triple-net” leases. See Note 10 for additional detail.

Recent Accounting Developments:

Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). This standard requires a new forward-looking “expected loss” model to be used for our financing receivables, including direct financing leases and loan receivables, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is effective for us beginning January 1, 2020. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

Reclassifications and Revisions

Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.

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Real Estate and Lending Activities

3 Months Ended

Mar. 31, 2019

Real Estate [Abstract]

Real Estate and Lending Activities

3. Real Estate and Lending Activities

Acquisitions

We acquired the following assets (in thousands):

	Three Months Ended March 31,
	2019		2018
Assets Acquired
Land	$	169	$	—
Building		5,327		—
Intangible lease assets — subject to amortization		996		—
Total assets acquired	$	6,492	$	—

On February 8, 2019, we acquired an inpatient rehabilitation hospital in Germany for €5.7 million (including real estate transfer taxes). This acquisition was the final property to close as part of a four-hospital portfolio that we agreed to purchase for an aggregate amount of €23 million (including real estate transfer taxes).  The property is leased to affiliates of Median Kliniken S.à.r.l. (“MEDIAN”), pursuant to a new 27-year master lease with annual escalators at the greater of 1% or 70% of the change in German consumer price index (“CPI”).

Development Activities

During the 2018 first quarter, we completed construction on a $25.5 million inpatient rehabilitation facility located in Flagstaff, Arizona. This facility opened on March 1, 2018 and is being leased to Ernest Health, Inc. (“Ernest”) pursuant to a stand-alone lease, with terms generally similar to the original master lease.

See table below for a status update on our current development projects (in thousands):

Property	Commitment		Costs Incurred as of March 31, 2019		Estimated Rent Commencement Date
Circle Health (Birmingham, England)	$	44,241	$	34,705	3Q 2019
Circle Health Rehabilitation (Birmingham, England)		21,979		11,677	3Q 2019
Surgery Partners (Idaho Falls, Idaho)		113,468		55,857	1Q 2020
	$	179,688	$	102,239

Disposals

On March 1, 2018, we sold the real estate of St. Joseph Medical Center in Houston, Texas, for approximately $148 million to Steward Health Care System LLC (“Steward”). In return, we received a mortgage loan equal to the purchase price, with such loan secured by the underlying real estate. The mortgage loan had terms consistent with the other mortgage loans in the Steward portfolio. This transaction resulted in a gain of $1.5 million, offset by a $1.7 million non-cash charge to revenue to write-off related straight-line rent receivables on this property.

Leasing Operations (Lessor)

As noted earlier, we acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases (typical initial fixed terms ranging from 10 to 15 years) and most include renewal options at the election of our tenants, generally in five year increments. More than 95% of our leases provide annual rent escalations based on increases in the consumer price index (or similar index outside the U.S.) and/or fixed minimum annual escalations ranging from 0.5% to 3.0%.  Many of our domestic leases contain purchase options with pricing set at various terms but in no case less than our total investment.  For five properties with a carrying value of $210 million, our leases require a residual value guarantee from the tenant.  Our leases typically require the tenant to handle and bear most of the costs associated with our properties including repair/maintenance, property taxes, and insurance. We routinely inspect our properties to ensure the residual value of each of our assets is being maintained.  Except for leases noted below as direct finance leases (“DFLs”), all of our leases are classified as operating leases.

The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under noncancelable leases as of March 31, 2019 (in thousands):

	Total Under Operating Leases		Total Under DFLs		Total
2019 (nine months only)	$	329,487	$	48,491	$	377,978
2020		438,596		66,008		504,604
2021		447,232		67,388		514,620
2022		452,173		68,796		520,969
2023		459,222		70,232		529,454
Thereafter		9,636,734		1,550,857		11,187,591
	$	11,763,444	$	1,871,772	$	13,635,216

Direct Financing Leases

At March 31, 2019, leases on 14 Ernest facilities, ten Prime Healthcare Services, Inc. (“Prime”) facilities, and two Alecto Healthcare Services LLC (“Alecto”) facilities are accounted for as DFLs. The components of our net investment in DFLs consisted of the following (in thousands):

	As of March 31, 2019			As of December 31, 2018
Minimum lease payments receivable	$	2,078,099		$	2,091,504
Estimated residual values		421,893			424,719
Less: Unearned income		(1,815,445	)		(1,832,170	)
Net investment in direct financing leases	$	684,547		$	684,053

On March 15, 2018, we entered into a new lease agreement of our long-term acute care facility in Boise, Idaho with a joint venture formed by Vibra Healthcare, LLC (“Vibra”) and Ernest. The new lease had an initial 15-year fixed term (ending March 2033) with three extension options of five years each. With this transaction, we incurred a non-cash charge of $1.5 million to write-off DFL unbilled interest associated with the previous lease to Ernest on this property.

Adeptus Health Transition Properties

As noted in previous filings, effective October 2, 2017, we had 16 properties transitioning away from Adeptus Health, Inc. (“Adeptus”) in stages over a two year period as part of Adeptus’ confirmed plan of reorganization under Chapter 11 of the Bankruptcy Code. At March 31, 2019, nine of these properties have been re-leased at rates consistent with that of the previous Adeptus lease, and one property in the Dallas market was sold in April 2019. Of the six remaining facilities (representing less than 0.6% of our total assets at March 31, 2019), five remain vacant and the final property will be transitioned away from Adeptus on October 1, 2019.

At March 31, 2019, Adeptus is current on its rent obligations to us. Although no assurances can be made that we will not recognize a loss in the future, we believe, at March 31, 2019, that the sale or re-leasing of the remaining six transition facilities will not result in any material loss or additional impairment.

Gilbert and Florence Facilities

In the first quarter of 2018, we terminated the lease at our Gilbert and Florence, Arizona facilities due to the tenant not meeting its rent obligations pursuant to the lease. As a result of the lease terminating, we recorded a charge of $1.1 million to reserve against the straight-line rent receivables. At March 31, 2019, all outstanding receivables due from the former tenant of Florence and Gilbert were completely reserved. On December 14, 2018, the Florence facility was re-leased to Steward pursuant to our original master lease with them with a term to begin in the second quarter of 2019. At March 31, 2019, our Gilbert facility is vacant. Although no assurances can be made that we will not have any impairment charges in the future, we believe our investment in the Gilbert facility (less than 0.2% of total assets at March 31, 2019), is fully recoverable.

Alecto Facilities

At March 31, 2019, we own four acute care facilities that are leased to Alecto and have a mortgage loan on a fifth property. With the decline in the operating results of the facility tenant, we recorded a charge to reserve against the straight-line rent and other receivables outstanding during the three months ended March 31, 2019. At March 31, 2019, our total overall investment in these properties is approximately 1% of our total assets.

