13.

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, 2012, and 2013 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, 2012 and 2013 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, 2012, and 2013 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, 2012 and 2013 Senior Unsecured Notes; or (6) the release or discharge of the Subsidiary Guarantor from its guarantee obligations under our revolving credit facility.

Subsequent to December 31, 2012, certain of our subsidiaries were re-designated as non-guarantors of our 2011, 2012 and 2013 Senior Unsecured Notes, as the underlying properties were sold in 2013 (such subsidiaries were guarantors prior to 2013). With these re-designations, we have restated the 2012 and 2011 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 for Subsidiary Guarantors by $997.2 million and also to increase total assets (and, correspondingly increase total liabilities) for Non-Guarantor Subsidiaries by $404.1 million with an offset to Eliminations. In addition, we revised our condensed consolidating statements of cash flows for the years ended December 31, 2012 and 2011 to adjust the classification of cash flows related to intercompany transactions. For the year ended December 31, 2012, these adjustments had the effect of a) increasing net cash provided by investing activities and decreasing net cash provided by financing activities for the Parent and Subsidiary Issuers by $129.4 million and $501.8 million, respectively, and b) decreasing net cash provided by investing activities and increasing net cash provided by financing activities for the Subsidiary Guarantors and the Non-Guarantor Subsidiaries by $365.8 million and $136.1 million, respectively, with an offset to Eliminations. For the year ended December 31, 2011, these adjustments had the effect of a) increasing net cash provided by investing activities and decreasing net cash provided by financing activities for the Subsidiary Issuers and Non-Guarantor Subsidiaries by $92.1 million and $22.4 million, respectively, and b) decreasing net cash provided by investing activities and increasing net cash provided by financing activities for the Parent and Subsidiary Guarantors by $89.6 million and $114.2 million, respectively, with an offset to Eliminations. These revisions are not material to the related financial statements for any prior periods and had no impact on our consolidated balance sheet or consolidated statement of cash flows. As prior period financial information is presented in future filings, we will similarly revise the condensed consolidating statements of cash flows for comparative periods presented in future filings.

Condensed Consolidated Balance Sheets

December 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	$	—	$	—	$	1,795,084		$	70,371		$	—		$	1,865,455
Net investment in direct financing leases		—		—		212,543			218,481			—			431,024
Mortgage loans		—		—		268,650			120,000			—			388,650

Gross investment in real estate assets		—		—		2,276,277			408,852			—			2,685,129
Accumulated depreciation and amortization		—		—		(151,624	)		(8,152	)		—			(159,776	)

Net investment in real estate assets		—		—		2,124,653			400,700			—			2,525,353
Cash and cash equivalents		—		18,815		27,094			70			—			45,979
Interest and rent receivables		—		336		31,324			26,839			—			58,499
Straight-line rent receivables		—		—		37,015			8,814			—			45,829
Other loans		—		178		1,100			159,712			—			160,990
Net intercompany receivable		35,363		1,907,474		—			—			(1,942,837	)		—
Investment in subsidiaries		1,344,598		825,153		42,407			—			(2,212,158	)		—
Other assets		—		37,311		1,168			29,441			—			67,920

Total Assets	$	1,379,961	$	2,789,267	$	2,264,761		$	625,576		$	(4,154,995	)	$	2,904,570

Liabilities and Equity
Liabilities
Debt, net	$	—	$	1,407,733	$	—		$	13,948		$	—		$	1,421,681
Accounts payable and accrued expenses		35,753		36,887		20,367			1,304			—			94,311
Net intercompany payable		—		—		1,538,934			403,903			(1,942,837	)		—
Deferred revenue		—		49		17,772			5,966			—			23,787
Lease deposits and other obligations to tenants		—		—		17,964			2,619			—			20,583

Total liabilities		35,753		1,444,669		1,595,037			427,740			(1,942,837	)		1,560,362

Total Equity		1,344,208		1,344,598		669,724			197,836			(2,212,158	)		1,344,208

Total Liabilities and Equity	$	1,379,961	$	2,789,267	$	2,264,761		$	625,576		$	(4,154,995	)	$	2,904,570

Condensed Consolidated Statements of Income

For the Year Ended December 31, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	124,651		$	20,028		$	(12,101	)	$	132,578
Straight-line rent		—			—			8,438			2,268			—			10,706
Income from direct financing leases		—			—			38,522			22,577			(20,269	)		40,830
Interest and fee income		—			21,797			38,696			29,834			(31,918	)		58,409

Total revenues		—			21,797			210,307			74,707			(64,288	)		242,523
Expenses
Real estate depreciation and amortization		—			—			35,277			1,701			—			36,978
Property-related		—			601			1,356			32,863			(32,370	)		2,450
Acquisition expenses		—			7,356			12,138			—			—			19,494
General and administrative		—			29,033			375			655			—			30,063

