Physicians Realty Trust DOC · USD

Segment DisclosuresThe Company’s operating segments, based on how its chief operating decision maker (“CODM”), the President and CEO, evaluates the business and allocates resources, are as follows: (i) outpatient medical, (ii) lab, (iii) senior housing, (iv) loans receivable, (v) a preferred equity investment, and (vi) three other properties. The Company’s reportable segments, as determined in accordance with ASC 280, Segment Reporting, are as follows: (i) outpatient medical, (ii) lab, and (iii) senior housing. The loans receivable, preferred equity investment, and three other properties are non-reportable segments that have been presented on a combined basis within the Notes to the Consolidated Financial Statements herein. The accounting policies of the segments are the same as those described in the Company’s Summary of Significant Accounting Policies (see Note 2).During the fourth quarter of 2025, in connection with the planned Offering of Janus Living and various other strategic initiatives, the Company’s CODM began evaluating the Company’s life plan communities and the SWF SH JV as a single operating and reportable segment, referred to as senior housing. Also during the fourth quarter of 2025, two other properties were reclassified from the outpatient medical segment to the other non-reportable segments as these properties are not representative of the characteristics of the outpatient medical segment and therefore, are no longer evaluated by the CODM in conjunction with the remaining outpatient medical properties. Also included in other non-reportable segments as of December 31, 2025 is one other property that was acquired as part of the Gateway Crossing acquisition. Accordingly, all prior period segment information has been recast to conform to the current period presentation.The CODM evaluates performance based on property Adjusted NOI. Adjusted NOI is used to evaluate performance because it provides relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and presenting it on an unlevered basis. Adjusted NOI represents real estate revenues (inclusive of rental and related revenues, resident fees and services, and government grant income and exclusive of interest income), less property level operating expenses; Adjusted NOI excludes all other financial statement amounts included in net income (loss).

Deferred RevenueThe following table summarizes the Company’s deferred revenue, excluding deferred revenue related to assets classified as held for sale (in thousands):December 31,20252024Non-refundable entrance fees(1)$669,528 $615,723 Other deferred revenue(2)315,779 324,413 Deferred revenue$985,307 $940,136 _______________________________________(1)During the years ended December 31, 2025 and 2024, the Company collected non-refundable entrance fees of $153 million and $143 million, respectively. During the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization of $99 million, $89 million, and $83 million, respectively, which is included within resident fees and services on the Consolidated Statements of Operations.(2)Other deferred revenue is primarily comprised of prepaid rent, deferred rent, and tenant-funded tenant improvements owned by the Company. During the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization related to other deferred revenue of $48 million, $53 million, and $68 million, respectively, which is included in rental and related revenues on the Consolidated Statements of Operations.

Commitments and ContingenciesLegal ProceedingsFrom time to time, the Company is a party to legal proceedings, lawsuits and other claims that arise in the ordinary course of the Company’s business. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s financial condition, results of operations, or cash flows. The Company’s policy is to expense legal costs as they are incurred. DownREITs and Other PartnershipsIn connection with the formation of DownREITs, members may contribute appreciated real estate to a DownREIT in exchange for DownREIT units. These contributions are generally tax-deferred, so that the pre-contribution gain related to the property is not taxed to the member. However, if a contributed property is later sold by the DownREIT, the unamortized pre-contribution gain that exists at the date of sale is specifically allocated and taxed to the contributing members. In many of the DownREITs, the Company has entered into indemnification agreements with those members who contributed appreciated property into the DownREIT. Under these indemnification agreements, if any of the appreciated real estate contributed by the members is sold by the DownREIT in a taxable transaction within a specified number of years, the Company will reimburse the affected members for the federal and state income taxes associated with the pre-contribution gain that is specially allocated to the affected member under the Internal Revenue Code (“make-whole payments”). These make-whole payments include a tax gross-up provision. As of December 31, 2025, the Company had indemnification agreements on a total of 28 properties within its DownREITs. Additionally, the Company owns a 49% interest in the Lab JV (see Note 9). If the property in the joint venture is sold in a taxable transaction, the Company is generally obligated to indemnify its joint venture partner for its federal and state income taxes associated with the gain that existed at the time of the contribution to the joint venture.

DebtHealthpeak OP, the Company’s consolidated operating subsidiary, is the borrower under, and the Company, DOC DR Holdco, and DOC DR OP Sub are the guarantors of, the Revolving Facility, 2027 Term Loans, 2029 Term Loan, Commercial Paper Program (each as defined below), and senior unsecured notes issued by the Company. DOC DR OP Sub is the borrower under, and the Company, Healthpeak OP, and DOC DR Holdco are guarantors of, the 2028 Term Loan (as defined below) and senior unsecured notes issued by the Physicians Partnership prior to, and assumed by the Company as part of, the Merger. Guarantees of senior unsecured notes are full and unconditional and applicable to existing and future senior unsecured notes.The MergerOn March 1, 2024, upon the consummation of the Merger, the Company assumed senior unsecured term loans in an aggregate principal amount of $400 million (the “2028 Term Loan”) that mature in May 2028 (see Note 3) pursuant to an amendment to a term loan agreement originally executed by the Physicians Partnership, as borrower, and the other parties thereto. In connection with the assumption of the 2028 Term Loan, the Company acquired three related interest rate swap instruments that were redesignated as cash flow hedges as of the Closing Date. The 2028 Term Loan associated with these interest rate swap instruments is reported as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instruments. Based on DOC DR OP Sub’s credit ratings as of December 31, 2025, the 2028 Term Loan had a blended fixed effective interest rate of 4.44%, inclusive of the impact of these interest rate swap instruments and amortization of the related premium. See also Note 22 for a discussion of the impact of the related interest rate swap instruments.Loans outstanding under the 2028 Term Loan bear interest at an annual rate equal to (i) the applicable margin, plus (ii) Daily SOFR. In October 2025, the Company executed an amendment to the 2028 Term Loan to remove a 10 basis point adjustment related to SOFR transition from the determination of the margin. The applicable margin under the 2028 Term Loan ranges from 0.85% to 1.65% for Daily SOFR loans and is based on the Company’s and Healthpeak OP’s credit ratings. Based on the Company’s credit ratings as of December 31, 2025, the margin on the 2028 Term Loan was 0.90%.