Loans

The following is a summary of our loans (in thousands):

	As of March 31, 2019		As of December 31, 2018
Mortgage loans	$	1,214,780	$	1,213,322
Other loans		365,402		373,198
Total	$	1,580,182	$	1,586,520

Other loans typically consist of loans to our tenants for acquisitions and working capital purposes, and include our shareholder loan made to the joint venture with Primotop Holdings S.à.r.l. (“Primotop”) in the amount of €290 million.

Concentrations of Credit Risk

We monitor concentration risk in several ways due to the nature of our real estate assets that are vital to the communities in which they are located and given our history of being able to replace inefficient operators of our facilities if needed, with more effective operators:

1) Facility concentration – At March 31, 2019, we had no investment in any single property greater than 4% of our total assets, which is consistent with December 31, 2018.

2) Operator concentration – For the three months ended March 31, 2019, revenue from Steward and Prime of $86.6 million and $32.0 million, respectively, exceeded 10% of our total revenues. In comparison, Steward ($73.2 million), Prime ($31.8 million) and MEDIAN ($29.1 million), respectively, exceeded 10% of our total revenues for the first three months of 2018.

3) Geographic concentration – At March 31, 2019, investments in the U.S. and Europe represented approximately 80% and 20%, respectively, of our total assets, which is consistent with December 31, 2018.

4) Facility type concentration – For the three months ended March 31, 2019, approximately 86% of our revenues are from our general acute care facilities, while rehabilitation and long-term acute care facilities make up 10% and 4%, respectively. These percentages are similar to those for the first three months of 2018.

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Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt

4. Debt

The following is a summary of debt (dollar amounts in thousands):

	As of March 31, 2019			As of December 31, 2018
Revolving credit facility(A)	$	37,802		$	28,059
Term loan		200,000			200,000
4.000% Senior Unsecured Notes due 2022(B)		560,900			573,350
5.500% Senior Unsecured Notes due 2024		300,000			300,000
6.375% Senior Unsecured Notes due 2024		500,000			500,000
3.325% Senior Unsecured Notes due 2025(B)		560,900			573,350
5.250% Senior Unsecured Notes due 2026		500,000			500,000
5.000% Senior Unsecured Notes due 2027		1,400,000			1,400,000
	$	4,059,602		$	4,074,759
Debt issue costs, net		(36,034	)		(37,370	)
	$	4,023,568		$	4,037,389

(A) Includes £29 million and £22 million of GBP-denominated borrowings that reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

(B) These notes are Euro-denominated and reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

As of March 31, 2019, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) are as follows (in thousands):

2019	$	—
2020		—
2021		37,802
2022		760,900
2023		—
Thereafter		3,260,900
Total	$	4,059,602

Covenants

Our debt facilities impose certain restrictions on us, including restrictions on our ability to: incur debts; create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or other assets; and change our business. In addition, the credit agreements governing our revolving credit and term loan agreement (“Credit Facility”) limit the amount of dividends we can pay as a percentage of normalized adjusted funds from operations, as defined in the agreements, on a rolling four quarter basis. At March 31, 2019, the dividend restriction was 95% of normalized adjusted funds from operations (“NAFFO”). The indentures governing our senior unsecured notes also limit the amount of dividends we can pay based on the sum of 95% of NAFFO, proceeds of equity issuances and certain other net cash proceeds. Finally, our senior unsecured notes require us to maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.

In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, including covenants relating to our total leverage ratio, fixed charge coverage ratio, secured leverage ratio, consolidated adjusted net worth, unsecured leverage ratio, and unsecured interest coverage ratio. The Credit Facility also contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with our covenants. If an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and payable. At March 31, 2019, we were in compliance with all such financial and operating covenants.

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Common Stock/Partner's Capital

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Common Stock/Partner's Capital

5. Common Stock/Partners’ Capital

Medical Properties Trust, Inc.

In the 2019 first quarter, we sold 20.1 million shares of common stock under our at-the-market equity offering program, resulting in net proceeds of approximately $354 million.

We sold an additional 2.5 million shares of common stock under our at-the-market equity offering program subsequent to March 31, 2019, resulting in net proceeds of approximately $45 million.

MPT Operating Partnership, L.P.

At March 31, 2019, the Company has a 99.9% ownership interest in the Operating Partnership, with the remainder owned by two other partners, who are employees.

During the three months ended March 31, 2019, the Operating Partnership issued approximately 20.1 million units in direct response to the common stock at-the-market offerings by Medical Properties Trust, Inc. during the same period.

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Stock Awards

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Awards

6. Stock Awards

We adopted the 2013 Equity Incentive Plan (the “Equity Incentive Plan”) during the second quarter of 2013, which authorizes the issuance of common stock options, restricted stock, restricted stock units, deferred stock units, stock appreciation rights, performance units and awards of interests in our Operating Partnership. The Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors. We have reserved 8,196,770 shares of common stock for awards under the Equity Incentive Plan. No shares remain available for future stock awards as of March 31, 2019. Share-based compensation expense totaled $6.7 million and $1.9 million for the three months ended March 31, 2019 and 2018, respectively.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

We have various assets and liabilities that are considered financial instruments. We estimate that the carrying value of cash and cash equivalents and accounts payable and accrued expenses approximate their fair values. We estimate the fair value of our interest and rent receivables using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar receivables would be made to others with similar credit ratings and for the same remaining maturities. The fair value of our mortgage loans and other loans are estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We determine the fair value of our senior unsecured notes using Level 2 inputs such as quotes from securities dealers and market makers. We estimate the fair value of our revolving credit facility and term loan using Level 2 inputs based on the present value of future payments, discounted at a rate which we consider appropriate for such debt.

Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be possible and may not be a prudent management decision. The following table summarizes fair value estimates for our financial instruments (in thousands):

	As of						As of
	March 31, 2019						December 31, 2018
Asset (Liability)	Book Value			Fair Value			Book Value			Fair Value
Interest and rent receivables	$	24,788		$	23,925		$	25,855		$	24,942
Loans(1)		1,465,182			1,552,687			1,471,520			1,490,758
Debt, net		(4,023,568	)		(4,170,310	)		(4,037,389	)		(3,947,795	)

(1) Excludes mortgage loans related to Ernest since they are recorded at fair value and discussed below.

Items Measured at Fair Value on a Recurring Basis

Our Ernest mortgage loans are measured at fair value on a recurring basis as we elected to account for these investments using the fair value option method in 2012 when we acquired an equity interest in and made an acquisition loan to Ernest. Such equity interest was sold and the acquisition loan was paid off in October 2018. We elected to account for these investments at fair value due to the size of the investments and because we believe this method was more reflective of current values. We have not made a similar election for other investments existing at March 31, 2019.

