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 Issuer”), (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 June 30, 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 and the first half of 2013. With these re-designations, we have restated the 2012 condensed consolidating financial information below to reflect these changes.

In the second quarter of 2013, we revised our condensed consolidating balance sheets as of 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 December 31, 2012 and 2011 for Subsidiaries Guarantors by $1,010.4 million and $888.9 million, respectively, and also to increase total assets (and, correspondingly increase total liabilities) for Non-Guarantor Subsidiaries by $390.9 million and $5.5 million respectively, with an offset to Eliminations. This revision is not material to the related 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 Sheet

June 30, 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	$	—	$	—		$	1,229,282		$	65,947		$	—		$	1,295,229
Mortgage loans		—		—			268,650			100,000			—			368,650
Net investment in direct financing leases		—		—			185,913			205,991			—			391,904

Gross investment in real estate assets		—		—			1,683,845			371,938			—			2,055,783
Accumulated depreciation and amortization		—		—			(134,575	)		(7,302	)		—			(141,877	)

Net investment in real estate assets		—		—			1,549,270			364,636			—			1,913,906
Cash and cash equivalents		—		25,923			—			149			—			26,072
Interest and rent receivable		—		700			29,376			24,155			—			54,231
Straight-line rent receivable		—		—			33,821			7,526			—			41,347
Other loans		—		178			—			157,073			—			157,251
Net intercompany receivable		29,654		1,371,376			—			—			(1,401,030	)		—
Investment in subsidiaries		1,223,231		736,536			43,649			—			(2,003,416	)		—
Other assets		—		29,517			2,176			29,976			—			61,669

Total Assets	$	1,252,885	$	2,164,230		$	1,658,292		$	583,515		$	(3,404,446	)	$	2,254,476

Liabilities and Equity
Liabilities
Debt, net	$	—	$	915,000		$	—		$	14,074		$	—		$	929,074
Accounts payable and accrued expenses		30,045		26,026			1,814			809			—			58,694
Net intercompany payable		—		—			1,022,643			378,387			(1,401,030	)		—
Deferred revenue		—		(27	)		19,410			6,030			—			25,413
Lease deposits and other obligations to tenants		—		—			16,677			1,778			—			18,455

Total liabilities		30,045		940,999			1,060,544			401,078			(1,401,030	)		1,031,636
Total equity		1,222,840		1,223,231			597,748			182,437			(2,003,416	)		1,222,840

Total Liabilities and Equity	$	1,252,885	$	2,164,230		$	1,658,292		$	583,515		$	(3,404,446	)	$	2,254,476

Condensed Consolidated Statements of Income

For the Three Months Ended June 30, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	29,411		$	5,063		$	(3,115	)	$	31,359
Straight-line rent		—			—			2,141			605			—			2,746
Income from direct financing leases		—			—			8,664			5,509			(4,943	)		9,230
Interest and fee income		—			5,052			9,186			6,985			(7,085	)		14,138

Total revenues		—			5,052			49,402			18,162			(15,143	)		57,473
Expenses
Real estate depreciation and amortization		—			—			8,293			425			—			8,718
Property-related		—			104			347			8,255			(8,057	)		649
General and administrative		—			7,674			—			(449	)		—			7,225
Acquisition expenses		—			2,088			—			—			—			2,088

Total operating expenses		—			9,866			8,640			8,231			(8,057	)		18,680

Operating income (expense)		—			(4,814	)		40,762			9,931			(7,086	)		38,793
Other income (expense)
Other income (expense)		—			(20	)		(1	)		(2	)		—			(23	)
Earnings from equity and other interests		—			—			233			943			—			1,176
Interest income (expense)		—			(14,726	)		319			(7,320	)		7,086			(14,641	)

Net other income (expense)		—			(14,746	)		551			(6,379	)		7,086			(13,488	)

Income (loss) from continuing operations		—			(19,560	)		41,313			3,552			—			25,305
Income from discontinued operations		—			—			—			2,100			—			2,100
Equity in earnings of consolidated subsidiaries, net of income taxes		27,405			46,965			1,121			—			(75,491	)		—

Net income		27,405			27,405			42,434			5,652			(75,491	)		27,405
Net income (loss) attributable to non-controlling interests		(57	)		(57	)		—			—			57			(57	)

