Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

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, 2012, 2013 and 2014 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, 2012, 2013 and 2014 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, 2013 and 2014 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, 2013 and 2014 Senior Unsecured Notes; or (6) the release or discharge of the Subsidiary Guarantor from its guarantee obligations under our revolving credit facility.

Subsequent to September 30, 2013, certain of our subsidiaries were re-designated as non-guarantors of our 2011, 2012, 2013 and 2014 Senior Unsecured Notes as the underlying properties were sold in 2013 or related mortgage loans paid off in 2014. In addition, certain of our subsidiaries previously classified as non-guarantors are guarantors as of September 30, 2014. With these re-designations, we have restated the 2013 consolidating financial information below to reflect these changes.

Condensed Consolidated Balance Sheet

September 30, 2014

(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	$	—	$	—		$	1,995,236		$	65,947		$	—		$	2,061,183
Mortgage loans		—		—			285,093			100,000			—			385,093
Net investment in direct financing leases		—		—			214,709			221,677			—			436,386
Gross investment in real estate assets		—		—			2,495,038			387,624			—			2,882,662
Accumulated depreciation and amortization		—		—			(181,739	)		(9,543	)		—			(191,282	)
Net investment in real estate assets		—		—			2,313,299			378,081			—			2,691,380
Cash and cash equivalents		—		108,105			23,786			921			—			132,812
Interest and rent receivables		—		791			19,198			30,251			—			50,240
Straight-line rent receivables		—		—			44,633			11,770			—			56,403
Other loans		—		—			1,100			146,318			—			147,418
Net intercompany receivable		35,839		1,968,462			—			—			(2,004,301	)		—
Investment in subsidiaries		1,407,495		930,769			41,772			—			(2,380,036	)		—
Other assets		—		44,516			744			45,627			—			90,887
Total Assets	$	1,443,334	$	3,052,643		$	2,444,532		$	612,968		$	(4,384,337	)	$	3,169,140
Liabilities and Equity
Liabilities
Debt, net	$	—	$	1,605,230		$	—		$	13,751		$	—		$	1,618,981
Accounts payable and accrued expenses		36,229		40,235			8,265			697			—			85,426
Net intercompany payable		—		—			1,593,090			411,212			(2,004,302	)		—
Deferred revenue		—		214			24,432			6,184			—			30,830
Lease deposits and other obligations to tenants		—		(531	)		23,097			4,231			—			26,797
Total liabilities		36,229		1,645,148			1,648,884			436,075			(2,004,302	)		1,762,034
Total equity		1,407,105		1,407,495			795,648			176,893			(2,380,035	)		1,407,106
Total Liabilities and Equity	$	1,443,334	$	3,052,643		$	2,444,532		$	612,968		$	(4,384,337	)	$	3,169,140

Condensed Consolidated Statements of Income

For the Three Months Ended September 30, 2014

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	69		$	45,703		$	6,424		$	(4,133	)	$	48,063
Straight-line rent		—			—			3,850			1,432			—			5,282
Income from direct financing leases		—			—			11,695			5,921			(5,308	)		12,308
Interest and fee income		—			9,323			14,336			7,338			(15,873	)		15,124
Total revenues		—			9,392			75,584			21,115			(25,314	)		80,777
Expenses
Real estate depreciation and amortization		—			—			12,814			540			—			13,354
Impairment charges		—			—			—			—			—			—
Property-related		—			169			732			9,171			(9,372	)		700
General and administrative		—			5,448			303			2,921			—			8,672
Acquisition expenses		—			469			1,929			2,488			—			4,886
Total operating expenses		—			6,086			15,778			15,120			(9,372	)		27,612
Operating income (expense)		—			3,306			59,806			5,995			(15,942	)		53,165
Other income (expense)
Other income (expense)		—			75			—			—			—			75
Earnings from equity and other interests		—			—			—			1,153			—			1,153
Interest income (expense)		—			(25,400	)		(8,304	)		(7,719	)		15,942			(25,481	)
Debt refinancing costs		—			—			—			—			—			—
Income tax benefit expense		—			—			(49	)		(200	)		—			(249	)
Net other income (expense)		—			(25,325	)		(8,353	)		(6,766	)		15,942			(24,502	)
Income (loss) from continuing operations		—			(22,019	)		51,453			(771	)		—			28,663
Income (loss) from discontinued operations		—			—			—			—			—			—
Equity in earnings of consolidated subsidiaries net of income taxes		28,663			50,682			995			—			(80,340	)		—
Net income		28,663			28,663			52,448			(771	)		(80,340	)		28,663
Net income (loss) attributable to non-controlling interests		(126	)		(126	)		—			—			126			(126	)
Net income attributable to MPT common stockholders	$	28,537		$	28,537		$	52,448		$	(771	)	$	(80,214	)	$	28,537

