MEDICAL PROPERTIES TRUST INC Management’s Discussion and Analysis of Financial Condition and Results of Operations. (Form 10-Q)

The following discussion and analysis of the consolidated financial condition
and consolidated results of operations are presented on a combined basis for
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. as there are
no material differences between these two entities. Such discussion and analysis
should be read together with the condensed consolidated financial statements and
notes thereto contained in this Form 10-Q and the consolidated financial
statements and notes thereto contained in our Annual Report on Form 10-K for the
year ended December 31, 2021.

Forward-Looking Statements.


This Quarterly Report on Form 10-Q contains certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results or future
performance, achievements or transactions or events to be materially different
from those expressed or implied by such forward-looking statements, including,
but not limited to, the risks described in our Annual Report on Form 10-K and as
updated in our quarterly reports on Form 10-Q for future periods, and current
reports on Form 8-K as we file them with the SEC under the Exchange Act. Such
factors include, among others, the following:

the political, economic, business, real estate, and other market conditions in
the U.S. (both national and local), Europe (in particular the United Kingdom,
Germany, Switzerland, Spain, Italy, Finland, and Portugal), Australia, South
America (in particular Colombia), and other foreign jurisdictions where we may
own healthcare facilities or transact business, which may have a negative effect
on the following, among other things:

o
the financial condition of our tenants, our lenders, or institutions that hold
our cash balances or are counterparties to certain hedge agreements, which may
expose us to increased risks of default by these parties;

o
our ability to obtain equity or debt financing on attractive terms or at all,
which may adversely impact our ability to pursue acquisition and development
opportunities, refinance existing debt, and our future interest expense; and

o
the value of our real estate assets, which may limit our ability to dispose of
assets at attractive prices or obtain or maintain debt financing secured by our
real estate assets or on an unsecured basis;

the impact of COVID-19 on our business, our joint ventures, and the business of
our tenants/borrowers and the economy in general, as well as the impact of other
factors that may affect our business, our joint ventures or that of our
tenants/borrowers that are beyond our control, including natural disasters,
health crises, or other pandemics and subsequent government actions in reaction
to such matters;

the risk that a condition to closing under the agreements governing any or all
of our pending transactions (including the transaction disclosed in   Note 9  )
that have not closed as of the date hereof may not be satisfied;

the possibility that the anticipated benefits of some or all of the transactions we have entered into or will enter into may take longer to materialize than expected or may not materialize at all;

the competitive environment in which we operate;

execution of our business plan;

funding risks, in particular due to rising inflation;

acquisition and development risks;

potential environmental contingencies and other liabilities;

adverse developments affecting the financial health of one or more of our tenants, including insolvency;

other factors affecting the real estate industry generally or the healthcare real estate industry specifically;

our ability to maintain our status as a REIT for WE for federal and state income tax purposes;

our ability to attract and retain qualified personnel;

changes in currency exchange rates;

changes in federal, state, or local tax laws in the U.S., Europe, Australia,
South America, or other jurisdictions in which we may own healthcare facilities
or transact business;

health care and other regulatory requirements of the WE, Europe, Australia,
South America, and other foreign countries; and

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the accuracy of our methodologies and estimates regarding environmental, social,
and governance ("ESG") metrics and targets, tenant willingness and ability to
collaborate towards reporting ESG metrics and meeting ESG goals and targets, and
the impact of governmental regulation on our and our tenants' ESG efforts.

Key factors that may affect our operations


Our revenue is derived from rents we earn pursuant to the lease agreements with
our tenants, from interest income from loans to our tenants and other facility
owners, and from profits or equity interests in certain of our tenants'
operations. Our tenants operate in the healthcare industry, generally providing
medical, surgical, rehabilitative, and behavioral health care to patients. The
capacity of our tenants to pay our rents and interest is dependent upon their
ability to conduct their operations at profitable levels. We believe that the
business environment of the industry segments in which our tenants operate is
generally positive for efficient operators. However, our tenants' operations are
subject to economic, regulatory, market, and other conditions (such as the
impact of the COVID-19 pandemic) that may affect their profitability, which
could impact our results. Accordingly, we monitor certain key performance
indicators that we believe provide us with early indications of conditions that
could affect the level of risk in our portfolio.