At March 31, 2019, the amounts recorded under the fair value option method were as follows (in thousands):

Asset Type	Fair Value		Original Cost		Asset Type Classification
Mortgage loans	$	115,000	$	115,000	Mortgage loans

Our mortgage loans with Ernest are recorded at fair value based on Level 2 inputs by discounting the estimated cash flows using the market rates which similar loans would be made to borrowers with similar credit ratings and the same remaining maturities.

During the first quarter of 2018, we recognized an unrealized loss on our investment in Ernest. There was no gain or loss recorded during the first three months of 2019.

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Earnings Per Share/Unit

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share/Unit

8. Earnings Per Share/Unit

Medical Properties Trust, Inc.

Our earnings per share were calculated based on the following (amounts in thousands):

	For the Three Months Ended March 31,
	2019			2018
Numerator:
Net income	$	76,291		$	91,043
Non-controlling interests’ share in net income		(469	)		(442	)
Participating securities’ share in earnings		(476	)		(195	)
Net income, less participating securities’ share in earnings	$	75,346		$	90,406
Denominator:
Basic weighted-average common shares		380,551			364,882
Dilutive potential common shares		1,124			461
Dilutive weighted-average common shares		381,675			365,343

MPT Operating Partnership, L.P.

Our earnings per common unit were calculated based on the following (amounts in thousands):

	For the Three Months Ended March 31,
	2019			2018
Numerator:
Net income	$	76,291		$	91,043
Non-controlling interests’ share in net income		(469	)		(442	)
Participating securities’ share in earnings		(476	)		(195	)
Net income, less participating securities’ share in earnings	$	75,346		$	90,406
Denominator:
Basic weighted-average units		380,551			364,882
Dilutive potential units		1,124			461
Diluted weighted-average units		381,675			365,343

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Commitments

On January 31, 2019, we entered into definitive agreements to acquire a portfolio of eleven Australian hospitals currently operated by Healthscope Ltd. (“Healthscope”) for an aggregate purchase price of approximately $859 million, of which approximately $36.4 million was paid into escrow on February 4, 2019. Upon closing, these facilities will be leased to Healthscope pursuant to master lease agreements that have an average initial term of 20 years with annual fixed escalations and multiple extension options. In a related transaction, Brookfield Business Partners L.P. together with its institutional partners (“Brookfield”) has agreed to acquire up to 100% of Healthscope’s outstanding shares. Closing of our acquisition, which is expected to be completed in the second quarter of 2019, is subject to Healthscope shareholder approval, customary real estate and regulatory approvals, the successful completion of the Brookfield transactions, and other closing conditions. In April 2019, we entered into an Australian term loan commitment in the amount of $1.2 billion Australian dollars for which closing and funding is contingent on the successful completion of the Healthscope transaction.

Contingencies

We are a party to various legal proceedings incidental to our business. In the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect our financial position, results of operations or cash flows.

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Leases (Lessee)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases (Lessee)

10. Leases (Lessee)

We have leased land on which certain of our facilities reside, along with corporate office and equipment. Our leases have remaining lease terms of 5.3 years to 42.5 years, some of which may include options to extend the leases up to, or just beyond, the depreciable life of the properties that occupy the leased land. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments.

Properties subject to ground leases are subleased to our tenants, except for three Adeptus transition properties.

The following is a summary of our lease expense (in thousands):

	Classification	Three Months Ended March 31, 2019
Operating lease cost (1)	(2)	$	2,096
Finance lease cost:
Amortization of right-of-use assets	Real estate depreciation and amortization		13
Interest on lease liabilities	Interest expense		21
Sublease income	Interest and other income		(900	)
Total lease cost		$	1,230

(1) Includes short-term leases.

(2) $1.6 million included in Property-related, with the remainder reflected in General and administrative expenses.

Fixed minimum payments due over the remaining lease term under non-cancelable leases of more than one year and amounts to be received in the future from non-cancelable subleases over their remaining lease term at March 31, 2019 are as follows (amounts in thousands):

	Operating leases			Finance leases			Amounts to be received from subleases			Net payments
2019 (1)	$	4,598		$	93		$	(2,542	)	$	2,149
2020		6,437			125			(3,456	)		3,106
2021		6,606			126			(3,561	)		3,171
2022		6,750			128			(3,715	)		3,163
2023		6,815			129			(3,719	)		3,225
Thereafter		196,788			5,045			(95,320	)		106,513	(2)
Total undiscounted minimum lease payments	$	227,994		$	5,646		$	(112,313	)	$	121,327
Less: interest		(146,478	)		(3,717	)
Present value of lease liabilities	$	81,516		$	1,929

(1) Represents remaining nine months of 2019.

(2) Reflects certain ground leases, in which we are the lessee, that have longer initial fixed terms than our existing sublease to our tenants. However, we would expect to either renew the related sublease, enter into a lease with a new tenant or early terminate the ground lease to reduce or avoid any significant impact from such ground leases.

Supplemental balance sheet information is as follows (in thousands, except lease terms and discount rate):

	Classification	March 31, 2019
Right of use assets:
Operating leases - real estate	Land, buildings and improvements, intangible lease assets, and other	$	64,995
Finance leases - real estate	Land, buildings and improvements, intangible lease assets, and other		1,939
Real estate right of use assets, net			66,934
Operating leases - corporate	Other assets		11,419
Total right of use assets, net		$	78,353
Lease liabilities:
Operating leases	Obligations to tenants and other lease liabilities	$	81,516
Financing leases	Obligations to tenants and other lease liabilities		1,929
Total lease liabilities		$	83,445
Weighted average remaining lease term:
Operating leases			32.2
Finance leases			37.7
Weighted average discount rate:
Operating leases			6.3	%
Finance leases			6.6	%

The following is supplemental cash flow information (in thousands):

	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,459
Operating cash flows from finance leases		10
Financing cash flows from finance leases		21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		1,042
Finance leases		—

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Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

11. Subsequent Events

On April 3, 2019, we closed on the acquisition of one acute care hospital in Poole, England for a purchase price of approximately £34.5 million. Upon closing, this facility was leased to BMI Healthcare, pursuant to an in-place lease with 14 years remaining on its term and fixed 2.5% annual escalators.

On April 11, 2019, we re-leased our Twelve Oaks facility to a new tenant, Advanced Diagnostics Health System, LLC, pursuant to a new 10-year lease, subject to four additional five-year extension options.

