Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $0.20 per share and normalized FFO of positive $0.14 per share for Q1 2025, affected by a partial quarter impact from February debt refinancing transactions and increased stock compensation expense [21][22][24] - The second quarter normalized FFO is expected to be reduced by approximately $0.02 per share due to higher interest expenses from refinancing [21][22] Business Line Data and Key Metrics Changes - The new tenants in the transitional portfolio are ramping operations, with cash rents expected to increase significantly by Q4 2026, with specific operators like HSA and HonorHealth showing strong performance and growth initiatives [10][12][14] - The established portfolio continues to perform well, with operators like LifePoint Health reporting strong revenue growth driven by increased admissions [19][20] Market Data and Key Metrics Changes - Across the portfolio, operators reported strong results with increasing volumes and steady coverage, indicating resilience in the healthcare sector despite macroeconomic challenges [8][9] - In the UK, operators are benefiting from increased private medical insurance utilization, with Circle Health investing in innovative technologies to enhance performance [17][18] Company Strategy and Development Direction - The company aims to empower hospital operators by providing affordable capital solutions, enhancing financial flexibility, and redirecting funds into patient care [9][10] - The focus remains on creating value for shareholders through accretive growth opportunities and maintaining a diversified portfolio [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthcare sector's resilience and the company's ability to navigate challenges, emphasizing the importance of hospital assets in communities [8][29] - The company is optimistic about reaching total annualized cash rent of over $1 billion as new tenants ramp up operations [11][20] Other Important Information - The company issued over $2.5 billion in secured bonds to strengthen its balance sheet and ensure liquidity through 2026 [10] - Impairments and fair market value adjustments totaling approximately $73 million were recorded, reflecting challenges in certain investments [22] Q&A Session Summary Question: Risks to Steward transitioned assets and ramp-up ability - Management does not foresee risks to the ramp-up of new operators despite challenges in the Steward bankruptcy process, noting limited uncollected amounts [34][35] Question: Details on the $40 million investment - The investment was made during the quarter to repurchase assets previously part of Steward campuses, which are expected to generate rent [36][38] Question: Monitoring regulatory changes and potential Medicaid cuts - Management is not concerned about potential changes to Medicare or Medicaid, stating that tenants are not nervous about these changes [43][44] Question: Updates on operators in Colombia and other situations - The operator in Colombia is performing well despite political challenges, and the 1% tenant is back on track after a strong quarter [48][49] Question: Timing for Prospect process following court approval - The company expects to identify potential new tenants for Prospect hospitals by late May or early June [50]

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $413 million for Q4 2024 and a normalized FFO of $0.18 per share, with a full-year GAAP net loss of $2.4 billion and normalized FFO of $0.80 per share [38][39] - Impairments and adjustments related to Prospect's Chapter 11 bankruptcy impacted GAAP results, leading to a $415 million adjustment to normalized FFO in the quarter [39] Business Line Data and Key Metrics Changes - The company has seen improvements in hospital fundamentals, with admissions and surgical volumes growing, leading to better coverage across all asset types in the portfolio [21] - New operators added to the portfolio are expected to ramp up cash rent payments to an aggregate quarterly run rate of about $40 million by October 2026 [22][54] Market Data and Key Metrics Changes - In the U.K., private medical insurance utilization has reached an all-time high, benefiting Circle Health and Priory, which reported strong revenue and EBITDARM performance [31][32] - LifePoint Health has shown strong top-line growth driven by increased admissions, with Conemaugh Memorial reporting a 23% year-over-year increase in admissions [34] Company Strategy and Development Direction - The company executed approximately $3 billion in liquidity transactions in 2024, exceeding its $2 billion target, and issued over $2.5 billion in secured bonds to strengthen liquidity [10][11] - The company aims to continue executing its strategy with a focus on generating predictable rent payments and enhancing recoveries from the Prospect bankruptcy [19][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model, emphasizing the need for hospitals to access affordable capital to innovate and serve patients [16] - The company anticipates total annualized cash rent of more than $1 billion once new tenants are fully ramped, with debt maturities covered through 2026 [19] Other Important Information - The company has agreed to provide $25 million in funding to support Prospect during its bankruptcy proceedings, pending court approval [14] - The company has a diverse global portfolio of hospital real estate, which remains attractive to investors and operators [11] Q&A Session Summary Question: Can you provide additional color on Prospect? - The settlement agreement is subject to court approval, and MPT is treated as a secured creditor, with various resolutions being sought for the best financial results [63][64] Question: Are there any other asset sales currently being evaluated? - No other pending sales have been announced, but there are a couple of small sales still pending, totaling well under $100 million [68][70] Question: Are the new tenants cash flow positive before rent? - Most operators are cash flow positive at this point, with cash collections ramping up [74][75] Question: What led to the decline in Accordion Health Services coverage? - The decline is attributed to ongoing healthcare reform in Colombia, not operational issues [86][87] Question: What is the percentage of encumbered versus unencumbered assets? - Approximately $6 billion is encumbered, with the remainder being unencumbered [109] Question: Any expectations about collecting rent from co-off payments? - Significant exposure to co-off is expected to come in March and April [102]