Key factors that we may consider in underwriting prospective deals and in our
ongoing monitoring of our tenants' (and guarantors') performance, as well as the
condition of our properties, include, but are not limited to, the following:

scope and breadth of clinical services and programs, including usage trends (for inpatients and outpatients) by type of service;

the size and composition of medical staff and physician management at our facilities, including specialty, seniority, and number of procedures performed and/or referrals;

an assessment of the administrative team of our operators, if any, including background and seniority in the healthcare industry;

staffing trends, including ratios, turnover measures, recruitment and retention strategies at the corporate and individual facility levels;

facility operating performance measured by current, historical, and prospective
operating margins (measured by a tenant's earnings before interest, taxes,
depreciation, amortization, management fees, and facility rent) of each tenant
and at each facility;

the ratio of our tenants’ operating profits to facility rent and other fixed costs, including debt costs;

changes in revenue sources of our tenants, including the relative mix of public
payors (including Medicare, Medicaid/MediCal, and managed care in the U.S., as
well as equivalent payors in Europe, Australia, and South America) and private
payors (including commercial insurance and private pay patients);

historical support (financial or otherwise) from governments and/or other public payer systems during major economic downturns/depressions;

tenant revenue trends, including comparison to recorded net revenue from patient services;


•
tenants' free cash flow;

the potential impact of healthcare pandemics/epidemics, legislation, and other
regulations (including changes in reimbursement) on our tenants' or borrowers'
profitability and liquidity;

the potential impact of any legal, regulatory or compliance proceedings with our tenants;

an ongoing assessment of the operating environment of our tenants, including
demographics, competition, market position, status of compliance, accreditation,
quality performance, and health outcomes as measured by The Centers for Medicare
and Medicaid Services, Joint Commission, and other governmental bodies in which
our tenants operate;

the level of investment in hospital infrastructure and health information systems; and

physical property due diligence, typically including property condition and Phase 1 environmental assessments, and annual property inspections thereafter.



Certain business factors, in addition to those described above that directly
affect our tenants and borrowers, will likely materially influence our future
results of operations. These factors include:

trends in interest rates and other costs due to general inflation and increased availability and costs due to labor shortages could adversely impact our tenants’ operations and capacity to meet their rental obligations;

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changes in healthcare regulations that may limit opportunities for physicians to participate in the ownership of healthcare providers and healthcare real estate;

reductions in reimbursements from Medicare, state health care programs and commercial insurers that may reduce the profitability of our tenants or borrowers and our revenues;

competition from other funding sources; and

the ability of our tenants and borrowers to access funds in the credit markets.

CRITICAL ACCOUNTING METHODS


Refer to our 2021 Annual Report on Form 10-K for a discussion of our critical
accounting policies, which include investments in real estate, purchase price
allocation, loans, credit losses, losses from rent and interest receivables,
investments accounted for under the fair value option election, and our
accounting policy on consolidation. During the three months ended March 31,
2022, there were no material changes to these policies.

Insight


We are a self-advised REIT focused on investing in and owning net-leased
healthcare facilities across the U.S. and selectively in foreign jurisdictions.
Medical Properties Trust, Inc. was incorporated under Maryland law on August 27,
2003, and MPT Operating Partnership, L.P. was formed under Delaware law on
September 10, 2003. We conduct substantially all of our business through MPT
Operating Partnership, L.P. We acquire and develop healthcare facilities and
lease the facilities to healthcare operating companies under long-term net
leases, which require the tenant to bear most of the costs associated with the
property. We also make mortgage loans to healthcare operators collateralized by
their real estate assets. From time-to-time, we may make noncontrolling
investments in our tenants that gives us a right to share in such tenant's
profits and losses and provide for certain minority rights and protections. Our
business model facilitates acquisitions and recapitalization, and allows
operators of healthcare facilities to unlock the value of their real estate
assets to fund facility improvements, technology upgrades, and other investments
in operations.

At March 31, 2022, our portfolio consisted of 440 properties leased or loaned to
53 operators, of which two are under development and four are in the form of
mortgage loans. We manage our business as a single business segment.