Net income attributable to MPT common stockholders	$	27,348		$	27,348		$	42,434		$	5,652		$	(75,434	)	$	27,348

Condensed Consolidated Statements of Income

For the Six Months Ended June 30, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	59,379		$	9,567		$	(5,750	)	$	63,196
Straight-line rent		—			—			4,428			979			—			5,407
Income from direct financing leases		—			—			16,868			10,994			(9,876	)		17,986
Interest and fee income		—			10,108			18,404			14,517			(14,174	)		28,855

Total revenues		—			10,108			99,079			36,057			(29,800	)		115,444
Expenses
Real estate depreciation and amortization		—			—			16,412			850			—			17,262
Property-related		—			276			541			15,871			(15,626	)		1,062
General and administrative		—			14,419			—			625			—			15,044
Acquisition expenses		—			2,278			—			—			—			2,278

Total operating expenses		—			16,973			16,953			17,346			(15,626	)		35,646

Operating income (expense)		—			(6,865	)		82,126			18,711			(14,174	)		79,798
Other income (expense)
Other income (expense)		—			(42	)		—			(206	)		—			(248	)
Earnings from equity and other interests		—			—			233			1,435			—			1,668
Interest income (expense)		—			(30,243	)		629			(14,625	)		14,174			(30,065	)

Net other income (expense)		—			(30,285	)		862			(13,396	)		14,174			(28,645	)

Income (loss) from continuing operations		—			(37,150	)		82,988			5,315			—			51,153
Income from discontinued operations		—			—			(4	)		2,465			—			2,461
Equity in earnings of consolidated subsidiaries net of income taxes		53,614			90,764			2,242			—			(146,620	)		—

Net income		53,614			53,614			85,226			7,780			(146,620	)		53,614
Net income (loss) attributable to non-controlling interests		(110	)		(110	)		—			—			110			(110	)

Net income attributable to MPT common stockholders	$	53,504		$	53,504		$	85,226		$	7,780		$	(146,510	)	$	53,504

Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended June 30, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	27,405		$	27,405		$	42,434	$	5,652	$	(75,491	)	$	27,405
Other comprehensive income:
Unrealized gain on interest rate swap		1,779			1,779			—		—		(1,779	)		1,779

Total comprehensive income		29,184			29,184			42,434		5,652		(77,270	)		29,184
Comprehensive income attributable to non-controlling interests		(57	)		(57	)		—		—		57			(57	)

Comprehensive income attributable to MPT common stockholders	$	29,127		$	29,127		$	42,434	$	5,652	$	(77,213	)	$	29,127

Condensed Consolidated Statements of Comprehensive Income

For the Six Months Ended June 30, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	53,614		$	53,614		$	85,226	$	7,780	$	(146,620	)	$	53,614
Other comprehensive income:
Unrealized gain on interest rate swap		2,606			2,606			—		—		(2,606	)		2,606

Total comprehensive income		56,220			56,220			85,226		7,780		(149,226	)		56,220
Comprehensive income attributable to non-controlling interests		(110	)		(110	)		—		—		110			(110	)

Comprehensive income attributable to MPT common stockholders	$	56,110		$	56,110		$	85,226	$	7,780	$	(149,116	)	$	56,110

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	(35	)	$	(29,249	)	$	83,956		$	1,573		$	—		$	56,245
Investing Activities
Cash paid for acquisitions and other related investments		—			—			(75,000	)		—			—			(75,000	)
Principal received on loans receivable		—			—			—			3,293			—			3,293
Net proceeds from sale of real estate		—			—			—			18,409			—			18,409
Investments in and advances to subsidiaries		(115,106	)		1,417			22,149			(23,601	)		115,141			—
Investments in loans receivable		—			—			—			(1,300	)		—			(1,300	)
Construction in progress and other		—			(621	)		(33,144	)		594			—			(33,171	)

Net cash provided by (used in) investing activities		(115,106	)		796			(85,995	)		(2,605	)		115,141			(87,769	)
Financing Activities
Revolving credit facilities, net		—			(85,000	)		—			—			—			(85,000	)
Payments of term debt		—			(11,000	)		—			(124	)		—			(11,124	)
Distributions paid		(57,712	)		(57,846	)		—			—			57,712			(57,846	)
Proceeds from sale of common shares/units, net of offering costs		172,853			172,853			—			—			(172,853	)		172,853
Lease deposits and other obligations to tenants		—			—			474			1,042			—			1,516
Debt issuance costs paid and other financing activities		—			(114	)		—			—			—			(114	)

