12. Condensed Consolidating Financial Information

The following tables present the condensed consolidating financial information for (a) Medical Properties Trust, Inc. (“Parent” and a guarantor to our 2011 and 2012 Senior Unsecured Notes), (b) MPT Operating Partnership, L.P. and MPT Finance Corporation (“Subsidiary Issuers”), (c) on a combined basis, the guarantors of our 2011 and 2012 Senior Unsecured Notes (“Subsidiary Guarantors”), and (d) on a combined basis, the non-guarantor subsidiaries (“Non-Guarantor Subsidiaries”). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantee by each 100% owned Subsidiary Guarantor is joint and several, and we believe separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. Furthermore, there are no significant legal restrictions on the Parent’s ability to obtain funds from its subsidiaries by dividend or loan.

The guarantees by the Subsidiary Guarantors may be released and discharged upon: (1) any sale, exchange or transfer of all of the capital stock of a Subsidiary Guarantor; (2) the merger or consolidation of a Subsidiary Guarantor with a Subsidiary Issuer or any other Subsidiary Guarantor; (3) the proper designation of any Subsidiary Guarantor by the Subsidiary Issuers as “unrestricted” for covenant purposes under the indenture governing the 2011 and 2012 Senior Unsecured Notes; (4) the legal defeasance or covenant defeasance or satisfaction and discharge of the indenture; (5) a liquidation or dissolution of a Subsidiary Guarantor permitted under the indenture governing the 2011 and 2012 Senior Unsecured Notes; or (6) the release or discharge of the Subsidiary Guarantor from its guarantee obligations under our revolving credit facility.

Subsequent to March 31, 2012, certain of our subsidiaries were re-designated as non-guarantors of our 2011 and 2012 Senior Unsecured Notes as the underlying properties were sold in 2012. With these re-designations, we have restated the 2012 consolidating financial information below to reflect these changes.

We have revised our condensed consolidating balance sheets as of March 31, 2013, December 31, 2012 and 2011 to adjust negative net intercompany receivables (payable) balances from Total Assets to Total Liabilities. The impact of this revision, was to increase total assets (and, correspondingly increase total liabilities) as of March 31, 2013, December 31, 2012 and 2011 for Subsidiaries Guarantors by $983.8 million, $1,010.4 and $888.9 million, respectively, and also to increase total assets (and, correspondingly increase total liabilities) for Non-Guarantor Subsidiaries to $391.7 million, $390.9 million and $5.5 million, respectively, with an offset to Eliminations. This revision is not material to the related condensed consolidating financial statements for any prior periods and had no impact on our consolidated balance sheet. As prior period financial information is presented in future filings, we will similarly revise the condensed consolidating balance sheets.

Condensed Consolidated Balance Sheets

March 31, 2013

(in thousands)


	Parent		Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Assets
Real estate assets
Land, buildings and improvements and intangible lease assets	$	—	$	42		$	1,227,925		$	65,946		$	—		$	1,293,913
Mortgage loans		—		—			268,650			100,000			—			368,650
Net investment in direct financing leases		—		—			110,529			205,110			—			315,639

Gross investment in real estate assets		—		42			1,607,104			371,056			—			1,978,202
Accumulated depreciation and amortization		—		—			(128,504	)		(6,876	)		—			(135,380	)

Net investment in real estate assets				42			1,478,600			364,180			—			1,842,822
Cash and cash equivalents		—		73,827			1,566			282			—			75,675
Interest and rent receivables		—		316			29,825			19,697			—			49,838
Straight-line rent receivables		—		—			31,640			6,921			—			38,561
Other loans		—		178			—			157,775			—			157,953
Net intercompany receivable		29,881		1,345,609			—			—			(1,375,490	)		—
Investment in subsidiaries		1,221,960		689,785			42,743			—			(1,954,488	)		—
Other assets		—		29,764			3,033			29,550			—			62,347

Total Assets	$	1,251,841	$	2,139,521		$	1,587,407		$	578,405		$	(3,329,978	)	$	2,227,196

Liabilities and Equity
Liabilities
Debt, net	$	—	$	886,000		$	—		$	14,134		$	—		$	900,134
Accounts payable and accrued expenses		30,270		31,578			3,400			372			—			65,620
Net intercompany payable		—		—			983,802			391,688			(1,375,490	)		—
Deferred revenue		—		(17	)		18,800			601			—			19,384
Lease deposits and other obligations to tenants		—		—			18,979			1,508			—			20,487

Total liabilities		30,270		917,561			41,179			408,303			(1,375,490	)		1,005,625

Total equity		1,221,571		1,221,960			562,426			170,102			(1,954,488	)		1,221,571

Total Liabilities and Equity	$	1,251,841	$	2,139,521		$	1,587,407		$	578,405		$	(3,329,978	)	$	2,227,196