At March 31, 2022, all of our investments are located in the U.S., Europe,
Australia, and South America. Our total assets are made up of the following
(dollars in thousands):

                                       As of                            As of
                                     March 31,          % of        December 31,         % of
                                        2022           Total            2021            Total
Real estate assets - at cost        $ 16,316,567           82.3 %   $  17,425,765           84.9 %
Accumulated real estate
depreciation and amortization         (1,054,361 )         -5.3 %        (993,100 )         -4.8 %
Cash and cash equivalents                248,846            1.3 %         459,227            2.2 %
Investments in unconsolidated
real estate joint ventures             1,534,514            7.7 %       1,152,927            5.6 %
Investments in unconsolidated
operating entities                     1,455,842            7.3 %       1,289,434            6.3 %
Other                                  1,316,426            6.7 %       1,185,548            5.8 %
Total assets                        $ 19,817,834          100.0 %   $  20,519,801          100.0 %



Additional Concentration Details


On a pro forma gross asset basis (as defined in the   "Reconciliation of
Non-GAAP Financial Measures"   section of Item 2 of this Quarterly Report on
Form 10-Q), our concentration as of March 31, 2022 as compared to December 31,
2021 is as follows (dollars in thousands):

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Total pro forma gross assets by operator


                                             As of March 31, 2022                      As of December 31, 2021
                                                            Percentage of                              Percentage of
                                     Total Pro Forma       Total Pro Forma      Total Pro Forma       Total Pro Forma
Operators                             Gross Assets          Gross Assets          Gross Assets         Gross Assets
Steward
Florida market                      $       1,337,192                   6.0 %   $      1,334,834                   6.0 %
Massachusetts market                        1,173,852                   5.3 %          1,177,914                   5.3 %
Texas/Arkansas/Louisiana market               983,344                   4.4 %          1,129,624                   5.1 %
Arizona market                                338,873                   1.5 %            338,612                   1.5 %
Ohio/Pennsylvania market                      141,615                   0.7 %            141,506                   0.6 %
Circle                                      2,408,716                  10.8 %          2,481,001                  11.1 %
Prospect                                    1,639,588                   7.4 %          1,631,691                   7.3 %
Swiss Medical Network                       1,299,524                   5.8 %          1,300,431                   5.8 %
HCA(1)                                      1,240,264                   5.6 %          1,240,546                   5.6 %
Other operators                            10,643,938                  47.9 %         10,632,605                  47.6 %
Other assets                                1,028,068                   4.6 %            920,573                   4.1 %
Total                               $      22,234,974                 100.0 %   $     22,329,337                 100.0 %


(1)

Shown pro forma for transactions discussed in Note 9 to Item 1 of this Form 10-Q.

Total pro forma gross assets by WE state and country

                                           As of March 31, 2022                      As of December 31, 2021
                                                          Percentage of                              Percentage of
                                   Total Pro Forma       Total Pro Forma      Total Pro Forma       Total Pro Forma
U.S. States and Other Countries     Gross Assets          Gross Assets          Gross Assets         Gross Assets
Texas                             $       1,995,890                   9.0 %   $      2,172,882                   9.7 %
California                                1,641,873                   7.4 %          1,650,038                   7.4 %
Florida                                   1,337,191                   6.0 %          1,334,835                   6.0 %
Utah                                      1,255,334                   5.6 %          1,255,545                   5.6 %
Massachusetts                             1,179,252                   5.3 %          1,183,313                   5.4 %
All other states                          5,141,829                  23.1 %          5,131,596                  23.0 %
Other domestic assets                       730,743                   3.3 %            692,280                   3.1 %
Total U.S.                        $      13,282,112                  59.7 %   $     13,420,489                  60.2 %
United Kingdom                    $       4,362,100                  19.6 %   $      4,492,918                  20.1 %
Switzerland                               1,299,524                   5.9 %          1,300,431                   5.8 %
Germany                                   1,222,002                   5.5 %          1,257,482                   5.6 %
Australia                                   986,926                   4.4 %          1,043,399                   4.7 %
Spain                                       258,343                   1.2 %            264,965                   1.2 %
All other countries                         526,642                   2.4 %            321,360                   1.4 %
Other international assets                  297,325                   1.3 %            228,293                   1.0 %
Total international               $       8,952,862                  40.3 %   $      8,908,848                  39.8 %
Grand total                       $      22,234,974                 100.0 %   $     22,329,337                 100.0 %


On an individual property basis, we had no investment in any single property greater than 3% of our total pro forma gross assets at March 31, 2022.