On April 12, 2019, we closed on the acquisition of one acute care hospital in Big Spring, Texas for a purchase price of $26 million. Upon closing, this facility was leased to Steward pursuant to the existing master lease agreement.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Unaudited Interim Condensed Consolidated Financial Statements

Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information, including rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.

For information about significant accounting policies, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to these significant accounting policies other than the following:

On January 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, “Leases”, (“ASU 2016-02”). ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). We adopted this standard using the modified retrospective approach and have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, permits the following: no reassessment of whether existing contracts are or contain a lease; no reassessment of lease classification for existing leases; and no reassessment of initial direct costs for existing leases. Additionally, we made certain elections permitted in accordance with ASU 2018-11, “Leases (Topic 842): – Targeted Improvements.” which (1) permits entities to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in its financial statements and (2) permits lessors to account for lease and non-lease components as a single lease component in a contract if certain criteria are met.

The standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method (for finance leases) or on a straight-line basis (for operating leases) over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will remain off balance sheet with lease expense recognized on a straight-line basis over the lease term, similar to previous guidance for operating leases. The standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases.

For our leases in which we are the lessee, including ground leases on which certain of our facilities reside, along with corporate office and equipment leases, we recorded a right-of-use asset and offsetting lease liability of approximately $84 million upon adoption of this standard – resulting in no material cumulative effect adjustment. From a lessor perspective, we did not change the classification or accounting of our existing leases except, we are now grossing up our income statement for certain operating expenses, such as property taxes and insurance, that the tenants of our facilities are required to reimburse us for pursuant to our “triple-net” leases. See Note 10 for additional detail.

Recent Accounting Developments

Recent Accounting Developments:

Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). This standard requires a new forward-looking “expected loss” model to be used for our financing receivables, including direct financing leases and loan receivables, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is effective for us beginning January 1, 2020. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

Reclassifications and Revisions

Reclassifications and Revisions

Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.

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Real Estate and Lending Activities (Tables)

3 Months Ended

Mar. 31, 2019

Real Estate [Abstract]

Assets Acquired

We acquired the following assets (in thousands):

	Three Months Ended March 31,
	2019		2018
Assets Acquired
Land	$	169	$	—
Building		5,327		—
Intangible lease assets — subject to amortization		996		—
Total assets acquired	$	6,492	$	—

Summary of Status Update on Current Development Projects

See table below for a status update on our current development projects (in thousands):

Property	Commitment		Costs Incurred as of March 31, 2019		Estimated Rent Commencement Date
Circle Health (Birmingham, England)	$	44,241	$	34,705	3Q 2019
Circle Health Rehabilitation (Birmingham, England)		21,979		11,677	3Q 2019
Surgery Partners (Idaho Falls, Idaho)		113,468		55,857	1Q 2020
	$	179,688	$	102,239

Summary of Future Minimum Lease Payments to be Received

The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under noncancelable leases as of March 31, 2019 (in thousands):

	Total Under Operating Leases		Total Under DFLs		Total
2019 (nine months only)	$	329,487	$	48,491	$	377,978
2020		438,596		66,008		504,604
2021		447,232		67,388		514,620
2022		452,173		68,796		520,969
2023		459,222		70,232		529,454
Thereafter		9,636,734		1,550,857		11,187,591
	$	11,763,444	$	1,871,772	$	13,635,216

Components of Net Investment in Direct Financing Leases

The components of our net investment in DFLs consisted of the following (in thousands):

	As of March 31, 2019			As of December 31, 2018
Minimum lease payments receivable	$	2,078,099		$	2,091,504
Estimated residual values		421,893			424,719
Less: Unearned income		(1,815,445	)		(1,832,170	)
Net investment in direct financing leases	$	684,547		$	684,053

Summary of Loans

The following is a summary of our loans (in thousands):

	As of March 31, 2019		As of December 31, 2018
Mortgage loans	$	1,214,780	$	1,213,322
Other loans		365,402		373,198
Total	$	1,580,182	$	1,586,520

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Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Summary of Debt

The following is a summary of debt (dollar amounts in thousands):

	As of March 31, 2019			As of December 31, 2018
Revolving credit facility(A)	$	37,802		$	28,059
Term loan		200,000			200,000
4.000% Senior Unsecured Notes due 2022(B)		560,900			573,350
5.500% Senior Unsecured Notes due 2024		300,000			300,000
6.375% Senior Unsecured Notes due 2024		500,000			500,000
3.325% Senior Unsecured Notes due 2025(B)		560,900			573,350
5.250% Senior Unsecured Notes due 2026		500,000			500,000
5.000% Senior Unsecured Notes due 2027		1,400,000			1,400,000
	$	4,059,602		$	4,074,759
Debt issue costs, net		(36,034	)		(37,370	)
	$	4,023,568		$	4,037,389

(A) Includes £29 million and £22 million of GBP-denominated borrowings that reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

(B) These notes are Euro-denominated and reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

Principal Payments Due on Debt

As of March 31, 2019, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) are as follows (in thousands):

2019	$	—
2020		—
2021		37,802
2022		760,900
2023		—
Thereafter		3,260,900
Total	$	4,059,602

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Summary of Fair Value Information of Financial Instruments

The following table summarizes fair value estimates for our financial instruments (in thousands):

	As of						As of
	March 31, 2019						December 31, 2018
Asset (Liability)	Book Value			Fair Value			Book Value			Fair Value
Interest and rent receivables	$	24,788		$	23,925		$	25,855		$	24,942
Loans(1)		1,465,182			1,552,687			1,471,520			1,490,758
Debt, net		(4,023,568	)		(4,170,310	)		(4,037,389	)		(3,947,795	)

(1) Excludes mortgage loans related to Ernest since they are recorded at fair value and discussed below.

Equity Interest in Related Party and Related Loans Measured at Fair Value on Recurring Basis

At March 31, 2019, the amounts recorded under the fair value option method were as follows (in thousands):

Asset Type	Fair Value		Original Cost		Asset Type Classification
Mortgage loans	$	115,000	$	115,000	Mortgage loans

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Earnings Per Share/Unit (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Calculation of Earnings Per Share

Medical Properties Trust, Inc.

Our earnings per share were calculated based on the following (amounts in thousands):

	For the Three Months Ended March 31,
	2019			2018
Numerator:
Net income	$	76,291		$	91,043
Non-controlling interests’ share in net income		(469	)		(442	)
Participating securities’ share in earnings		(476	)		(195	)
Net income, less participating securities’ share in earnings	$	75,346		$	90,406
Denominator:
Basic weighted-average common shares		380,551			364,882
Dilutive potential common shares		1,124			461
Dilutive weighted-average common shares		381,675			365,343

MPT Operating Partnership, L.P.