Condensed Consolidated Statements of Income

For the Three Months Ended March 31, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	30,436		$	4,505		$	(2,635	)	$	32,306
Straight-line rent		—			—			2,287			374			—			2,661
Income from direct financing leases		—			—			8,204			5,485			(4,933	)		8,756
Interest and fee income		—			5,057			9,218			7,531			(7,089	)		14,717

Total revenues		—			5,057			50,145			17,895			(14,657	)		58,440
Expenses
Real estate depreciation and amortization		—			—			8,222			425			—			8,647
Property-related		—			172			196			7,616			(7,569	)		415
General and administrative		—			6,744			—			1,074			—			7,818
Acquisition expenses		—			191			—			—			—			191

Total operating expenses		—			7,107			8,418			9,115			(7,569	)		17,071

Operating income		—			(2,050	)		41,727			8,780			(7,088	)		41,369
Other income (expense)
Other income (expense)		—			(22	)		1			(204	)		—			(225	)
Earning from equity and other interests		—			—			—			492			—			492
Interest income (expense)		—			(15,517	)		310			(7,305	)		7,088			(15,424	)

Net other income (expense)		—			(15,539	)		311			(7,017	)		7,088			(15,157	)

Income (loss) from continuing operations		—			(17,589	)		42,038			1,763			—			26,212
Income (loss) from discontinued operations		—			—			(4	)		2			—			(2	)
Equity in earnings of consolidated subsidiaries net of income taxes		26,210			43,799			1,121			—			(71,130	)		—

Net income		26,210			26,210			43,155			1,765			(71,130	)		26,210
Net income (loss) attributable to non-controlling interests		(54	)		(54	)		—			—			54			(54	)

Net income attributable to MPT common stockholders	$	26,156		$	26,156		$	43,155		$	1,765		$	(71,076	)	$	26,156

Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	26,210		$	26,210		$	43,155	$	1,765	$	(71,130	)	$	26,210
Other comprehensive income:
Unrealized gain on interest rate swap		827			827			—		—		(827	)		827

Total comprehensive income		27,037			27,037			43,155		1,765		(71,957	)		27,037
Comprehensive income attributable to non-controlling interests		(54	)		(54	)		—		—		54			(54	)

Comprehensive income attributable to MPT common stockholders	$	26,983		$	26,983		$	43,155	$	1,765	$	(71,903	)	$	26,983

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	213		$	(9,099	)	$	37,282		$	(1,345	)	$	—		$	27,051
Investing Activities
Principal received on loans receivable		—			—			—			2,090			—			2,090
Investments in and advances to subsidiaries		(145,408	)		27,048			(26,789	)		(46	)		145,195			—
Investments in loans receivable		—			—			—			(800	)		—			(800	)
Construction in progress and other		—			331			(13,268	)		(589	)		—			(13,526	)

Net cash provided by (used in) investing activities		(145,408	)		27,379			(40,057	)		655			145,195			(12,236	)
Financing Activities
Revolving credit facilities, net		—			(125,000	)		—			—			—			(125,000	)
Payments of term debt		—			—			—			(64	)		—			(64	)
Distributions paid		(27,719	)		(27,786	)		—			—			27,719			(27,786	)
Proceeds from sale of common shares/units, net of offering costs		172,914			172,914			—			—			(172,914	)		172,914
Lease deposits and other obligations to tenants		—			—			2,776			773			—			3,549
Debt issuance costs paid and other financing activities		—			(64	)		—			—			—			(64	)

Net cash provided by financing activities		145,195			20,064			2,776			709			(145,195	)		23,549

Increase in cash and cash equivalents for period		—			38,344			1			19			—			38,364
Cash and cash equivalents at beginning of period		—			35,483			1,565			263			—			37,311

Cash and cash equivalents at end of period	$	—		$	73,827		$	1,566		$	282		$	—		$	75,675

Condensed Consolidated Balance Sheets

December 31, 2012

(in thousands)


	Parent		Subsidiary Issuers		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Assets
Real estate assets
Land, buildings and improvements and intangible lease assets	$	—	$	28	$	1,214,740		$	65,947		$	—		$	1,280,715
Mortgage loans		—		—		268,650			100,000			—			368,650
Net investment in direct financing leases		—		—		110,155			204,257			—			314,412

Gross investment in real estate assets		—		28		1,593,545			370,204			—			1,963,777
Accumulated depreciation and amortization		—		—		(120,282	)		(6,452	)		—			(126,734	)

Net investment in real estate assets		—		28		1,473,263			363,752			—			1,837,043
Cash and cash equivalents		—		35,483		1,565			263			—			37,311
Interest and rent receivables		—		212		29,315			15,762			—			45,289
Straight-line rent receivables		—		—		29,314			6,546			—			35,860
Other loans		—		177		—			159,066			—			159,243
Net intercompany receivable		27,393		1,373,941		—			—			(1,401,334	)		—
Investment in subsidiaries		1,050,204		647,029		42,666			—			(1,739,899	)		—
Other assets		—		31,097		1,522			31,521			—			64,140