On an adjusted revenues basis (as defined in the "Reconciliation of Non-GAAP
Financial Measures" section of Item 2 of this Quarterly Report on Form 10-Q),
concentration for the three months ended March 31, 2022 as compared to the prior
year is as follows (dollars in thousands):


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Total adjusted revenue by operator


                                                         For the Three Months Ended March 31,
                                                    2022                                      2021
                                                          Percentage of                             Percentage of
                                     Total Adjusted       Total Adjusted       Total Adjusted       Total Adjusted
Operators                               Revenues             Revenues             Revenues             Revenues
Steward
Massachusetts market                $         35,818                  8.0 %   $         34,543                  8.8 %
Utah market(1)                                32,763                  7.4 %             31,705                  8.0 %
Florida market                                25,304                  5.7 %              4,985                  1.3 %
Texas/Arkansas/Louisiana market               18,612                  4.2 %             22,671                  5.7 %
Arizona market                                 8,532                  1.9 %              8,187                  2.1 %
Ohio/Pennsylvania market                       3,565                  0.8 %              3,300                  0.8 %
Circle                                        51,212                 11.5 %             53,192                 13.5 %
Prospect                                      38,684                  8.7 %             38,066                  9.7 %
Prime                                         30,132                  6.8 %             30,415                  7.7 %
MEDIAN                                        22,866                  5.1 %             24,049                  6.1 %
Other operators                              177,288                 39.9 %            143,304                 36.3 %
Total                               $        444,776                100.0 %   $        394,417                100.0 %



(1)
See   Note 9   to Item 1 of this Form 10-Q for a potential transaction involving
this market.

Total Adjusted Revenues by WE state and country


                                                        For the Three Months Ended March 31,
                                                   2022                                      2021
                                                         Percentage of                             Percentage of
                                    Total Adjusted       Total Adjusted       Total Adjusted       Total Adjusted
U.S. States and Other Countries        Revenues             Revenues             Revenues             Revenues
California                         $         41,291                  9.3 %   $         34,004                  8.6 %
Massachusetts                                35,981                  8.1 %             34,702                  8.8 %
Texas                                        34,844                  7.8 %             39,128                  9.9 %
Utah                                         33,768                  7.6 %             32,677                  8.3 %
Florida                                      25,305                  5.7 %              5,547                  1.4 %
All other states                            125,907                 28.3 %            111,102                 28.2 %
Total U.S.                         $        297,096                 66.8 %   $        257,160                 65.2 %
United Kingdom                     $         83,906                 18.9 %   $         76,560                 19.4 %
Germany                                      24,883                  5.6 %             26,162                  6.6 %
All other countries                          38,891                  8.7 %             34,535                  8.8 %
Total international                $        147,680                 33.2 %   $        137,257                 34.8 %
Grand total                        $        444,776                100.0 %   $        394,417                100.0 %



Total Adjusted Revenues by Facility Type


                                                        For the Three Months Ended March 31,
                                                   2022                                      2021
                                                         Percentage of                             Percentage of
                                    Total Adjusted       Total Adjusted       Total Adjusted       Total Adjusted
Facility Types                         Revenues             Revenues             Revenues             Revenues
General acute care hospitals       $        334,858                 75.3 %   $        315,434                 80.0 %
Behavioral health facilities                 50,897                 11.4 %             19,754                  5.0 %
Inpatient rehabilitation
hospitals                                    45,043                 10.1 %             45,303                 11.5 %
Long-term acute care hospitals                8,302                  1.9 %              8,186                  2.1 %
Freestanding ER/urgent care
facilities                                    5,676                  1.3 %              5,740                  1.4 %
Total                              $        444,776                100.0 %   $        394,417                100.0 %






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Operating results

Three months completed March 31, 2022 Compared to March 31, 2021


Net income for the three months ended March 31, 2022, was $631.7 million
compared to $163.8 million for the three months ended March 31, 2021. This 286%
increase in net income is primarily due to the gain on sale of real estate in
the 2022 first quarter from the Macquarie Transaction as described in   Note 3
to the condensed consolidated financial statements, partially offset by higher
interest expense, depreciation expense, and general and administrative costs.
Normalized funds from operations ("FFO"), after adjusting for certain items (as
more fully described in the "Reconciliation of Non-GAAP Financial Measures"
section of Item 2 of this Quarterly Report on Form 10-Q), was $282.5 million for
the 2022 first quarter, or $0.47 per diluted share, as compared to $243.9
million, or $0.42 per diluted share, for the 2021 first quarter. This 16%
increase in Normalized FFO is primarily due to incremental revenue from new
investments made in 2021 and the first quarter of 2022.

