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Thank you for standing by. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the Medical Properties Trust Second Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Charles Lambert, Senior Vice President. Please go ahead.

Thank you, and good morning. Welcome to the Medical Properties Trust conference call to discuss our second quarter 2025 financial results. With me today are Edward K. Aldag, Jr., Chairman, President and Chief Executive Officer of the company; Steven Hamner, Executive Vice President and Chief Financial Officer; Kevin Hanna, Senior Vice President, Controller and Chief Accounting Officer; Rosa Hooper, Senior Vice President of Operations and Secretary; and Jason Frey, Managing Director, Asset Management and Underwriting. Our press release was distributed this morning and furnished on Form 8-K with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website at medicalpropertiestrust.com in the Investor Relations section. Additionally, we're hosting a live webcast of today's call, which you can access in that same section. During the course of this call, we will make projections and certain other statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our financial results and future events to differ materially from those expressed in or underlying such forward-looking statements. We refer you to the company's reports filed with the Securities and Exchange Commission for a discussion of the factors that could cause the company's actual results or future events to differ materially from those expressed in this call. The information being provided today is as of this date only and except as required by the federal securities laws, the company does not undertake a duty to update any such information. In addition, during the course of the conference call, we will describe certain non-GAAP financial measures, which should be considered in addition to and not in lieu of comparable GAAP financial measures. Please note that in our press release, Medical Properties Trust has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at medicalpropertiestrust.com for the most directly comparable financial measures and related reconciliations. I will now turn the call over to our Chief Executive Officer, Ed Aldag.

Thank you, Charles, and thanks to all of you for joining us this morning on our second quarter 2025 earnings call. Before you hear from the rest of the team, I'll spend a few minutes discussing the state of the health care market and a few recent strategic updates. In early July, the U.S. Congress passed the One Big Beautiful bill Act, introducing Medicaid funding changes and work requirements for the Affordable Care Act. These changes are expected to be phased in over the next decade to allow ample time for hospital operators to adjust their businesses as necessary. And as providers digest this impact, we expect they will increasingly explore innovative capital solutions, creating greater need for MPT's business model to enhance financial flexibility and operational agility. MPT's objective has always been to offer hospitals permanent capital solutions that facilitate greater focus on patient care. And we are committed to today as ever to doing our part to ensure hospitals can continue serving the communities that they rely on. Shifting to a few important updates from the quarter. As Roger will discuss in detail shortly, our portfolio of new tenants continues to report encouraging performance trends and rental income associated with these facilities is increasing rapidly as planned, whereas in the first quarter of this year, we reported approximately $3.4 million in cash revenue from these properties. That has increased to $11 million this quarter. We expect it to reach approximately $17 million by the third quarter. In fact, 3 of these new operators have already ramped up to fully old monthly contractual amounts. The new operators have done an impressive job to enhance operations, upgrade facilities and attract top doctors and patients, and we look forward to continuing to partner with them moving forward. Turning to our European portfolio. In June, our joint venture with -- in Germany announced a successful EUR 702 million refinancing transaction at a 5.1% fixed rate. Steve will discuss this transaction in more detail as is an important demonstration of investor appetite for high-quality health care infrastructure in Europe and further validation of our ability to access low-cost capital. With steady contributions from our stabilized portfolio and a rapidly ramping portfolio of new operators, we remain confident in our ability to reach total annualized cash rent of more than $1 billion by year-end 2026. Rosa?