Income TaxesThe Company has elected to be taxed as a REIT under the applicable provisions of the Code beginning with the year ended December 31, 1985. The Company has also elected for certain of its subsidiaries to be treated as TRSs (the “TRS entities”), which are subject to federal and state income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this Note 17. Certain REIT entities are also subject to state and local income taxes.Distributions with respect to the Company’s common stock can be characterized for federal income tax purposes as ordinary dividends, capital gains, nondividend distributions, or a combination thereof.The following table shows the characterization of the Company’s annual common stock distributions per share:Year Ended December 31,202520242023Ordinary dividends(1)$0.848632 $0.720440 $0.909692 Capital gains(2)(3)0.051744 0.295060 0.116992 Nondividend distributions0.319654 0.184500 0.173316 $1.220030 $1.200000 $1.200000 _______________________________________(1)For the year ended December 31, 2025, the amount includes $0.782764 of ordinary dividends qualified as business income for purposes of Code Section 199A and $0.065868 of qualified dividend income for purposes of Code Section 1(h)(11). For the year ended December 31, 2024, all $0.720440 of ordinary dividends qualified as business income for purposes of Code Section 199A. For the year ended December 31, 2023, the amount includes $0.882312 of ordinary dividends qualified as business income for purposes of Code Section 199A and $0.027380 of qualified dividend income for purposes of Code Section 1(h)(11). (2)For the years ended December 31, 2025, 2024, and 2023, the amount includes $0.047796, $0.215960, and $0.036256, respectively, of unrecaptured Code Section 1250 gain. Pursuant to Treasury Regulation Section 1.1061-6(c), the Company is disclosing additional information related to the capital gain dividends for purposes of Section 1061 of the Code. Code Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.” For each of the years ended December 31, 2025, 2024 and 2023, the “One Year Amounts” and “Three Year Amounts” are each zero, since all capital gains relate to Code Section 1231 gains. (3)For each of the years ended December 31, 2025, 2024, and 2023, 100% of the capital gain distributions represent gains from dispositions of U.S.

LeasesLease IncomeThe following table summarizes the Company’s lease income (in thousands): Year Ended December 31, 202520242023Fixed income from operating leases$1,565,590 $1,530,493 $1,236,502 Variable income from operating leases591,153 556,703 395,303 Operating LeasesFuture Minimum RentsThe following table summarizes future minimum lease payments to be received from tenants under non-cancelable operating leases as of December 31, 2025 (in thousands):YearAmount2026$1,429,141 20271,374,492 20281,272,129 20291,149,355 2030986,141 Thereafter3,597,746 $9,809,004 Tenant Purchase OptionsCertain leases contain purchase options whereby the tenant may elect to acquire the underlying real estate. Annualized base rent from leases subject to purchase options, summarized by the year the purchase options are exercisable, excluding leases related to assets classified as held for sale, are as follows (dollars in thousands):YearAnnualizedBase Rent(1)Number ofProperties2026$13,324 8 202714,185 8 202819,404 6 20296,466 7 2030— — Thereafter28,495 10 $81,874 39 _______________________________________(1)Represents the most recent month’s base rent including additional rent floors annualized for 12 months. Base rent does not include tenant recoveries, additional rents in excess of floors, and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).Lease CostsThe following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases (dollars in thousands):Year Ended December 31,Lease Expense Information:202520242023Total lease expense$23,168 $22,768 $17,010 Weighted Average Lease Term and Discount Rate:December 31,2025December 31,2024Weighted average remaining lease term (years):Operating leases(1)4748Weighted average discount rate:Operating leases4.86 %4.79 %_______________________________________(1)As of December 31, 2025 and 2024, the weighted average remaining lease term including the Company’s options to extend its operating leases was 64 years and 66 years, respectively.

Cybersecurity Risk Management and StrategyIn our business operations, we use information technology, enterprise applications, communications tools, cloud network solutions, and related systems to manage our operations, including to manage our building systems, tenant and vendor relationships, accounting and recordkeeping, and communications, among other aspects of our business. We have developed and implemented a cybersecurity risk management program intended to protect our properties, confidential and proprietary data, and information technology and systems, from cybersecurity threats, including unauthorized access or attack. We leverage the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to the business. This does not imply that we meet any particular technical standards, specifications, or requirements.Our processes for assessing, identifying, and managing risks from cybersecurity threats, including operational risks, financial reporting risks, reputational risks, personal data theft, fraud, and other potential risks, are integrated into our overall enterprise risk management process, and share common methodologies, reporting channels, and governance processes that apply across the enterprise risk management process to other legal, compliance, strategic, operational, and financial risk areas.

DOCUMENTS INCORPORATED BY REFERENCEPortions of the definitive Proxy Statement for the registrant’s 2026 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2025, have been incorporated by reference into Part III of this Report.