A comparison of earnings for the completed three-month periods March 31, 2022 and 2021 is as follows (amounts in thousands of dollars):

                                                                                    Year over
                                              % of                      % of          Year
                                 2022         Total        2021         Total        Change
Rent billed                    $ 263,402        64.3 %   $ 213,344        58.9 %          23.5 %
Straight-line rent                61,044        14.9 %      54,873        15.1 %          11.2 %
Income from financing leases      51,776        12.6 %      50,894        14.0 %           1.7 %
Interest and other income         33,578         8.2 %      43,654        12.0 %         -23.1 %
Total revenues                 $ 409,800       100.0 %   $ 362,765       100.0 %          13.0 %


Our total revenue for the first quarter of 2022 is up $47.0 million, or 13%, over the previous year. This increase consists of the following elements:

Operating lease revenue (includes rent billed and straight-line rent) - up $56.2
million over the prior year of which approximately $67.5 million is incremental
revenue from acquisitions made in 2021 (including approximately $18.0 million
each from Springstone, Steward's South Florida operations, and Priory Group
Transaction as described in   Note 3   to the condensed consolidated financial
statements) and early 2022 (primarily our Finland acquisition). In addition,
rent revenues are up due to approximately $5 million from increases in CPI above
the minimum increases in the lease, $0.2 million from capital additions in 2022,
and $0.5 million from the commencement of rent on a development property in the
first quarter of 2022. This increase is partially offset by approximately $15.1
million of lower revenues from disposals in 2021 and early 2022 (including a
$4.1 million decrease from the properties disposed of in the Macquarie
Transaction as described in   Note 3   to the condensed consolidated financial
statements and $4.5 million of straight-line rent write-offs associated with
non-Macquarie Transaction disposals in the first quarter of 2022) and $2.9
million of unfavorable foreign currency fluctuations.

Finance lease income – up $0.9 million mainly due to annual rent increases resulting from the increase in the CPI in the first quarter of 2022.

Interest and other income – down $10.1 million of the previous year due to the following:


o
Interest from loans - down $12.9 million over the prior year due to $15.9
million of less interest revenue earned on the Priory loans from the conversion
of the £800 million mortgage loan to fee simple assets in the second quarter of
2021 and the repayment of the £250 million acquisition loan in the 2021 fourth
quarter as described in   Note 3  , lower revenues from loans that were paid off
since the first quarter of 2021, and $1.0 million of unfavorable foreign
currency fluctuations. This decrease is partially offset by $5.6 million of
incremental revenue earned on investments in 2021 (primarily Springstone) and
early 2022 (Priory syndicated loan) and $0.6 million of income from annual
escalations due to increases in CPI.

o

Other income – up $2.8 million compared to the previous year, as we received more direct reimbursements from our tenants for ground lease, property taxes and insurance.


Interest expense for the quarters ended March 31, 2022 and 2021 totaled $91.2
million and $87.0 million, respectively. This increase is primarily related to
new debt issuances in 2021 to fund new investments, as our weighted-average
interest rate of 3.1% for the quarter ended March 31, 2022 is lower than the
3.4% in the same period in 2021.

Depreciation and amortization of real estate during the first quarter of 2022 increased to $85.3 million from $75.6 million in 2021 due to new investments made after March 31, 2021.

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Property-related expenses totaled $8.6 million and $5.5 million for the quarters
ended March 31, 2022 and 2021, respectively. Of the property expenses in the
first three months of 2022 and 2021, approximately $6.3 million and $3.5
million, respectively, represents costs that were reimbursed by our tenants and
included in the "Interest and other income" line on our condensed consolidated
statements of net income.

As a percentage of revenue, general and administrative expenses represented
10.1% for the 2022 first quarter, slightly higher than 9.9% in the prior year.
On a dollar basis, general and administrative expenses totaled $41.4 million for
the 2022 first quarter, which is a $5.4 million increase from the prior year
first quarter and reflective of the growth of the company, in particular higher
compensation to non-executive employees (partially due to an increase in
employee head count) and approximately $1 million of more charitable giving.

During the three months ended March 31, 2022, we completed the partnership with
MAM in which we sold the real estate of eight Massachusetts-based general acute
care hospitals, resulting in a gain on real estate of approximately $600
million, partially offset by approximately $125 million of write-offs of
non-cash straight-line rent receivables. We also disposed of two other
facilities and an ancillary property resulting in a net gain of $15 million.
During the three months ended March 31, 2021, we sold one facility and an
ancillary property resulting in a net gain of $1.0 million.