Condensed Consolidated Statements of Income

For the Nine Months Ended September 30, 2014

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	69		$	129,167		$	19,431		$	(11,715	)	$	136,952
Straight-line rent		—			—			7,881			2,767			—			10,648
Income from direct financing leases		—			—			34,956			17,691			(15,860	)		36,787
Interest and fee income		—			27,815			43,199			22,631			(47,606	)		46,039
Total revenues		—			27,884			215,203			62,520			(75,181	)		230,426
Expenses
Real estate depreciation and amortization		—			—			37,556			1,929			—			39,485
Impairment charges		—			289			19,002			30,837			—			50,128
Property-related		—			508			926			27,474			(27,507	)		1,401
General and administrative		—			22,096			560			3,180			—			25,836
Acquisition expenses		—			3,355			2,091			2,487			—			7,933
Total operating expenses		—			26,248			60,135			65,907			(27,507	)		124,783
Operating income (expense)		—			1,636			155,068			(3,387	)		(47,674	)		105,643
Other income (expense)
Other income (expense)		—			44			—			—			—			44
Earnings from equity and other interests		—			—			—			2,059			—			2,059
Interest income (expense)		—			(71,944	)		(24,836	)		(22,349	)		47,674			(71,455	)
Debt refinancing costs		—			(290	)		—			—			—			(290	)
Income tax benefit (expense)		—			—			(16	)		(216	)		—			(232	)
Net other income (expense)		—			(72,190	)		(24,852	)		(20,506	)		47,674			(69,874	)
Income (loss) from continuing operations		—			(70,554	)		130,216			(23,893	)		—			35,769
Income from discontinued operations		—			—			—			(2	)		—			(2	)
Equity in earnings of consolidated subsidiaries, net of income taxes		35,767			106,321			3,158			—			(145,246	)		—
Net income		35,767			35,767			133,374			(23,895	)		(145,246	)		35,767
Net income (loss) attributable to non-controlling interests		(192	)		(192	)		—			—			192			(192	)
Net income attributable to MPT common stockholders	$	35,575		$	35,575		$	133,374		$	(23,895	)	$	(145,054	)	$	35,575

Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended September 30, 2014

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income (loss)	$	28,663		$	28,663		$	52,448	$	(771	)	$	(80,340	)	$	28,663
Other comprehensive income (loss):
Unrealized gain on interest rate swap		1,136			1,136			—		—			(1,136	)		1,136
Foreign currency translation gain (loss)		(1,319	)		(1,319	)		—		—			1,319			(1,319	)
Total comprehensive income		28,480			28,480			52,448		(771	)		(80,157	)		28,480
Comprehensive income attributable to non-controlling interests		(126	)		(126	)		—		—			126			(126	)
Comprehensive income attributable to MPT common stockholders	$	28,354		$	28,354		$	52,448	$	(771	)	$	(80,031	)	$	28,354

Condensed Consolidated Statements of Comprehensive Income

For the Nine Months Ended September 30, 2014

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income (loss)	$	35,767		$	35,767		$	133,374	$	(23,895	)	$	(145,246	)	$	35,767
Other comprehensive income (loss):
Unrealized gain on interest rate swap		2,342			2,342			—		—			(2,342	)		2,342
Foreign currency translation gain (loss)		(1,273	)		(1,273	)		—		—			1,273			(1,273	)
Total comprehensive income		36,836			36,836			133,374		(23,895	)		(146,315	)		36,836
Comprehensive income attributable to non-controlling interests		(192	)		(192	)		—		—			192			(192	)
Comprehensive income attributable to MPT common stockholders	$	36,644		$	36,644		$	133,374	$	(23,895	)	$	(146,123	)	$	36,644

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2014

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	(98	)	$	(76,425	)	$	221,310		$	(49,043	)	$	—		$	95,744
Investing Activities
Cash paid for acquisitions and other related investments		—			—			(182,982	)		—			—			(182,982	)
Principal received on loans receivable		—			—			—			8,381			—			8,381
Net proceeds from sale of real estate		—			—			—			34,649			—			34,649
Investments in loans receivable		—			—			—			(9,102	)		—			(9,102	)
Construction in progress and other		—			(1,030	)		(95,489	)		(483	)		—			(97,002	)
Net cash provided by (used in) investing activities		—			(1,030	)		(278,471	)		33,445			—			(246,056	)
Financing Activities
Revolving credit facilities, net		—			(105,000	)		—			—			—			(105,000	)
Additions to term debt, net of discount		—			425,000			—			—			—			425,000
Payments of term debt		—			(100,176	)		—			(21	)		—			(100,197	)
Distributions paid		(107,842	)		(108,026	)		—			—			107,842			(108,026	)
Proceeds from sale of common shares/units, net of offering costs		128,270			128,270			—			—			(128,270	)		128,270
Lease deposits and other obligations to tenants		—			(360	)		9,431			1,808			—			10,879
Net payments relating to intercompany financing		(20,330	)		(61,206	)		46,446			14,662			20,428			—
Debt issuance costs paid and other financing activities		—			(11,757	)		—			—			—			(11,757	)
Net cash provided by financing activities		98			166,745			55,877			16,449			—			239,169
Increase (decrease) in cash and cash equivalents for period		—			89,290			(1,284	)		851			—			88,857
Effects of exchange rate changes on cash		—			—			(2,024	)		—			—			(2,024	)
Cash and cash equivalents at beginning of period		—			18,815			27,094			70			—			45,979
Cash and cash equivalents at end of period	$	—		$	108,105		$	23,786		$	921		$	—		$	132,812