Our earnings per common unit were calculated based on the following (amounts in thousands):

	For the Three Months Ended March 31,
	2019			2018
Numerator:
Net income	$	76,291		$	91,043
Non-controlling interests’ share in net income		(469	)		(442	)
Participating securities’ share in earnings		(476	)		(195	)
Net income, less participating securities’ share in earnings	$	75,346		$	90,406
Denominator:
Basic weighted-average units		380,551			364,882
Dilutive potential units		1,124			461
Diluted weighted-average units		381,675			365,343

XML

Leases (Lessee) (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Summary of Lease Expense

The following is a summary of our lease expense (in thousands):

	Classification	Three Months Ended March 31, 2019
Operating lease cost (1)	(2)	$	2,096
Finance lease cost:
Amortization of right-of-use assets	Real estate depreciation and amortization		13
Interest on lease liabilities	Interest expense		21
Sublease income	Interest and other income		(900	)
Total lease cost		$	1,230

(1) Includes short-term leases.

(2) $1.6 million included in Property-related, with the remainder reflected in General and administrative expenses.

Schedule Of Future Minimum Rental Payments For Leases Sublease Receivable And Net Payments Table Text Block

Fixed minimum payments due over the remaining lease term under non-cancelable leases of more than one year and amounts to be received in the future from non-cancelable subleases over their remaining lease term at March 31, 2019 are as follows (amounts in thousands):

	Operating leases			Finance leases			Amounts to be received from subleases			Net payments
2019 (1)	$	4,598		$	93		$	(2,542	)	$	2,149
2020		6,437			125			(3,456	)		3,106
2021		6,606			126			(3,561	)		3,171
2022		6,750			128			(3,715	)		3,163
2023		6,815			129			(3,719	)		3,225
Thereafter		196,788			5,045			(95,320	)		106,513	(2)
Total undiscounted minimum lease payments	$	227,994		$	5,646		$	(112,313	)	$	121,327
Less: interest		(146,478	)		(3,717	)
Present value of lease liabilities	$	81,516		$	1,929

(1) Represents remaining nine months of 2019.

(2) Reflects certain ground leases, in which we are the lessee, that have longer initial fixed terms than our existing sublease to our tenants. However, we would expect to either renew the related sublease, enter into a lease with a new tenant or early terminate the ground lease to reduce or avoid any significant impact from such ground leases.

Summary of Supplemental Balance Sheet Information

Supplemental balance sheet information is as follows (in thousands, except lease terms and discount rate):

	Classification	March 31, 2019
Right of use assets:
Operating leases - real estate	Land, buildings and improvements, intangible lease assets, and other	$	64,995
Finance leases - real estate	Land, buildings and improvements, intangible lease assets, and other		1,939
Real estate right of use assets, net			66,934
Operating leases - corporate	Other assets		11,419
Total right of use assets, net		$	78,353
Lease liabilities:
Operating leases	Obligations to tenants and other lease liabilities	$	81,516
Financing leases	Obligations to tenants and other lease liabilities		1,929
Total lease liabilities		$	83,445
Weighted average remaining lease term:
Operating leases			32.2
Finance leases			37.7
Weighted average discount rate:
Operating leases			6.3	%
Finance leases			6.6	%

Summary of Supplemental Cash Flow Information

The following is supplemental cash flow information (in thousands):

	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,459
Operating cash flows from finance leases		10
Financing cash flows from finance leases		21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		1,042
Finance leases		—

XML

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Accounting Policies [Abstract]
Right of use asset		$ 84,000
Operating lease liabilities	$ 81,516	$ 84,000

XML

Real Estate and Lending Activities - Assets Acquired (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Business Acquisition [Line Items]
Total assets acquired	$ 6,492
Land [Member]
Business Acquisition [Line Items]
Total assets acquired	169
Building [Member]
Business Acquisition [Line Items]
Total assets acquired	5,327
Intangible Lease Assets - Subject to Amortization [Member]
Business Acquisition [Line Items]
Total assets acquired	$ 996

XML

Real Estate and Lending Activities - Acquisitions - Additional Information (Detail) - Rehabilitation Hospital with Covenant Health System [Member] - Germany [Member] € in Millions	Feb. 08, 2019 EUR (€)	Jun. 30, 2018 EUR (€) Hospital
Business Acquisition [Line Items]
Purchase price of acquisition | €	€ 5.7	€ 23.0
Number of facilities acquired | Hospital		4
MEDIAN [Member]
Business Acquisition [Line Items]
Term of lease	27 years
Lease rent increase percentage	70.00%
Lease rate	1.00%

XML

Real Estate and Lending Activities - Development Activities - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Ernest [Member] | Development Activities [Member]
Business Acquisition [Line Items]
Estimated total development cost	$ 25.5

XML

Real Estate and Lending Activities - Summary of Status Update on Current Development Projects (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Business Acquisition [Line Items]
Commitment	$ 179,688
Costs Incurred as of March 31, 2019	102,239
Circle Health [Member] | Birmingham, England [Member]
Business Acquisition [Line Items]
Commitment	44,241
Costs Incurred as of March 31, 2019	$ 34,705
Estimated Rent Commencement Date	3Q 2019
Circle Health Rehabilitation [Member] | Birmingham, England [Member]
Business Acquisition [Line Items]
Commitment	$ 21,979
Costs Incurred as of March 31, 2019	$ 11,677
Estimated Rent Commencement Date	3Q 2019
Surgery Partners [Member] | Idaho Falls, ID [Member]
Business Acquisition [Line Items]
Commitment	$ 113,468
Costs Incurred as of March 31, 2019	$ 55,857
Estimated Rent Commencement Date	1Q 2020

XML

Real Estate and Lending Activities - Disposals - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended
	Mar. 01, 2018	Mar. 31, 2018
Debt Instrument [Line Items]
Net proceeds from sale of real estate		$ 148,809
Houston, Texas [Member] | Steward Health Care System LLC [Member] | St. Joseph Medical Center [Member]
Debt Instrument [Line Items]
Net proceeds from sale of real estate	$ 148,000
Gain on real estate dispositions	1,500
Gain offset by non-cash charges	$ 1,700

XML

Real Estate and Lending Activities - Leasing Operations (Lessor) - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) Property
Lessor Lease Description [Line Items]
Lease renewal term	5 years
Annual rent escalations	95.00%
Number of properties | Property	5
Carrying value of lease requiring residual value guarantee | $	$ 210
Minimum [Member]
Lessor Lease Description [Line Items]
Term of lease	10 years
Fixed minimum annual escalations	0.50%
Maximum [Member]
Lessor Lease Description [Line Items]
Term of lease	15 years
Fixed minimum annual escalations	3.00%