Earnings from equity interests was $7.3 million for the quarter ended March 31,
2022, up $0.2 million from the same period in 2021, primarily due to $1.2
million of income generated on our Massachusetts-based partnership with MAM
entered into during March 2022, partially offset by the loss of equity interest
income from the IMED joint venture that we acquired the remaining 50% interest
of during December 2021.

Debt refinancing and unutilized financing costs were $8.8 million and $2.3
million for the quarters ended March 31, 2022 and 2021, respectively. The costs
incurred in the first quarter of 2022 were a result of the termination of our $1
billion interim credit facility (see   Note 4   to the condensed consolidated
financial statements for more detail). In 2021, these costs were a result of the
early termination of our January 2021 Interim Credit Facility and the amendment
to our Credit Facility.

In the first quarter of 2022, we recorded a favorable non-cash fair value adjustment of $8.0 million on our investment in Aevis and other investments measured at fair value to a $4.1 million favorable adjustment for the same period in 2021.


Income tax expense includes U.S. federal and state income taxes on our TRS
entities, as well as non-U.S. income based or withholding taxes on certain
investments located in jurisdictions outside the U.S. The $11.4 million income
tax expense for the three months ended March 31, 2022 is primarily based on the
income generated by our investments in the United Kingdom, Colombia, and
Australia. In comparison, we incurred $8.4 million in income tax expense in the
first quarter of 2021. This $3.0 million increase is primarily due to the Priory
transaction in the first quarter of 2021 and our investment in Springstone in
the fourth quarter of 2021.

We utilize the asset and liability method of accounting for income taxes.
Deferred tax assets are recorded to the extent we believe these assets will more
likely than not be realized. In making such determination, all available
positive and negative evidence is considered, including scheduled reversals of
deferred tax liabilities, projected future taxable income, tax planning
strategies, and recent financial performance. Based upon our review of all
positive and negative evidence, including our three-year cumulative pre-tax book
loss position in certain entities, we concluded that a valuation allowance of
approximately $77.5 million should be reflected against certain of our
international and domestic net deferred tax assets at March 31, 2022. In the
future, if we determine that it is more likely than not that we will realize our
net deferred tax assets, we will reverse the applicable portion of the valuation
allowance, recognize an income tax benefit in the period in which such
determination is made, and incur higher income taxes in future periods as income
is earned.

Reconciliation of Non-GAAP Financial Measures


Investors and analysts following the real estate industry utilize funds from
operations, or FFO, as a supplemental performance measure. FFO, reflecting the
assumption that real estate asset values rise or fall with market conditions,
principally adjusts for the effects of GAAP depreciation and amortization of
real estate assets, which assumes that the value of real estate diminishes
predictably over time. We compute FFO in accordance with the definition provided
by the National Association of Real Estate Investment Trusts, or Nareit, which
represents net income (loss) (computed in accordance with GAAP), excluding gains
(losses) on sales of real estate and impairment charges on real estate assets,
plus real estate depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures.

In addition to presenting FFO in accordance with the Nareit definition, we
disclose normalized FFO, which adjusts FFO for items that relate to
unanticipated or non-core events or activities or accounting changes that, if
not noted, would make comparison to prior period results and market expectations
less meaningful to investors and analysts.

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We believe that the use of FFO, combined with the required GAAP presentations,
improves the understanding of our operating results among investors and the use
of normalized FFO makes comparisons of our operating results with prior periods
and other companies more meaningful. While FFO and normalized FFO are relevant
and widely used supplemental measures of operating and financial performance of
REITs, they should not be viewed as a substitute measure of our operating
performance since the measures do not reflect either depreciation and
amortization costs or the level of capital expenditures and leasing costs
necessary to maintain the operating performance of our properties, which can be
significant economic costs that could materially impact our results of
operations. FFO and normalized FFO should not be considered an alternative to
net income (loss) (computed in accordance with GAAP) as indicators of our
financial performance or to cash flow from operating activities (computed in
accordance with GAAP) as an indicator of our liquidity.