Total Assets	$	1,077,597	$	2,087,967	$	1,577,645		$	576,910		$	(3,141,233	)	$	2,178,886

Liabilities and Equity
Liabilities
Debt, net	$	—	$	1,010,962	$	—		$	14,198		$	—		$	1,025,160
Accounts payable and accrued expenses		27,783		26,658		10,492			1,028			—			65,961
Net intercompany payable		—		—		1,010,400			390,934			(1,401,334	)		—
Deferred revenue		—		143		19,643			823			—			20,609
Lease deposits and other obligations to tenants		—		—		16,607			735			—			17,342

Total liabilities		27,783		1,037,763		46,742			16,784			1,401,334			1,129,072

Total Equity		1,049,814		1,050,204		520,503			169,192			(1,739,899	)		1,049,814

Total Liabilities and Equity	$	1,077,597	$	2,087,967	$	567,245		$	576,910		$	3,141,233		$	2,178,886

Condensed Consolidated Statements of Income

For the Three Months Ended March 31, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	28,480		$	4,132		$	(2,460	)	$	30,152
Straight-line rent		—			—			990			369			—			1,359
Income from direct financing leases		—			—			1,653			1,835			(1,653	)		1,835
Interest and fee income		—			2,944			5,194			3,406			(3,623	)		7,921

Total revenues		—			2,944			36,317			9,742			(7,736	)		41,267
Expenses
Real estate depreciation and amortization		—			—			7,868			425			—			8,293
Property-related		—			131			98			4,112			(4,114	)		227
General and administrative		—			6,962			—			630			—			7,592
Acquisition expenses		—			3,425			—			—			—			3,425

Total operating expenses		—			10,518			7,966			5,167			(4,114	)		19,537

Operating income (expense)		—			(7,574	)		28,351			4,575			(3,622	)		21,730
Other income (expense)
Other income (expense)		—			(14	)		—			(1	)		—			(15	)
Interest income (expense)		—			(12,788	)		224			(3,854	)		3,622			(12,796	)

Net other income (expense)		—			(12,802	)		224			(3,855	)		3,622			(12,811	)

Income (loss) from continuing operations		—			(20,376	)		28,575			720			—			8,919
Income (loss) from discontinued operations		—			—			(115	)		1,802			—			1,687
Equity in earnings of consolidated subsidiaries net of income taxes		10,606			30,982			1,121			—			(42,709	)		—

Net income		10,606			10,606			29,581			2,522			(42,709	)		10,606
Net income attributable to non-controlling interests		(42	)		(42	)		—			—			42			(42	)

Net income attributable to MPT common stockholders	$	10,564		$	10,564		$	29,581		$	2,522		$	(42,667	)	$	10,564

Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	10,606		$	10,606		$	29,581	$	2,522	$	(42,709	)	$	10,606
Other comprehensive income:
Unrealized gain on interest rate swap		499			499			—		—		(499	)		499

Total comprehensive income		11,105			11,105			29,581		2,522		(43,208	)		11,105
Comprehensive income attributable to non-controlling interests		(42	)		(42	)		—		—		42			(42	)

Comprehensive income attributable to MPT common stockholders	$	11,063		$	11,063		$	29,581	$	2,522	$	(43,166	)	$	11,063

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	395		$	(11,062	)	$	33,049		$	970		$	—		$	23,352
Investing Activities
Cash paid for acquisition and other related investments		—			—			(200,000	)		(196,500	)		—			(396,500	)
Principal received on loans receivable		—			—			—			1,184			—			1,184
Investments in and advances to subsidiaries		(198,243	)		(406,447	)		213,489			193,353			197,848			—
Construction in progress and other		—			(490	)		(6,590	)		987			—			(6,093	)

Net cash provided by (used in) investing activities		(198,243	)		(406,937	)		6,899			(976	)		197,848			(401,409	)
Financing Activities
Revolving credit facilities, net		—			(50,000	)		(39,600	)		—			—			(89,600	)
Additions to term debt		—			300,000			—			—			—			300,000
Payments of term debt		—			—			—			(58	)		—			(58	)
Distributions paid		(22,345	)		(22,412	)		—			—			22,345			(22,412	)
Proceeds from sale of common shares/units, net of offering costs		220,193			220,193			—			—			(220,193	)		220,193
Lease deposits and other obligations to tenants		—			—			(193	)		83			—			(110	)
Debt issuance costs paid and other financing activities		—			(6,162	)		—			(20	)		—			(6,182	)

Net cash provided by financing activities		197,848			441,619			(39,793	)		5			(197,848	)		401,831

Increase in cash and cash equivalents for period		—			23,620			155			(1	)		—			23,774
Cash and cash equivalents at beginning of period		—			101,230			1,409			87			—			102,726

Cash and cash equivalents at end of period	$	—		$	124,850		$	1,564		$	86		$	—		$	126,500