Thank you, Ed. Turning now to some highlights from across our diverse portfolio of operators around the world. Overall, our tenants continue to report growing admissions and surgical volumes translating to increasing EBITDARM coverage ratios across asset types year-over-year. I will begin with our international portfolio. Circle remains focused on being the U.K.'s most innovative and technologically advanced hospital provider with significant investments in robotics and AI. Circle's trailing 12-month EBITDARM coverage continued to increase in the second quarter year-over-year. Priory, the largest independent mental health care provider in the U.K. has maintained steady performance with top line growth, driven primarily by increased patient acuity and EBITDARM coverage of around 2.3x. Priory expects that NHS England's recently announced 10-year health plan, which includes commitments for mental health services, will result in a more integrated, inclusive and resilient health system that they are uniquely positioned to support. Shifting to Continental Europe. In Germany, Median has delivered excellent year-over-year improvements in revenue and earnings, driven by strong occupancy trends and increasing reimbursement rates. This performance drove a competitive and successful refinancing that Steve will review in more detail shortly. During the quarter, MPT increased its equity investment in the Infracore joint venture by approximately CHF 50 million, inclusive of a CHF 25 million short-term loan to facilitate the acquisition of a general acute facility in Switzerland and to pay down debt. In June 2025, Aevis, the parent company of Swiss Medical Network held its first Capital Markets Day in the newly opened Genolier Innovation Hub event space. This event highlighted Swiss Medical's stellar performance with 21% year-over-year revenue growth in the first quarter of 2025, driven by significant expansion of its outpatient network and integration of new sites. Turning to the U.S. Earnest Health's EBITDARM coverage increased to 2.3x, sustaining a trend of sequential quarterly increases over the past year as new developments ramp. Legacy IRFs are delivering impressive results with May 2025 trailing 12-month coverage exceeding 2.8x. As discussed in previous quarters, Earnest continues to execute an action plan geared towards becoming more rehab- focused by establishing inpatient rehab units within its LTAC following the success of its first inpatient rehab unit at the Provo LTAC. LifePoint Health again reports strong top line revenue growth driven by increased admissions, particularly at Conemaugh Memorial, where trailing 12-month admissions increased 18% year-over-year. As a result, LifePoint's EBITDARM coverage increased significantly year-over-year. LifePoint Behavioral reported higher admissions growth year-over-year. Surgery Partners delivered another quarter of excellent performance with EBITDARM coverage of approximately 7x. In the South Florida market, HSA reports volume improvement, coupled with successful implementation of several cost-saving initiatives. Discharges for the first 6 months of 2025 are almost 7% higher than the same period in 2024. And successful physician recruitment efforts have led to recoupment of lost surgical volumes, which are outpacing 2024 volumes. In Louisiana, Glenwood's discharges in the first half of 2025 are almost 11% higher than the same period in 2024, and the local team is focused on opening additional beds as the volume demands. And at St. Joseph Hospital in Texas, HSA's effective physician recruitment efforts have resulted in discharges that are back in line with 2024, while surgical volumes are 3% ahead of 2024. HonorHealth in the Phoenix Metro area has been focused on executing its self-funded CapEx strategy and upgrading facilities ahead of anticipated volume recovery. Encouragingly, requests for applications to join the medical staff have been up approximately 20% since HonorHealth took over operations. Quorum Health is now paying 100% of its monthly rent on which they are fully current. In Odessa, admissions and surgical volumes have been stronger than expected. Importantly, the Quorum team is focused on ramping up OB services, including the neonatal intensive care unit, which is a vital service line in the Odessa community. In summary, our transitional portfolio is quickly ramping performance and rent payments as expected, and our other tenants from around the world are delivering consistent performance, driven by healthy volume and cost trends. Put simply, MPT's portfolio is well positioned to continue to generate significant cash flow and create value for shareholders moving forward. Kevin?

Thank you, Rosa. This morning, we reported normalized FFO of $0.14 per share for the second quarter of 2025. The normalized FFO result is notable because the quarter was fully loaded with the incremental quarterly interest related to the $2.5 billion in refinanced debt we completed earlier this year, the cost of which was substantially offset by the substantial increase as scheduled in cash rents from tenants that last year replaced Steward. Similarly, additional unconsolidated interest expense related to our German JV refinancing will fully impact Q3 results. Lower G&A expense also impacted GAAP results, primarily driven by reduced stock compensation expense. This decreased stock compensation expense results from a change in the fair value -- fair market value of 2024 performance-based equity compensation, of which no shares have vested. And to remind you, no shares are even eligible for vesting unless the share value equals at least $7 by December 31, 2027. As is our historical practice, we reversed the impact of this favorable adjustment in our normalized results. We recorded approximately $111 million in net impairments and fair market value adjustments primarily related to our investment in PHP based on the closed sale to Astrana that was previously reported. There were other immaterial adjustments to carrying values, including routine adjustments to marketable securities, that also included in the aggregate of net impairments and fair market value adjustments. The carrying values of certain assets related to Prospect are subject to resolution of matters pending in the Prospect bankruptcy, including whether the court will approve certain changes to the debtor and possession arrangements. To the extent these matters are resolved prior to the company's filing of its 10-Q, the impact of such resolutions may need to be reflected in the 10-Q and may vary possibly materially from the results we present today. I will now hand the call over to Steve to discuss our liquidity and capital strategy moving forward. Steve?