Condensed Consolidated Balance Sheet

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	$	—	$	—		$	1,796,415		$	69,040		$	—		$	1,865,455
Mortgage loans		—		—			285,106			103,650			—			388,756
Net investment in direct financing leases		—		—			212,543			218,481			—			431,024
Gross investment in real estate assets		—		—			2,294,064			391,171			—			2,685,235
Accumulated depreciation and amortization		—		—			(151,624	)		(8,152	)		—			(159,776	)
Net investment in real estate assets		—		—			2,142,440			383,019			—			2,525,459
Cash and cash equivalents		—		18,815			27,094			70			—			45,979
Interest and rent receivables		—		336			31,492			26,737			—			58,565
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			1,096			29,466			—			67,873
Total Assets	$	1,379,961	$	2,789,267		$	2,282,644		$	607,818		$	(4,154,995	)	$	2,904,695
Liabilities and Equity
Liabilities
Debt, net	$	—	$	1,407,733		$	—		$	13,948		$	—		$	1,421,681
Accounts payable and accrued expenses		35,753		36,887			20,500			1,150			—			94,290
Net intercompany payable		—		—			1,556,634			386,203			(1,942,837	)		—
Deferred revenue		—		232			17,866			6,016			—			24,114
Lease deposits and other obligations to tenants		—		(183	)		18,163			2,422			—			20,402
Total liabilities		35,753		1,444,669			1,613,163			409,739			(1,942,837	)		1,560,487
Total equity		1,344,208		1,344,598			669,481			198,079			(2,212,158	)		1,344,208
Total Liabilities and Equity	$	1,379,961	$	2,789,267		$	2,282,644		$	607,818		$	(4,154,995	)	$	2,904,695

Condensed Consolidated Statements of Income

For the Three Months Ended September 30, 2013

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	29,189	$	5,650		$	(3,295	)	$	31,544
Straight-line rent		—			—			2,283		601			—			2,884
Income from direct financing leases		—			—			10,518		5,751			(4,971	)		11,298
Interest and fee income		—			5,004			9,096		7,317			(7,037	)		14,380
Total revenues		—			5,004			51,086		19,319			(15,303	)		60,106
Expenses
Real estate depreciation and amortization		—			—			8,012		702			—			8,714
Property-related		—			182			251		8,291			(8,266	)		458
General and administrative		—			6,867			—		(582	)		—			6,285
Acquisition expenses		—			4,179			—		—			—			4,179
Total operating expenses		—			11,228			8,263		8,411			(8,266	)		19,636
Operating income (loss)		—			(6,224	)		42,823		10,908			(7,037	)		40,470
Other income (expense)
Other income (expense)		—			5			—		(2	)		—			3
Earnings from equity and other interests		—			—			—		843			—			843
Interest income (expense)		—			(16,055	)		455		(7,267	)		7,037			(15,830	)
Income tax benefit (expense)		—			—			—		(94	)		—			(94	)
Net other income (expense)		—			(16,050	)		455		(6,520	)		7,037			(15,078	)
Income (loss) from continuing operations		—			(22,274	)		43,278		4,388			—			25,392
Income (loss) from discontinued operations		—			—			—		311			—			311
Equity in earnings of consolidated subsidiaries, net of income taxes		25,703			47,977			1,114		—			(74,794	)		—
Net income		25,703			25,703			44,392		4,699			(74,794	)		25,703
Net income (loss) attributable to non-controlling interests		(55	)		(55	)		—		—			55			(55	)
Net income attributable to MPT common stockholders	$	25,648		$	25,648		$	44,392	$	4,699		$	(74,739	)	$	25,648