The following table presents a reconciliation of net income attributable to MPT
common stockholders to FFO and Normalized FFO for the three months ended March
31, 2022 and 2021 (amounts in thousands except per share data):

                                                              For the Three Months Ended
                                                        March 31, 2022         March 31, 2021
FFO information:
Net income attributable to MPT common stockholders      $       631,681       $        163,783
Participating securities' share in earnings                        (402 )                 (370 )

Net profit less share of equity in profit

                                                $       631,279       $        163,413
Depreciation and amortization                                    99,459                 88,536
Gain on sale of real estate and other, net                     (451,638 )                 (989 )
Funds from operations                                   $       279,100       $        250,960
Write-off (recovery) of straight-line rent and other              2,604                 (5,238 )
Non-cash fair value adjustments                                  (8,023 )               (4,065 )
Debt refinancing and unutilized financing costs                   8,816                  2,269
Normalized funds from operations                        $       282,497       $        243,926
Per diluted share data:
Net income, less participating securities' share in
earnings                                                $          1.05       $           0.28
Depreciation and amortization                                      0.17                   0.15
Gain on sale of real estate and other, net                        (0.75 )                    -
Funds from operations                                   $          0.47       $           0.43
Write-off (recovery) of straight-line rent and other                  -                  (0.01 )
Non-cash fair value adjustments                                   (0.01 )                    -
Debt refinancing and unutilized financing costs                    0.01                      -
Normalized funds from operations                        $          0.47       $           0.42




Total Pro Forma Gross Assets

Total pro forma gross assets is total assets before accumulated
depreciation/amortization (adjusted for our unconsolidated joint ventures) and
assumes material real estate commitments on new investments are fully funded,
and assumes cash on-hand at period-end and cash generated from or to be
generated from financing activities subsequent to period-end are used in these
transactions. We believe total pro forma gross assets is useful to investors as
it provides a more current view of our portfolio and allows for a better
understanding of our concentration levels as our commitments close. The
following table presents a reconciliation of total assets to total pro forma
gross assets (in thousands):

                                                        As of                  As of
                                                    March 31, 2022       December 31, 2021
Total assets                                       $     19,817,834     $        20,519,801
Add:
Accumulated depreciation and amortization                 1,054,361         

993 100

Incremental gross assets of our joint ventures
and other(1)                                              1,611,625               1,713,603
Less:
Cash on hand(2)                                            (248,846 )              (897,167 )
Total pro forma gross assets                       $     22,234,974     $        22,329,337




(1)
Adjustment to reflect our share of our joint ventures' gross assets and certain
lease intangible assets.
(2)
Includes cash available on-hand plus cash generated from activities subsequent
to period-end such as loan repayments, issuances of debt or equity, or
dispositions.

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Total Adjusted Revenues


Total adjusted revenues are total revenues adjusted for our pro rata portion of
similar revenues in our real estate joint venture arrangements. We believe total
adjusted revenues are useful to investors as it provides a more complete view of
revenues across all of our investments and allows for better understanding of
our revenue concentration. The following table presents a reconciliation of
total revenues to total adjusted revenues (in thousands):

                                                        For the Three Months Ended March 31,
                                                            2022                    2021
Total revenues                                        $         409,800       $         362,765
Revenues from real estate properties owned through
joint venture
  arrangements                                                   34,976                  31,652
Total adjusted revenues                               $         444,776       $         394,417




CASH AND CAPITAL RESOURCES

Cash activity 2022


During the 2022 first quarter, we generated approximately $179.4 million of cash
flows from operating activities, primarily consisting of rent and interest from
mortgage and other loans. We used these operating cash flows to fund our
dividends of $176.5 million and certain investment activities. During the
quarter, we received approximately $1.3 billion of proceeds from the Macquarie
Transaction and obtained a 50% interest in the partnership valued at
approximately $400 million (see   Note 3   to Item 1 of this Form 10-Q for
further details). We used these proceeds to pay off our July 2021 Interim Credit
Facility, pay down our revolving credit facility, and along with cash on-hand
and cash from other disposal transactions, to invest in new real estate and
other assets.

Subsequent to quarter-end, we exercised the $500 million accordion feature to
our revolving credit facility- see   Note 10   to Item 1 of this Form 10-Q for
additional details.