Thank you, Kevin. I just have a couple of points to highlight about our earnings report. First, the hospital real estate, we re-tenanted late last year continues to generate the cash rents as expected. There was virtually no cash rent from those operators in last year's fourth quarter, a little less than $4 million in the first quarter, $11 million during the second quarter, and that is scheduled to continue to increase to $17 million next quarter. Rosa already spoke about the strong operations reported by these tenants, all of which validates the hospital real estate business model in general and our historical underwriting of these facilities in particular. To remind you, beginning in October 2026, we expect to be collecting 100% of fully ramped rent totaling about $160 million on an annualized basis. In fact, as of the start of 2025's third quarter, contracted annualized cash rent represents more than $60 million or almost 40% of the fully ramped up rent, and we have collected all but 3% of July rent as of today. Second, and as Kevin just pointed out, second quarter interest expense is fully loaded for the incremental cost of the $2.5 billion in new secured notes we issued mid-first quarter. But on a quarter-to-quarter basis, the growing rental income substantially offset that incremental interest expense. All else equal, and there is no assurance that all else will remain equal. As we go into the third quarter, the expected further increases in cash rents should more directly drop to the bottom line. Now just a few observations about the balance sheet, all of which are consistent repeats from previous quarters. For the second consecutive quarter, we completed a substantial refinancing transaction, most recently, with the previously announced secured refi of our German joint venture. Two inarguable conclusions are evident. Our assets have not only retained but increased their values. Multiple sophisticated global institutional investors and lenders completed detailed physical and financial diligence, including independent appraisals that resulted in strong value growth in these JV assets. That's consistent with the strong valuations that attracted 7x oversubscription of the $2.5 billion in secured notes in February. Following that February issuance, that had a blended rate of slightly less than 8% and an underwritten to -- very attractive underwritten 65% LTV. This most recent JV refi was executed at a low fixed rate of only 5.1%, a surprise to many analysts, especially in light of the 10-year term. This was a competitive process with an outcome that continues to demonstrate the depth of the global market for well underwritten hospital real estate, proving that MPT has multiple avenues for access to affordable capital. The $30 million sale in the second quarter of a stand-alone LTAC at an amount close to our original investment, along with a handful of additional transactions we expect in the near future, aggregating more than $100 million are priced at amounts near or in excess of our basis, continuing to demonstrate the resilience of our underwriting and maintaining the values of hospital real estate. These pending sales are all subject to binding contracts, one which we expect will benefit our prospect recovery waterfall. Finally, virtually every major decision we have made over the last year has been based on increasing our financial flexibility as we consider further balance sheet options. These are decisions to sell assets, retenant valuable hospital real estate with carefully attenuated cash rental schedules that are performing and paying as expected, refinancing debt, taking the dilution associated with early redemption of lower rate debt as we satisfy all near-term maturities and extending our maturity horizon to give us a long runway for execution of operational strategies that will build equity value. So today, we retain the optionality that execution of these strategies has provided us. We are not pressed for time as we continue to execute, and this quarter's growth in contractual cash rents is demonstrative of that execution. We retain all the options that we have described in earlier quarters. We have valuable hospital real estate that is available for monetization. This may include joint venture capital. We have clearly demonstrated the opportunities for further debt refinancing. And as we continue to execute and grow earnings, we look forward to further reduction in our cost of capital, leading to increases in our equity valuations. We will continue to evaluate the best approach and use of these options at the appropriate time. And with that, I'll turn the call back to the operator to queue any questions. John?

[Operator Instructions] Your first question comes from the line of Michael Carroll with RBC Capital Markets.

Can you guys provide some color on HSA's performance? And how confident are you that rent ramp will occur as expected? I guess, when -- or have they already started paying cash rents? I guess, when does that specifically commence in your lease agreement with them?

So Mike, you must have missed the early part of the call. Rosa went over in great detail, the improvements that they've made in all of the hospitals that they've taken over, and they have been paying rent and they're current on their rent now.

And are you still confident that they can -- that can ramp up as written in lease?

Yes. We are very impressed with what they've done with the hospitals, the way they brought doctors that were previously operating at Steward that left during the bankruptcy have come back, and we believe they're doing a good job.

Okay. And then, Ed, I guess, in the bankruptcy filings with Steward, there was a claim from a lender that HSA was in default on a loan I mean it sounds like that issue was resolved. I mean are they still in default on that loan? Or can you kind of describe HSA's credit and if they're on default on any other issues outside of MPW?