Total operating expenses		—			36,990			49,146			35,219			(32,370	)		88,985

Operating income		—			(15,193	)		161,161			39,488			(31,918	)		153,538
Other income (expense)
Interest and other (expense) income		—			(110	)		—			(209	)		—			(319	)
Earnings from equity and other interests		—			—			948			2,606			—			3,554
Interest expense		—			(67,484	)		(1,912	)		(29,268	)		31,918			(66,746	)
Income tax expense		—			—			(158	)		(568	)		—			(726	)

Net other expense		—			(67,594	)		(1,122	)		(27,439	)		31,918			(64,237	)

Income (loss) from continuing operations		—			(82,787	)		160,039			12,049			—			89,301
Income (loss) from discontinued operations		—			—			(4	)		7,918			—			7,914

Equity in earnings of consolidated subsidiaries net of income taxes		97,215			180,002			4,477			—			(281,694	)		—

Net income (loss)		97,215			97,215			164,512			19,967			(281,694	)		97,215
Net income (loss) attributable to non-controlling interests		(224	)		(224	)		—			—			224			(224	)

Net income attributable to MPT common stockholders	$	96,991		$	96,991		$	164,512		$	19,967		$	(281,470	)	$	96,991

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Year Ended December 31, 2013

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	97,215		$	97,215		$	164,512	$	19,967	$	(281,694	)	$	97,215
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate swap		3,474			3,474			—		—		(3,474	)		3,474
Foreign currency translation gain (loss)		67			67			—		—		(67	)		67

Total comprehensive income		100,756			100,756			164,512		19,967		(285,235	)		100,756
Comprehensive income attributable to non-controlling interests		(224	)		(224	)		—		—		224			(224	)

Comprehensive income attributable to MPT common stockholders	$	100,532		$	100,532		$	164,512	$	19,967	($	285,011	)	$	100,532

Condensed Consolidated Statements of Cash Flows

For the Year Ended December 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	$	4		$	(53,846	)	$	196,883		$	(2,240	)	$	—		$	140,801
Investing Activities
Cash paid for acquisitions and other related investments		—			—			(619,092	)		(35,830	)		—			(654,922	)
Net proceeds from sales of real estate		—			—			—			32,409			—			32,409
Principal received on loans receivable		—			—			—			7,249			—			7,249
Investments in loans receivable		—			—			(1,100	)		(2,646	)		—			(3,746	)
Construction in progress and other		—			136			(94,737	)		1,034			—			(93,567	)

Net cash provided by (used in) investing activities		—			136			(714,929	)		2,216			—			(712,577	)

Financing Activities
Additions to term debt		—			424,580			—			—			—			424,580
Payments of term debt		—			(11,000	)		—			(249	)		—			(11,249	)
Revolving credit facilities, net		—			(20,000	)		—			—			—			(20,000	)
Distributions paid		(120,038	)		(120,309	)		—			—			120,038			(120,309	)
Lease deposits and other obligations to tenants		—			—			1,606			1,625			—			3,231
Net payments relating to intercompany financing		(193,297	)		(539,776	)		541,325			(1,545	)		193,293			—
Proceeds from sale of common shares, net of offering costs		313,331			313,331			—			—			(313,331	)		313,331
Debt issuance costs paid and other financing activities		—			(9,760	)		—			—			—			(9,760	)

Net cash provided by (used in) financing activities		(4	)		37,066			542,931			(169	)		—			579,824

Increase (decrease) in cash and cash equivalents for period		—			(16,644	)		24,885			(193	)		—			8,048
Effect of exchange rate changes		—			(24	)		644			—			—			620
Cash and cash equivalents at beginning of period		—			35,483			1,565			263			—			37,311

Cash and cash equivalents at end of period	$	—		$	18,815		$	27,094		$	70		$	—		$	45,979

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	$	1,185,265		$	65,947		$	—		$	1,251,240
Real estate held for sale		—		—		—			25,537			—			25,537
Net investment in direct financing leases		—		—		110,155			204,257			—			314,412
Mortgage loans		—		—		268,650			100,000			—			368,650

Gross investment in real estate assets		—		28		1,564,070			395,741			—			1,959,839
Accumulated depreciation and amortization		—		—		(116,344	)		(6,452	)		—			(122,796	)

Net investment in real estate assets		—		28		1,447,726			389,289			—			1,837,043
Cash and cash equivalents		—		35,483		1,565			263			—			37,311
Interest and rent receivables		—		212		29,150			15,927			—			45,289
Straight-line rent receivables		—		—		28,416			7,444			—			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	$	1,551,045		$	603,510		$	(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		—		—		997,231			404,103			(1,401,334	)		—
Deferred revenue		—		143		19,431			1,035			—			20,609
Lease deposits and other obligations to tenants		—		—		16,357			985			—			17,342