Net cash provided by financing activities		115,141			18,893			474			918			(115,141	)		20,285

Increase (decrease) in cash and cash equivalents for period		—			(9,560	)		(1,565	)		(114	)		—			(11,239	)
Cash and cash equivalents at beginning of period		—			35,483			1,565			263			—			37,311

Cash and cash equivalents at end of period	$	—		$	25,923		$	—		$	149		$	—		$	26,072

Condensed Consolidated Balance Sheet

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	$	1,196,124		$	65,947		$	—		$	1,262,099
Real estate held for sale		—		—		—			16,497			—			16,497
Mortgage loans		—		—		268,650			100,000			—			368,650
Investment in direct financing leases		—		—		110,155			204,257			—			314,412

Gross investment in real estate assets		—		28		1,574,929			386,701			—			1,961,658
Accumulated depreciation and amortization		—		—		(118,163	)		(6,452	)		—			(124,615	)

Net investment in real estate assets		—		28		1,456,766			380,249			—			1,837,043
Cash and cash equivalents		—		35,483		1,565			263			—			37,311
Interest and rent receivable		—		212		29,159			15,918			—			45,289
Straight-line rent receivable		—		—		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	$	1,560,992		$	593,563		$	(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		—		—		1,000,117			401,217			(1,401,334	)		—
Deferred revenue		—		143		19,621			845			—			20,609
Lease deposits and other obligations to tenants		—		—		16,606			736			—			17,342

Total liabilities		27,783		1,037,763		1,046,836			418,024			(1,401,334	)		1,129,072
Total equity		1,049,814		1,050,204		514,156			175,539			(1,739,899	)		1,049,814

Total Liabilities and Equity	$	1,077,597	$	2,087,967	$	1,560,992		$	593,563		$	(3,141,233	)	$	2,178,886

Condensed Consolidated Statements of Income

For the Three Months Ended June 30, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	28,674		$	4,153		$	(2,131	)	$	30,696
Straight-line rent		—			—			949			375			—			1,324
Income from direct financing leases		—			—			4,839			5,371			(4,839	)		5,371
Interest and fee income		—			5,034			6,509			7,007			(7,023	)		11,527

Total revenues		—			5,034			40,971			16,906			(13,993	)		48,918
Expenses
Real estate depreciation and amortization		—			—			7,912			425			—			8,337
Property-related		—			130			368			7,058			(6,970	)		586
General and administrative		—			6,773			—			(76	)		—			6,697
Acquisition expenses		—			279			—			—			—			279

Total operating expenses		—			7,182			8,280			7,407			(6,970	)		15,899

Operating income (loss)		—			(2,148	)		32,691			9,499			(7,023	)		33,019
Other income (expense)
Other income (expense)		—			(16	)		—			(1	)		—			(17	)
Earnings from equity and other interests		—			—			453			426			—			879
Interest income (expense)		—			(14,913	)		253			(7,252	)		7,023			(14,889	)

Net other income (expense)		—			(14,929	)		706			(6,827	)		7,023			(14,027	)

Income (loss) from continuing operations		—			(17,077	)		33,397			2,672			—			18,992
Income (loss) from discontinued operations		—			—			(92	)		460			—			368
Equity in earnings of consolidated subsidiaries, net of income taxes		19,360			36,437			1,117			—			(56,914	)		—

Net income		19,360			19,360			34,422			3,132			(56,914	)		19,360
Net income (loss) attributable to non-controlling interests		(44	)		(44	)		—			—			44			(44	)

Net income attributable to MPT common stockholders	$	19,316		$	19,316		$	34,422		$	3,132		$	(56,870	)	$	19,316

Condensed Consolidated Statements of Income

For the Six Months Ended June 30, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	56,690		$	8,284		$	(4,591	)	$	60,383
Straight-line rent		—			—			1,939			744			—			2,683
Income from direct financing leases		—			—			6,492			7,206			(6,492	)		7,206
Interest and fee income		—			7,978			11,703			10,414			(10,646	)		19,449

Total revenues		—			7,978			76,824			26,648			(21,729	)		89,721
Expenses
Real estate depreciation and amortization		—			—			15,668			850			—			16,518
Property-related		—			261			464			11,171			(11,083	)		813
General and administrative		—			13,736			—			553			—			14,289
Acquisition expenses		—			3,704			—			—			—			3,704