So Mike, that was well described in the various court filings. Just to remind you, when they took over from Steward September 11, Steward had not paid into the supplemental payment for Florida. There was approximately $28-some-odd million that was due and a $55 million payment that would then come from the state of Florida. HSA chose to borrow that money from a lender and pay that money into the state of Florida. And it took the state of Florida longer to repay that because the Steward -- the people that were running Steward, post the bankruptcy or post filing bankruptcy decided to file a claim on that money even though they hadn't paid any of the supplemental payment taxes for that. And you're right that, has been resolved and that lender has been mostly paid back. I believe there's a small amount of money still outstanding from both the state and then from HSA to that lender. And nothing to do with operations.

Okay. Great. No, I appreciate that. And then just lastly for me, and I know that you guys discussed this a little bit on the prepared remarks, but can you talk a little bit about the Prospect recovery process? I know the PHP proceeds were lower than expected. Is that -- was that impaired in your financial statements in the other bucket? And I guess, can you talk about like how -- what's the time line of the expectations of if MPW could collect anything in addition to, I guess, those PHP loans kind of in the Prospect bankruptcy case?

So Mike, again, if you follow through the bankruptcy of this particular entity, we reached a global settlement with them, I believe it was January of this year, January, February, something along those lines that has a waterfall. So everything goes into a bucket and then flows out. The PHP process, I think Astrana paid something in the neighborhood of $700-plus million. Vast majority of that ended up going to repay debt and legal fees and consulting fees. And so that's why the small amount flowed through to MPT. We believe that the stalking horses for both Connecticut and California will be announced fairly soon. And then we believe that shortly thereafter, the auction will take place, and we will move forward with closing on these properties. Still a lot of interest, particularly in the California properties.

Your next question comes from the line of Michael Mueller with JPMorgan.

I jumped on late, too. So I have a feeling a lot of what I was going to ask has already been covered. But just in terms of the asset sales that you mentioned, I think you mentioned about $100 million. Is that still expected to close this year? Can you talk a little bit about the, I guess, the product type and geographies? And then as a follow-up on the -- I guess, the Swiss investment. I guess, what's the thought process there in terms of deciding to allocate new capital for investment as opposed to sitting on the sidelines?

So Mike, on the properties that we expect to close on the sale, they do expect to close before year-end. And they are essentially either leftover Steward properties or other orphan type properties. On the Swiss Medical, as we have stated previously, one of the avenues that we've been trying to explore a long time with Swiss Medical and Infracore is to get inroads into the public hospitals. This was an opportunity, we believe, for Infracore to make a strong inroad into that market to allow them other avenues for buying properties outside of the private sector and into that public sector. It's a relatively small investment, and we think strategically, it was the right thing to do.

Your next question comes from the line of John Kilichowski with Wells Fargo.

A question for me on just the legacy Steward asset ramp-up here. Just based on the update that you've given us and the expected $17 million in 3Q, are you still on pace to hit that [ $160 ] million annualized run rate by October '26? Or do you think you're running ahead at this point?

Well, I think the operators are running ahead, whether any of them will agree to ramp up their rent from their required portion, I kind of doubt it. But clearly, the operations is ahead where we thought it would be.

Got it. And then you increased the -- your equity investment in for core in the quarter. Could you elaborate on the strategic rationale and the expected return profile?

Yes. That was primarily done to pay off debt in Infracore. It had debt that was coming due, and we thought it was a good return on our investment for InfoCore.

Your next question comes from the line of Omotayo Okusanya with Deutsche Bank.

Steve, I just wanted to confirm, I think, a point you made earlier on with Prospect. The California asset, you talked about a stalking horse on that. Is that going to be sold? I thought there was an opportunity to possibly retenant it instead.

Tayo, you broke up there at the end, but I think you're asking about the potential stalking horse on the California properties. There are people that are -- they are looking -- there are people that are looking to lease the facilities and entities that are looking to purchase the facilities. And I think within the next couple of weeks or so, the stalking horse will be made public and then we'll go to an auction.

Okay. That's helpful. And then, Ed, I appreciate the comments you made earlier on about the changes to ACA and Medicaid expansion and kind of what you thought some of your operators would have to do -- operators in general would have to do in anticipation of that. Can you just talk to me a little bit about, again, when you talk to your operators, kind of how they are gearing up for that to ultimately happen once some of those changes start to happen in 2028? Like what are the key things that really have to get right over the next 2 to 3 years?