Total liabilities		27,783		1,037,763		1,043,511			421,349			(1,401,334	)		1,129,072

Total Equity		1,049,814		1,050,204		507,534			182,161			(1,739,899	)		1,049,814

Total Liabilities and Equity	$	1,077,597	$	2,087,967	$	1,551,045		$	603,510		$	(3,141,233	)	$	2,178,886

Condensed Consolidated Statements of Income

For the Year Ended December 31, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	112,573	$	16,619		$	(9,309	)	$	119,883
Straight-line rent		—			—			6,429		1,482			—			7,911
Income from direct financing leases		—			—			19,870		18,090			(16,232	)		21,728
Interest and fee income		—			18,341			29,606		25,387			(24,731	)		48,603

Total revenues		—			18,341			168,478		61,578			(50,272	)		198,125
Expenses
Real estate depreciation and amortization		—			—			31,115		1,700			—			32,815
Property-related		—			495			816		25,707			(25,541	)		1,477
Acquisition expenses		—			5,420			—		—			—			5,420
General and administrative		—			26,018			—		2,544			—			28,562

Total operating expenses		—			31,933			31,931		29,951			(25,541	)		68,274

Operating income		—			(13,592	)		136,547		31,627			(24,731	)		129,851
Other income (expense)
Interest and other (expense) income		—			(69	)		—		(1,593	)		—			(1,662	)
Earnings from equity and other interests		—			—			1,061		1,882			—			2,943
Interest expense		—			(58,729	)		1,408		(25,653	)		24,731			(58,243	)
Income tax expense		—			—			—		(19	)		—			(19	)

Net other expense		—			(58,798	)		2,469		(25,383	)		24,731			(56,981	)

Income (loss) from continuing operations		—			(72,390	)		139,016		6,244			—			72,870
Income (loss) from discontinued operations		—			—			103		17,104			—			17,207

Equity in earnings of consolidated subsidiaries net of income taxes		90,077			162,467			4,481		—			(257,025	)		—

Net income (loss)		90,077			90,077			143,600		23,348			(257,025	)		90,077
Net income (loss) attributable to non-controlling interests		(177	)		(177	)		—		—			177			(177	)

Net income attributable to MPT common stockholders	$	89,900		$	89,900		$	143,600	$	23,348		$	(256,848	)	$	89,900

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Year Ended December 31, 2012

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	90,077		$	90,077		$	143,600	$	23,348	$	(257,025	)	$	90,077
Other comprehensive income:
Unrealized loss on interest rate swap		(251	)		(251	)		—		—		251			(251	)

Total comprehensive income		89,826			89,826			143,600		23,348		(256,774	)		89,826
Comprehensive income attributable to non-controlling interests		(177	)		(177	)		—		—		177			(177	)

Comprehensive income attributable to MPT common stockholders	$	89,649		$	89,649		$	143,600	$	23,348	($	256,597	)	$	89,649

Condensed Consolidated Statements of Cash Flows

For the Year Ended December 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	$	57		$	(61,002	)	$	165,454		$	800		$	—		$	105,309

Investing Activities
Cash paid for acquisitions and other related investments		—			—			(420,500	)		(200,990	)		—			(621,490	)
Net proceeds from sales of real estate		—			—			—			71,202			—			71,202
Principal received on loans receivable		—			—			5,491			5,440			—			10,931
Investments in loans receivable		—			—			—			(1,293	)		—			(1,293	)
Construction in progress and other		—			(578	)		(66,467	)		(9,433	)		—			(76,478	)

Net cash provided by (used in) investing activities		—			(578	)		(481,476	)		(135,074	)		—			(617,128	)

Financing Activities
Additions to term debt		—			300,000			—			—			—			300,000
Payments of term debt		—			—			—			(232	)		—			(232	)
Revolving credit facilities, net		—			75,000			(39,600	)		—			—			35,400
Distributions paid		(103,684	)		(103,952	)		—			—			103,684			(103,952	)
Lease deposits and other obligations to tenants		—			—			(10,031	)		(1,405	)		—			(11,436	)
Net payments relating to intercompany financing		(129,421	)		(501,839	)		365,809			136,087			129,364			—
Proceeds from sale of common shares, net of offering costs		233,048			233,048			—			—			(233,048	)		233,048
Debt issuance costs paid and other financing activities		—			(6,424	)		—			—			—			(6,424	)

Net cash provided by (used in) financing activities		(57	)		(4,167	)		316,178			134,450			—			446,404