Condensed Consolidated Statements of Income

For the Nine Months Ended September 30, 2013

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Rent billed	$	—		$	—		$	86,789	$	16,328		$	(9,045	)	$	94,072
Straight-line rent		—			—			6,894		1,458			—			8,352
Income from direct financing leases		—			—			27,387		16,744			(14,847	)		29,284
Interest and fee income		—			15,112			27,363		21,872			(21,211	)		43,136
Total revenues		—			15,112			148,433		56,402			(45,103	)		174,844
Expenses
Real estate depreciation and amortization		—			—			23,720		2,107			—			25,827
Property-related		—			458			817		24,137			(23,892	)		1,520
General and administrative		—			21,286			—		(124	)		—			21,162
Acquisition expenses		—			6,457			—		—			—			6,457
Total operating expenses		—			28,201			24,537		26,120			(23,892	)		54,966
Operating income (loss)		—			(13,089	)		123,896		30,282			(21,211	)		119,878
Other income (expense)
Other income (expense)		—			(38	)		—		(207	)		—			(245	)
Earnings from equity and other interests		—			—			—		2,511			—			2,511
Interest income (expense)		—			(46,297	)		1,082		(21,892	)		21,211			(45,896	)
Income tax benefit (expense)		—			—			—		(261	)		—			(261	)
Net other income (expense)		—			(46,335	)		1,082		(19,849	)		21,211			(43,891	)
Income (loss) from continuing operations		—			(59,424	)		124,978		10,433			—			75,987
Income (loss) from discontinued operations		—			—			—		3,330			—			3,330
Equity in earnings of consolidated subsidiaries net of income taxes		79,317			138,741			3,355		—			(221,413	)		—
Net income		79,317			79,317			128,333		13,763			(221,413	)		79,317
Net income (loss) attributable to non-controlling interests		(165	)		(165	)		—		—			165			(165	)
Net income attributable to MPT common stockholders	$	79,152		$	79,152		$	128,333	$	13,763		$	(221,248	)	$	79,152

Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended September 30, 2013

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	25,703		$	25,703		$	44,392	$	4,699	$	(74,794	)	$	25,703
Other comprehensive income:
Unrealized gain on interest rate swap		182			182			—		—		(182	)		182
Total comprehensive income		25,885			25,885			44,392		4,699		(74,976	)		25,885
Comprehensive income attributable to non-controlling interests		(55	)		(55	)		—		—		55			(55	)
Comprehensive income attributable to MPT common stockholders	$	25,830		$	25,830		$	44,392	$	4,699	$	(74,921	)	$	25,830

Condensed Consolidated Statements of Comprehensive Income

For the Nine Months Ended September 30, 2013

(in thousands)

	Parent			Subsidiary Issuers			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	79,317		$	79,317		$	128,333	$	13,763	$	(221,413	)	$	79,317
Other comprehensive income:
Unrealized gain on interest rate swap		2,788			2,788			—		—		(2,788	)		2,788
Total comprehensive income		82,105			82,105			128,333		13,763		(224,201	)		82,105
Comprehensive income attributable to non-controlling interests		(165	)		(165	)		—		—		165			(165	)
Comprehensive income attributable to MPT common stockholders	$	81,940		$	81,940		$	128,333	$	13,763	$	(224,036	)	$	81,940

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 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	$	91		$	(38,891	)	$	171,742		$	(31,378	)	$	—		$	101,564
Investing Activities
Cash paid for acquisitions and other related investments		—			—			(356,250	)		(15,250	)		—			(371,500	)
Principal received on loans receivable		—			—			—			4,694			—			4,694
Net proceeds from sale of real estate		—			—			—			18,409			—			18,409
Investments in loans receivable		—			—			—			(1,445	)		—			(1,445	)
Construction in progress and other		—			(765	)		(63,690	)		1,033			—			(63,422	)
Net cash used in investing activities		—			(765	)		(419,940	)		7,441			—			(413,264	)
Financing Activities
Revolving credit facilities, net		—			(80,000	)		—			—			—			(80,000	)
Additions to term debt		—			153,000			—			—			—			153,000
Payments of term debt		—			(11,000	)		—			(185	)		—			(11,185	)
Distributions paid		(87,727	)		(87,928	)		—			—			87,727			(87,928	)
Proceeds from sale of common stock/units, net of offering costs		313,319			313,319			—			—			(313,319	)		313,319
Lease deposits and other obligations to tenants		—			—			1,699			1,890			—			3,589
Net payments relating to intercompany financing		(225,683	)		(267,545	)		244,934			22,702			225,592			—
Debt issuance costs paid and other financing activities		—			(4,282	)		—			—			—			(4,282	)
Net cash provided by (used in) financing activities		(91	)		15,564			246,633			24,407			—			286,513
Increase (decrease) in cash and cash equivalents for period		—			(24,092	)		(1,565	)		470			—			(25,187	)
Cash and cash equivalents at beginning of period		—			35,483			1,565			263			—			37,311
Cash and cash equivalents at end of period	$	—		$	11,391		$	—		$	733		$	—		$	12,124