XML

Real Estate and Lending Activities - Summary of Future Minimum Lease Payments to be Received (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Lessor Lease Description [Line Items]
2019 (nine months only)	$ 2,542	[1]
2020	3,456
2021	3,561
2022	3,715
2023	3,719
Thereafter	95,320
Future minimum lease payments to be received	112,313
Minimum [Member]
Lessor Lease Description [Line Items]
2019 (nine months only)	377,978
2020	504,604
2021	514,620
2022	520,969
2023	529,454
Thereafter	11,187,591
Future minimum lease payments to be received	13,635,216
Operating Leases [Member] | Minimum [Member]
Lessor Lease Description [Line Items]
2019 (nine months only)	329,487
2020	438,596
2021	447,232
2022	452,173
2023	459,222
Thereafter	9,636,734
Future minimum lease payments to be received	11,763,444
Direct Financing Leases [Member] | Minimum [Member]
Lessor Lease Description [Line Items]
2019 (nine months only)	48,491
2020	66,008
2021	67,388
2022	68,796
2023	70,232
Thereafter	1,550,857
Future minimum lease payments to be received	$ 1,871,772

[1] Represents remaining nine months of 2019.

XML

Real Estate and Lending Activities - Direct Financing Leases - Additional Information (Detail) $ in Millions		3 Months Ended
	Mar. 15, 2018 USD ($)	Mar. 31, 2019 Lease
Ernest [Member]
Direct Financing Lease Income [Line Items]
Number of direct financing leases		14
Prime Facilities [Member]
Direct Financing Lease Income [Line Items]
Number of direct financing leases		10
Alecto Healthcare Services [Member]
Direct Financing Lease Income [Line Items]
Number of direct financing leases		2
Vibra Healthcare, LLC [Member] | Acute Care Hospital [Member]
Direct Financing Lease Income [Line Items]
Term of lease	15 years
Existence of option to extend	true
Number of lease extension options		with three extension options of five years each.
Term of lease extension, years	5 years
Write off of unbilled direct finance lease rent | $	$ 1.5

XML

Real Estate and Lending Activities - Components of Net Investment in Direct Financing Leases (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Direct Financing Lease Net Investment In Leases [Abstract]
Minimum lease payments receivable	$ 2,078,099	$ 2,091,504
Estimated residual values	421,893	424,719
Less: Unearned income	(1,815,445)	(1,832,170)
Net investment in direct financing leases	$ 684,547	$ 684,053

XML

Real Estate and Lending Activities - Adeptus Health Transition Properties - Additional Information (Detail) - Adeptus Health Transition Properties [Member]		1 Months Ended	3 Months Ended
	Oct. 01, 2019 Property	Apr. 30, 2019 Property	Mar. 31, 2019 Property Facility
Business Acquisition [Line Items]
Number of facilities transitioned			16
Number of re-leased properties			9
Number of transitioned facilities not re-leased | Facility			6
Percentage of investment in remaining transition facilities on total assets			0.60%
Scenario, Forecast [Member]
Business Acquisition [Line Items]
Number of remaining properties to be transitioned	5
Subsequent Event [Member]
Business Acquisition [Line Items]
Number of properties sold		1

XML

Real Estate and Lending Activities - Gilbert and Florence Facilities - Additional Information (Detail) - Gilbert and Florence Facilities [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Acquisition [Line Items]
Gain offset by non-cash charges		$ 1.1
Total Gross Assets [Member] | Credit Concentration Risk [Member]
Business Acquisition [Line Items]
Percentage of Total Gross Assets	0.20%

XML

Real Estate and Lending Activities - Alecto Facilities - Additional Information (Detail) - Alecto Healthcare Services [Member]	3 Months Ended
	Mar. 31, 2019 Property
Business Acquisition [Line Items]
Number of leased properties	4
Total Gross Assets [Member] | Customer Concentration Risk [Member]
Business Acquisition [Line Items]
Percentage of Total Gross Assets	1.00%

XML

Real Estate and Lending Activities - Summary of Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Loans [Line Items]
Loans, Balance	$ 1,580,182	$ 1,586,520
Mortgage Loans [Member]
Loans [Line Items]
Loans, Balance	1,214,780	1,213,322
Other Loans [Member]
Loans [Line Items]
Loans, Balance	$ 365,402	$ 373,198

XML

Real Estate and Lending Activities - Loans - Additional Information (Detail) € in Millions	Mar. 31, 2019 EUR (€)
Primotop Holdings S.a.r.l. [Member]
Loans [Line Items]
Shareholder loan to joint venture	€ 290

XML

Real Estate and Lending Activities - Concentration of Credit Risks and Related Party Transactions - Additional Information (Detail) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019 USD ($) Investment	Mar. 31, 2018 USD ($)	Dec. 31, 2018
Business Acquisition [Line Items]
Revenue from affiliates of total revenue	$ 180,454	$ 205,046
Total Gross Assets [Member] | Geographic Concentration [Member] | U.S. [Member]
Business Acquisition [Line Items]
Percentage of revenue from affiliates of total revenue	80.00%		80.00%
Total Gross Assets [Member] | Geographic Concentration [Member] | Europe [Member]
Business Acquisition [Line Items]
Percentage of revenue from affiliates of total revenue	20.00%		20.00%
Revenue [Member] | Customer Concentration Risk [Member] | General Acute Care Hospital and Healthcare System [Member]
Business Acquisition [Line Items]
Percentage of revenue from affiliates of total revenue	86.00%	86.00%
Revenue [Member] | Customer Concentration Risk [Member] | Rehabilitation Hospital with Covenant Health System [Member]
Business Acquisition [Line Items]
Percentage of revenue from affiliates of total revenue	10.00%	10.00%
Revenue [Member] | Customer Concentration Risk [Member] | Long-term Acute Care Hospital [Member]
Business Acquisition [Line Items]
Percentage of revenue from affiliates of total revenue	4.00%	4.00%
Revenue [Member] | Credit Concentration Risk [Member] | Steward [Member]
Business Acquisition [Line Items]
Revenue from affiliates of total revenue	$ 86,600	$ 73,200
Revenue [Member] | Credit Concentration Risk [Member] | Prime [Member]
Business Acquisition [Line Items]
Revenue from affiliates of total revenue	$ 32,000	31,800
Revenue [Member] | Credit Concentration Risk [Member] | MEDIAN [Member]
Business Acquisition [Line Items]
Revenue from affiliates of total revenue		$ 29,100
Pro Forma [Member] | Total Gross Assets [Member] | Customer Concentration Risk [Member]
Business Acquisition [Line Items]
Number of investment in property | Investment	0
Maximum percentage of entity's assets invested on single property	4.00%