2021 Cash Flow Activity

During the 2021 first quarter, we generated approximately $188.7 million of cash
flows from operating activities, primarily consisting of rent and interest from
mortgage and other loans. We used these operating cash flows, along with $11
million received from Steward as a return of capital distribution, to fund our
dividends of $147.7 million and certain investment activities. In addition, we
invested approximately $1.8 billion in real estate and other assets, including
the £1.1 billion Priory Group Transaction in January 2021 (as more fully
described in   Note 3   to Item 1 of this Form 10-Q), using a combination of
cash on-hand generated from the $779.2 million of net proceeds from the sales of
stock during the quarter, £500 million of proceeds from an interim credit
facility, and proceeds from our revolving facility. In late March 2021, we
issued £850 million of senior unsecured notes and used such proceeds to pay off
our interim credit facility in full and reduce our revolving credit facility
balance to less than $200 million outstanding.

Short-term liquidity requirements:


At May 6, 2022 and after the exercise of the $500 million accordion under our
unsecured revolving loan facility (as discussed in   Note 10   to Item 1 of this
Form 10-Q), our liquidity approximates $1.1 billion. We believe this liquidity
along with our current monthly cash receipts from rent and loan interest and
regular distributions from our joint venture arrangements, is sufficient to fund
our operations, dividends in order to comply with REIT requirements, our current
firm commitments (capital expenditures and expected funding requirements on
development projects), and debt service obligations for the next twelve months
(including contractual interest payments). We expect that other capital
recycling transactions (that could include sales of single facilities) will
further improve our liquidity and our leverage ratio, although no assurances can
be given that our capital recycling efforts will be successful.

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Long-term liquidity requirements:


As of May 6, 2022 and after the exercise of the $500 million accordion under our
unsecured revolving loan facility (as discussed in   Note 10   to Item 1 of this
Form 10-Q), our liquidity approximates $1.1 billion. We believe that our
liquidity, along with our current monthly cash receipts from rent and loan
interest and regular distributions from our joint venture arrangements, is
sufficient to fund our operations, debt and interest obligations, our firm
commitments, and dividends in order to comply with REIT requirements for the
foreseeable future.

However, in order to make additional investments, to fund debt maturities coming
due in 2023 and beyond (as outlined below), to strategically refinance any
existing debt in order to reduce interest rates, or to further improve our
leverage ratios, we may need to access one or a combination of the following
sources of capital:

sales of strategic properties or joint ventures;

•
sale of equity securities;

•
new bank term loans;

•

new debt securities denominated in USD, EUR or GBP, including senior unsecured notes; and or

new real estate secured loans.

However, there can be no assurance that conditions will be favorable to such possible transactions or that our plans will be successful.


Principal payments due on our debt (which exclude the effects of any discounts,
premiums, or debt issue costs recorded) as of May 6, 2022 are as follows (in
thousands):

2022         $          -
2023              493,920
2024            1,706,611
2025            1,391,910
2026            1,844,950
Thereafter      4,773,060
Total        $ 10,210,451


Contractual Commitments

We presented our contractual commitments in our 2021 Annual Report on Form 10-K.
Except for changes to our purchase obligations and operating lease commitments,
there have been no other significant changes through May 6, 2022.

The following table updates our contractual commitment schedule for these updates as of May 6, 2022 (in thousands):

Contractual commitments 2022(1) 2023 2024 2025 2026 Thereafter Total Purchase obligations $269,883 $288,935 $99,237 $62,506 $42,456 $80,322 $843,339
Operating lease commitments 4,964 8,933 9,020 8,381 7,883 247 907 287,088

(1)

This column represents the obligations after May 6, 2022.

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Distributor policy

The table below is a summary of our distributions declared over the two-year period ended March 31, 2022:

Distribution

Declaration Date       Record Date       Date of Distribution     per Share
February 17, 2022   March 17, 2022       April 14, 2022         $         0.29
November 11, 2021   December 9, 2021     January 13, 2022       $         0.28
August 19, 2021     September 16, 2021   October 14, 2021       $         0.28
May 26, 2021        June 17, 2021        July 8, 2021           $         0.28
February 18, 2021   March 18, 2021       April 8, 2021          $         0.28
November 12, 2020   December 10, 2020    January 7, 2021        $         0.27
August 13, 2020     September 10, 2020   October 8, 2020        $         0.27
May 21, 2020        June 18, 2020        July 16, 2020          $         0.27



It is our policy to make sufficient cash distributions to stockholders in order
for us to maintain our status as a REIT under the Internal Revenue Code of 1986,
as amended, and to efficiently manage corporate income and excise taxes on
undistributed income. However, our Credit Facility limits the amount of
dividends we can pay- see   Note 4   in Item 1 to this Form 10-Q for further
information.

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