Increase (decrease) in cash and cash equivalents for period		—			(65,747	)		156			176			—			(65,415	)
Cash and cash equivalents at beginning of period		—			101,230			1,409			87			—			102,726

Cash and cash equivalents at end of period	$	—		$	35,483		$	1,565		$	263		$	—		$	37,311

Condensed Consolidated Statements of Income

For the Year Ended December 31, 2011

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	99,494		$	9,286		$	(3,092	)	$	105,688
Straight-line rent		—			—			3,515			1,762			—			5,277
Interest and fee income		—			6,124			17,543			3,926			(6,236	)		21,357

Total revenues		—			6,124			120,552			14,974			(9,328	)		132,322
Expenses
Real estate depreciation and amortization		—			—			28,489			1,658			—			30,147
Property-related		—			217			458			3,141			(3,092	)		724
Acquisition expenses		—			3,713			—			471			—			4,184
General and administrative		17			23,914			—			3,160			—			27,091

Total operating expenses		17			27,844			28,947			8,430			(3,092	)		62,146

Operating income		(17	)		(21,720	)		91,605			6,544			(6,236	)		70,176
Other income (expense)
Interest and other (expense) income		—			26			2			(10	)		—			18
Earnings from equity and other interests		—			—			345			(267	)		—			78
Debt refinancing costs		—			(14,109	)		(105	)		—			—			(14,214	)
Interest expense		—			(43,063	)		139			(7,122	)		6,236			(43,810	)
Income tax expense		—			—			—			(128	)		—			(128	)

Net other expense		—			(57,146	)		381			(7,527	)		6,236			(58,056	)

Income (loss) from continuing operations		(17	)		(78,866	)		91,986			(983	)		—			12,120
Income (loss) from discontinued operations		—			—			(1,969	)		16,563			—			14,594

Equity in earnings of consolidated subsidiaries net of income taxes		26,731			105,597			4,578			—			(136,906	)		—

Net income		26,714			26,731			94,595			15,580			(136,906	)		26,714
Net income attributable to non-controlling interests		(178	)		(178	)		—			—			178			(178	)

Net income attributable to MPT common stockholders	$	26,536		$	26,553		$	94,595		$	15,580		$	(136,728	)	$	26,536

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Year Ended December 31, 2011

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	26,714		$	26,731		$	94,595	$	15,580	$	(136,906	)	$	26,714
Other comprehensive income:
Unrealized loss on interest rate swap		(8,590	)		(8,590	)		—		—		8,590			(8,590	)

Total comprehensive income		18,124			18,141			94,595		15,580		(128,316	)		18,124
Comprehensive income attributable to non-controlling interests		(178	)		(178	)		—		—		178			(178	)

Comprehensive income attributable to MPT common stockholders	$	17,946		$	17,963		$	94,595	$	15,580	$	(128,138	)	$	17,946

Condensed Consolidated Statements of Cash Flows

For the Year Ended December 31, 2011

(in thousands)


	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	(209	)	$	(48,779	)	$	109,329		$	18,929		$	—		$	79,270
Investing Activities
Cash paid for acquisitions and other related investments		—			—			(241,626	)		(37,337	)		—			(278,963	)
Net proceeds from sales of real estate		—			—			—			41,130			—			41,130
Principal received on loans receivable		—			—			230			4,059			—			4,289
Investments in loans receivable		—			—			(230	)		(631	)		—			(861	)
Construction in progress and other		—			(6,466	)		(24,081	)		(669	)		—			(31,216	)

Net cash provided by (used in) investing activities		—			(6,466	)		(265,707	)		6,552			—			(265,621	)
Financing Activities
Additions to term debt		—			450,000			—			—			—			450,000
Payments of term debt		—			(237,666	)		(8,433	)		(163	)		—			(246,262	)
Revolving credit facilities, net		—			50,000			39,600			—			—			89,600
Distributions paid		(89,342	)		(89,601	)		—			—			89,342			(89,601	)
Lease deposits and other obligations to tenants		—			—			10,986			(2,365	)		—			8,621
Net payments relating to intercompany financing		89,551			(92,052	)		114,247			(22,404	)		(89,342	)		—
Debt issuance costs paid and other financing activities		—			(21,028	)		—			(661	)		—			(21,689	)

Net cash provided by (used in) financing activities		209			59,653			156,400			(25,593	)		—			190,669

Increase (decrease) in cash and cash equivalents for period		—			4,408			22			(112	)		—			4,318
Cash and cash equivalents at beginning of period		—			96,822			1,387			199			—			98,408

Cash and cash equivalents at end of period	$	—		$	101,230		$	1,409		$	87		$	—		$	102,726