Tayo, if you look at the bill and all the things that are in it, we -- none of us will know what exactly comes from it until we've had a few years to see what comes from it. And what I mean by that is the intent for the bill is to get people off of Medicaid and back into the workforce -- sorry, guys, somebody hit the mute button. One of the things that we won't know is how many of those people that get back into the workforce that are getting off Medicaid, go into an entity that allows them commercial insurance. If that's the case, then our operators would actually see an increase in their revenue. If you ask our operators, most of them are not -- no one having a heart attack about it. Most of them believe that there will be some places that there are improvements to their revenue because of those changes. But the bottom line is that nobody will know for sure for a number of years to come.

Got you. That's helpful. And then last one for Steve. The balance on the line of credit and also the cash balance kind of remains elevated. I know in 1Q you were kind of trying to manage around some uncertainty around write-offs and things like that associated with Prospect. Just kind of curious with that kind of behind you now that you've kind of taken this additional write-offs of $113 million or $130 million or so this quarter, why you still kind of -- why that's still elevated and if we can expect some payoff of the line with the large cash balance going forward?

Yes, you're right, Tayo. It's the same explanation as in the first quarter, albeit significantly lower. Going into the end of the quarter, which is obviously the key date here in an abundance of caution, we simply build up the cash balance. That was repaid less than 24 hours later. Whether that will be the case at the end of the next quarter, I don't know, we'll continue to evaluate and make sure that there's no foot fault on our covenants.

Got it. So July, you already paid it down already in July.

That's right.

Your next question comes from the line of Farrell Granath with Bank of America.

I was hoping that you could add a little bit more color on the CMS proposed elimination of the inpatient-only list. I know you just made some comments about the Big Beautiful Bill, but I was curious if there's been any conversations on that, how that would impact the operations on your tenant level?

So Farrell, your volume was so low. We couldn't hear the first part of your question. We heard the last part. I went back up, can you repeat that, if you don't mind?

Yes. Sorry about that. But I was curious if you could add a little color around the CMS proposed elimination of the inpatient-only list and how that may impact the operations on the tenant level.

Yes. Farrell, I think what you're referring to is that it just goes from an inpatient to an outpatient and none of our operators have expressed any concern over that.

Okay. And also a little bit more color. I know you mentioned there was about 3% of rent not collected. And I think there was also a note of in the press release on the $500,000 in rent related to 2 facilities. If you could just give a little bit more color.

Sure. It's the facilities in Ohio and the facility in Pennsylvania. I believe everybody is probably familiar with what's going on in Ohio. We had -- we -- the operator there had an issue with Steward and Steward not paying over the amount of revenue that they had generated. That is still an ongoing issue for them. They hope to be operational again by the end of next month. We'll see if it is or not. And then the other one is in Sharon, Pennsylvania, another very small facility. It actually is operating well under the circumstances. It's just been a slow process for them.

Your next question comes from the line of Vikram Malhotra with Mizuho.

This is Georgi on for Vikram. And my apologies if I missed that, I just joined a little bit later. But have you provided any additional loans to the HSA? And does the HSA EBITDA cover the cash rent they're paying right now?

The answer is yes and no. We did loan an additional $5 million in May. That was, again, part of the issues that where they were having -- very public issues that they were having with Steward and their TSA agreement. Those have been resolved and they are not covering full cash rent at this point.

And just one more for me. Just on the one tenant that is below 1 coverage. I think those are the Columbia assets. What's the latest there? Any update on where do you see coverage trending? And are you -- is that like a potential risk you're monitoring?

So interestingly, those hospitals are performing exceptionally well. They are extremely full. The problem is they aren't being reimbursed from the system down there. It's not just our hospitals, it's countrywide. So hopefully, it will be resolved over the next 6 months, but the administration, the new election is in May of 2026. And we certainly believe it will be resolved by that point. But it's not an issue of whether or not the facilities are generating the revenue. They just aren't collecting the cash.

I will now turn the call back over to Ed Aldag for closing remarks.

John, thank you very much, and thank all of you again. I believe most of you probably know that Tim Berryman retired this past quarter. So this is our first earnings call in a very long time without Tim. We wish him the very, very best. And if you have any questions, please don't hesitate to call Drew.