XML

Debt - Summary of Debt (Detail) - USD ($) $ in Thousands		Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt		$ 4,059,602
Debt issue costs, net		(36,034)	$ (37,370)
Debt, net		4,023,568	4,037,389
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt	[1]	37,802	28,059
Term Loan [Member]
Debt Instrument [Line Items]
Debt		200,000	200,000
4.000% Senior Unsecured Notes due 2022 [Member]
Debt Instrument [Line Items]
Debt	[2]	560,900	573,350
5.500% Senior Unsecured Notes Due 2024 [Member]
Debt Instrument [Line Items]
Debt		300,000	300,000
6.375% Senior Unsecured Notes due 2024 [Member]
Debt Instrument [Line Items]
Debt		500,000	500,000
3.325% Senior Unsecured Notes Due 2025 [Member]
Debt Instrument [Line Items]
Debt	[2]	560,900	573,350
5.250% Senior Unsecured Notes Due 2026 [Member]
Debt Instrument [Line Items]
Debt		500,000	500,000
5.000% Senior Unsecured Notes Due 2027 [Member]
Debt Instrument [Line Items]
Debt		1,400,000	1,400,000
Senior Unsecured Debt [Member]
Debt Instrument [Line Items]
Debt		$ 4,059,602	$ 4,074,759

[1] Includes £29 million and £22 million of GBP-denominated borrowings that reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

[2] These notes are Euro-denominated and reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

XML

Debt - Summary of Debt (Parenthetical) (Detail) $ in Thousands, £ in Millions		Mar. 31, 2019 USD ($)	Mar. 31, 2019 GBP (£)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 GBP (£)
Debt Instrument [Line Items]
Debt		$ 4,059,602
4.000% Senior Unsecured Notes due 2022 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, interest rate		4.00%	4.00%	4.00%	4.00%
Debt	[1]	$ 560,900		$ 573,350
5.500% Senior Unsecured Notes Due 2024 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, interest rate		5.50%	5.50%	5.50%	5.50%
Debt		$ 300,000		$ 300,000
6.375% Senior Unsecured Notes due 2024 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, interest rate		6.375%	6.375%	6.375%	6.375%
Debt		$ 500,000		$ 500,000
3.325% Senior Unsecured Notes Due 2025 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, interest rate		3.325%	3.325%	3.325%	3.325%
Debt	[1]	$ 560,900		$ 573,350
5.250% Senior Unsecured Notes Due 2026 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, interest rate		5.25%	5.25%	5.25%	5.25%
Debt		$ 500,000		$ 500,000
5.000% Senior Unsecured Notes Due 2027 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, interest rate		5.00%	5.00%	5.00%	5.00%
Debt		$ 1,400,000		$ 1,400,000
GBP-denominated Borrowings [Member]
Debt Instrument [Line Items]
Debt | £			£ 29		£ 22

[1] These notes are Euro-denominated and reflect the exchange rate at March 31, 2019 and December 31, 2018, respectively.

XML

Debt - Principal Payments Due for Debt (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Debt Disclosure [Abstract]
2019	$ 0
2020	0
2021	37,802
2022	760,900
2023	0
Thereafter	3,260,900
Total	$ 4,059,602

XML

Debt - Covenants - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Percentage of dividends which could be paid from adjusted operating funds	95.00%
Percentage of dividends which could be paid from operation funds	95.00%
Maximum percentage of total unencumbered assets	150.00%

XML

Common Stock/Partners' Capital - Additional Information (Detail) shares in Thousands, $ in Thousands		3 Months Ended
	May 10, 2019 USD ($) shares	Mar. 31, 2019 USD ($) Employee shares	Mar. 31, 2018 USD ($)
Class Of Stock [Line Items]
Proceeds from sale of common shares / units, net of offering costs | $		$ 354,030	$ (94)
MPT Operating Partnership, L.P. [Member]
Class Of Stock [Line Items]
Number of units sold		20,100
MPT Operating Partnership, L.P. [Member] | Medical Properties Trust, Inc. [Member]
Class Of Stock [Line Items]
Ownership interest in equity		99.90%
Employee [Member]
Class Of Stock [Line Items]
Number of partners shared remaining ownership percentage | Employee		2
Subsequent Event [Member]
Class Of Stock [Line Items]
Proceeds from sale of common shares / units, net of offering costs | $	$ 45,000
Common Units [Member]
Class Of Stock [Line Items]
Number of share sold		20,147
Common Units [Member] | Subsequent Event [Member]
Class Of Stock [Line Items]
Number of share sold	2,500

XML

Stock Awards - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share / (Unit)-based compensation expense	$ 6,715	$ 1,856
Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reserved shares of common stock for awards under the Equity Incentive Plan	8,196,770
Common stock remaining for future stock awards transferred to the equity incentive plan	0

XML

Fair Value of Financial Instruments - Summary of Fair Value Information of Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value Disclosures [Abstract]
Interest and rent receivables, Book value	$ 24,788	$ 25,855
Loans, Book value	1,465,182	1,471,520
Debt, net Book value	(4,023,568)	(4,037,389)
Interest and rent receivables, Fair value	23,925	24,942
Loans, Fair value	1,552,687	1,490,758
Debt, net Fair value	$ (4,170,310)	$ (3,947,795)

XML

Fair Value of Financial Instruments - Equity Interest in Related Party and Related Loans Measured at Fair Value on Recurring Basis (Detail) - Fair Value Measurements, Recurring [Member] - Mortgage Loans [Member] $ in Thousands	Mar. 31, 2019 USD ($)
Financial Instruments Measured At Fair Value On Recurring Basis [Line Items]
Fair Value	$ 115,000
Original Cost	$ 115,000

XML

Earnings Per Share/Unit - Calculation of Earnings Per Share (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 76,291	$ 91,043
Net income attributable to non-controlling interests	(469)	(442)
Participating securities’ share in earnings	(476)	(195)
Net income, less participating securities’ share in earnings	$ 75,346	$ 90,406
Basic weighted-average common shares	380,551	364,882
Dilutive potential common shares	1,124	461
Dilutive weighted-average common shares	381,675	365,343
MPT Operating Partnership, L.P. [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 76,291	$ 91,043
Net income attributable to non-controlling interests	(469)	(442)
Participating securities’ share in earnings	(476)	(195)
Net income, less participating securities’ share in earnings	$ 75,346	$ 90,406
Basic weighted-average common shares	380,551	364,882
Dilutive potential common shares	1,124	461
Dilutive weighted-average common shares	381,675	365,343