Total operating expenses		—			17,701			16,132			12,574			(11,083	)		35,324

Operating income (loss)		—			(9,723	)		60,692			14,074			(10,646	)		54,397
Other income (expense)
Other income (expense)		—			(28	)		—			(4	)		—			(32	)
Earnings from equity and other interests		—			—			452			427			—			879
Interest income (expense)		—			(27,702	)		479			(11,107	)		10,646			(27,684	)

Net other income (expense)		—			(27,730	)		931			(10,684	)		10,646			(26,837	)

Income (loss) from continuing operations		—			(37,453	)		61,623			3,390			—			27,560
Income (loss) from discontinued operations		—			—			(208	)		2,615			—			2,407
Equity in earnings of consolidated subsidiaries net of income taxes		29,967			67,420			2,238			—			(99,625	)		—

Net income		29,967			29,967			63,653			6,005			(99,625	)		29,967
Net income (loss) attributable to non-controlling interests		(87	)		(87	)		—			—			87			(87	)

Net income attributable to MPT common stockholders	$	29,880		$	29,880		$	63,653		$	6,005		$	(99,538	)	$	29,880

Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended June 30, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	19,360		$	19,360		$	34,422	$	3,132	$	(56,914	)	$	19,360
Other comprehensive income (loss):
Unrealized loss on interest rate swap		(1,045	)		(1,045	)		—		—		1,045			(1,045	)

Total comprehensive income		18,315			18,315			34,422		3,132		(55,869	)		18,315
Comprehensive income attributable to non-controlling interests		(44	)		(44	)		—		—		44			(44	)

Comprehensive income attributable to MPT common stockholders	$	18,271		$	18,271		$	34,422	$	3,132	$	(55,825	)	$	18,271

Condensed Consolidated Statements of Comprehensive Income

For the Six Months Ended June 30, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	29,967		$	29,967		$	63,653	$	6,005	$	(99,625	)	$	29,967
Other comprehensive income (loss):
Unrealized loss on interest rate swap		(546	)		(546	)		—		—		546			(546	)

Total comprehensive income		29,421			29,421			63,653		6,005		(99,079	)		29,421
Comprehensive income attributable to non-controlling interests		(87	)		(87	)		—		—		87			(87	)

Comprehensive income attributable to MPT common stockholders	$	29,334		$	29,334		$	63,653	$	6,005	$	(98,992	)	$	29,334

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	—		$	(30,512	)	$	71,218		$	3,717		$	—		$	44,423
Investing Activities
Cash paid for acquisitions and other related investments		—			—			(200,000	)		(196,500	)		—			(396,500	)
Principal received on loans receivable		—			—			5,491			2,475			—			7,966
Net proceeds from sale of real estate		—			—			—			16,000			—			16,000
Investments in and advances to subsidiaries		(170,705	)		(359,319	)		183,197			176,122			170,705			—
Investments in loans receivable		—			—			—			(1,293	)		—			(1,293	)
Construction in progress and other		—			(47	)		(19,970	)		(638	)		—			(20,655	)

Net cash used in investing activities		(170,705	)		(359,366	)		(31,282	)		(3,834	)		170,705			(394,482	)
Financing Activities
Revolving credit facilities, net		—			(50,000	)		(39,600	)		—			—			(89,600	)
Additions to term debt		—			300,000			—			—			—			300,000
Payments of term debt		—			—			—			(114	)		—			(114	)
Distributions paid		(49,455	)		(49,589	)		—			—			49,455			(49,589	)
Proceeds from sale of common stock/units, net of offering costs		220,160			220,160			—			—			(220,160	)		220,160
Lease deposits and other obligations to tenants		—			—			(180	)		563			—			383
Debt issuance costs paid and other financing activities		—			(6,268	)		—			—			—			(6,268	)

Net cash provided by (used in) financing activities		170,705			414,303			(39,780	)		449			(170,705	)		374,972

Increase in cash and cash equivalents for period		—			24,425			156			332			—			24,913
Cash and cash equivalents at beginning of period		—			101,230			1,409			87			—			102,726

Cash and cash equivalents at end of period	$	—		$	125,655		$	1,565		$	419		$	—		$	127,639