XML

Commitments and Contingencies - Additional Information (Detail) $ in Millions	Feb. 04, 2019 USD ($)	Jan. 31, 2019 USD ($) Hospital	Apr. 30, 2019 AUD ($)	Mar. 31, 2019
Maximum [Member]
Commitment And Contingencies [Line Items]
Term of lease				15 years
Minimum [Member]
Commitment And Contingencies [Line Items]
Term of lease				10 years
Healthscope [Member]
Commitment And Contingencies [Line Items]
Number of facilities acquired | Hospital		11
Purchase price of acquisition		$ 859.0
Purchase price of acquisition paid to escrow	$ 36.4
Term of lease		20 years
Healthscope [Member] | Maximum [Member]
Commitment And Contingencies [Line Items]
Ownership interests acquired		100.00%
Subsequent Event [Member] | Healthscope [Member] | Australian Term Loan [Member]
Commitment And Contingencies [Line Items]
Term loan commitment amount			$ 1,200,000,000

XML

Leases (Lessee) - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019
Minimum [Member]
Lessee Lease Description [Line Items]
Lessee, operating and finance leases remaining lease term	5 years 3 months 18 days
Maximum [Member]
Lessee Lease Description [Line Items]
Lessee, operating and finance leases remaining lease term	42 years 6 months

XML

Leases (Lessee) - Summary of Lease Expense (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Lessee Lease Description [Line Items]
Operating lease cost	$ 2,096	[1],[2]
Finance lease cost:
Total lease cost	1,230
Real Estate Depreciation and Amortization [Member]
Finance lease cost:
Amortization of right-of-use assets	13
Interest Expense [Member]
Finance lease cost:
Interest on lease liabilities	21
Interest and Other Income [Member]
Finance lease cost:
Sublease income	$ (900)

[1] $1.6 million included in Property-related, with the remainder reflected in General and administrative expenses.

[2] Includes short-term leases.

XML

Leases (Lessee) - Summary of Lease Expense (Parenthetical) (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Lessee Lease Description [Line Items]
Operating lease cost	$ 2,096	[1],[2]
Property-related [Member]
Lessee Lease Description [Line Items]
Operating lease cost	$ 1,600

[1] $1.6 million included in Property-related, with the remainder reflected in General and administrative expenses.

[2] Includes short-term leases.

XML

Leases (Lessee) - Fixed Minimum Rental Payments Due under Leases with Non-Cancelable Terms (Detail) - USD ($) $ in Thousands		Mar. 31, 2019	Jan. 01, 2019
Leases [Abstract]
Operating leases, 2019	[1]	$ 4,598
Operating leases, 2020		6,437
Operating leases, 2021		6,606
Operating leases, 2022		6,750
Operating leases, 2023		6,815
Operating leases, Thereafter		196,788
Operating leases, Total undiscounted minimum lease payments		227,994
Operating Leases, Less: interest		(146,478)
Operating leases, Present value of lease liabilities		81,516	$ 84,000
Finance leases, 2019	[1]	93
Finance leases, 2020		125
Finance leases, 2021		126
Finance leases, 2022		128
Finance leases, 2023		129
Finance leases, Thereafter		5,045
Finance leases, Total undiscounted minimum lease payments		5,646
Finance leases, Less: interest		(3,717)
Finance leases, Present value of lease liabilities		1,929
Amounts to be received from subleases, 2019	[1]	(2,542)
Amounts to be received from subleases, 2020		(3,456)
Amounts to be received from subleases, 2021		(3,561)
Amounts to be received from subleases, 2022		(3,715)
Amounts to be received from subleases, 2023		(3,719)
Amounts to be received from subleases, Thereafter		(95,320)
Amounts to be received from subleases, Total undiscounted minimum lease payments		(112,313)
Net payments, 2019	[1]	2,149
Net payments, 2020		3,106
Net payments, 2021		3,171
Net payments, 2022		3,163
Net payments, 2023		3,225
Net payments, Thereafter	[2]	106,513
Net payments, Total undiscounted minimum lease payments		$ 121,327

[1] Represents remaining nine months of 2019.

[2] Reflects certain ground leases, in which we are the lessee, that have longer initial fixed terms than our existing sublease to our tenants. However, we would expect to either renew the related sublease, enter into a lease with a new tenant or early terminate the ground lease to reduce or avoid any significant impact from such ground leases.

XML

Leases (Lessee) - Summary of Supplemental Balance Sheet Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Right of use assets:
Real estate right of use assets, net	$ 66,934
Total right of use assets, net	78,353
Lease liabilities:
Operating leases	$ 81,516	$ 84,000
Operating Lease, Liability, Statement of Financial Position [Extensible List]	mpw:ObligationsToTenantsAndOtherLeaseLiabilities
Financing leases	$ 1,929
Finance Lease, Liability, Statement of Financial Position [Extensible List]	mpw:ObligationsToTenantsAndOtherLeaseLiabilities
Total lease liabilities	$ 83,445
Weighted average remaining lease term:
Operating leases	32 years 2 months 12 days
Finance leases	37 years 8 months 12 days
Weighted average discount rate:
Operating leases	6.30%
Finance leases	6.60%
Real Estate [Member]
Right of use assets:
Operating leases	$ 64,995
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	mpw:LandBuildingsAndImprovementsIntangibleLeaseAssetsAndOther
Finance leases	$ 1,939
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	mpw:LandBuildingsAndImprovementsIntangibleLeaseAssetsAndOther
Corporate [Member]
Right of use assets:
Operating leases	$ 11,419
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets

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Leases (Lessee) - Summary of Supplemental Cash Flow Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 1,459
Operating cash flows from finance leases	10
Financing cash flows from finance leases	21
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 1,042

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Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] £ in Millions, $ in Millions	Apr. 12, 2019 USD ($) Hospital	Apr. 11, 2019 Facility	Apr. 03, 2019 GBP (£) Hospital
Acute Care Hospital [Member] | Poole, England [Member]
Subsequent Event [Line Items]
Number of facilities acquired			1
Purchase price of acquisition | £			£ 34.5
Acute Care Hospital [Member] | Poole, England [Member] | BMI Healthcare [Member]
Subsequent Event [Line Items]
Term of lease			14 years
Fixed annual escalators percentage			2.50%
Acute Care Hospital [Member] | Big Spring, Texas [Member] | Steward [Member]
Subsequent Event [Line Items]
Number of facilities acquired	1
Purchase price of acquisition | $	$ 26
Oaks Facility [Member] | Advanced Diagnostics [Member]
Subsequent Event [Line Items]
Number of re-leased properties | Facility		12
Term of lease		10 years
Lease extension options, description		four additional five-year extension options
Existence of option to extend		true
Term of lease extension, years		5 years