Hello, everyone. Thank you for joining us and welcome to the CareTrust 4th Quarter 2025 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Lauren Beal, CareTrust's Chief Accounting Officer. Please go ahead.

Thank you, and welcome to CareTrust REIT's fourth quarter and full year 2025 earnings call. We will make forward-looking statements today based on management's current expectations, including statements regarding future financial performance, dividends, acquisitions, investments, financing plans, business strategies, and growth prospects. These forward-looking statements are subject to risks and uncertainties that could cause actual results to materially differ from our expectations. These risks are discussed in CareTrust REIT's most recent Form 10-K filing with the SEC. We do not undertake a duty to update or revise these statements, except as required by law. During the call, the company will reference non-GAAP metrics such as EBITDA, FFO, and FAD. A reconciliation of these measures to the most comparable GAAP financial measures is available in our earnings press release and Q4 and full-year 2025 non-GAAP reconciliation that are available on the Investor Relations section of CareTrust's website at www.caretrustreate.com. A replay of this call will also be available on the website for a limited period. On the call this morning are Dave Sedgwick, President and Chief Executive Officer, James Collister, Chief Investment Officer, and Derek Bunker, Chief Financial Officer. I'll now turn the call over to Dave Sedgwick, CareTrust's President and CEO. Dave? Thanks, Lauren. Good morning. I want to first

acknowledge our dear friend dollar bill wagner who officially retired a few weeks ago care trust would not be what it is without bill he helped establish a strong foundation on which we are poised for success and our future achievements will be a tribute to his many contributions we wish him well in his much deserved retirement and caution him to take it easy on the oreo cookies and the pizza it's a marathon bill not a sprint all right thank you for joining us as we reflect on the incredible year that was 2025 and our plans to keep the flywheel ripping for years to come. Simply put, 2025 was a transformational year for CareTrust. Starting the year, we were a team of 21 coming off the most active investment year of our history by a factor of five, punctuated by our largest single transaction to that point, which we closed at the end of 2024. Our portfolio consisted predominantly of triple net leased skilled nursing facilities with a handful of net lease senior housing assets and a loan book. In 2024, we had grown the equity market cap 74% to $5.1 billion, but we are never satisfied. So even though the company was running at a record pace, we believed two things. One, we had another gear in us. And two, we needed to do some strategic heavy lifting to position the company to scale for the long term. So we got to work, doubling our team of professionals, adding firepower throughout the organization, and bringing in-house other areas like tax and data science. And we executed, acquiring Care REIT, including their team to enter the UK care home market and closing on our first shop deal after methodically evaluating many opportunities, large and small, along the way. Our collective efforts led to total investments of $1.8 billion, surpassing our record 2024 and supporting our 17.3% year-over-year normalized FFO per share growth. Beyond FFO, we've increased the diversification of our portfolio across geography, asset type, operator, borrower, manager, and payer source, as well as achieving continual improvement in our already strong EBITDA rent coverage. We ended the year having again grown our market cap by 61% to $8.2 billion. I cannot help but take a moment to thank our shareholders, our board, our operators, our capital and strategic partners, and our entire team for their dedication and hard work. We simply could not have produced the 10-year total shareholder return through year-end of approximately 439% without your commitment, professionalism, and sacrifices. I could go on and on about 2025, but really our focus is on 26. The accelerating momentum from 24 to 25 and the resulting growth has only stoked the hunger and motivation everyone at CareTrust feels to make 26 another great year. Today, the skilled nursing operating environment is stable and largely supportive across most states, and the senior housing environment in both the U.S. and U.K. is also stable and gaining strength in many markets. As we hit the ground running in 2026, we do it with a CareTrust team that is deeper and more capable than any time in our history. And we are now running with the two additional growth engines of UK care homes and shop. And yet, the start of this year feels very much like deja vu all over again. What do I mean? What I mean is, like 12 months ago, we're coming off another record year. Our operators continue to set the standard for portfolio lease coverage. We continue to have access to capital and a Fortress balance sheet, and we again have high hopes for a substantial year of external growth. And we still feel the same urgency and hunger to grow long-term shareholder value. And our mission remains the same, to be a unique healthcare REIT that is by operators for operators, making disciplined investments in assets and operators who can change the world of senior housing and care in a big way. With that, I'll turn it over to James. No pressure, my friend.

Thanks, Dave. Good morning, everyone. During the fourth quarter, we completed approximately $562 million of investments, including our first shop deal, which involved three communities in Texas, totaling 270 assisted living and memory care units. We're excited to partner with Sincere Senior Living, who will help manage those communities for us. Fourth quarter investments included about $84 million of loans, with the majority towards the skilled nursing sector, approximately $27 million to acquire two senior housing communities, triple net lease to an established operator, and the remainder comprising the acquisition of 14 skilled nursing facilities across three transactions. Overall, the blended stabilized yield on fourth quarter investments was 8.8%. Since year end, we've closed on another approximately $215 million of investments, including the acquisition of six skilled nursing facilities in the mid-Atlantic at a strong going-in rent coverage leased to a quality operator in a new relationship for Care Trust, and two care homes in the UK net lease to an existing operator. As we look forward, our investment pipeline remains strong, sitting at approximately $500 million. The quoted pipeline is approximately half UK care homes, a third skilled nursing, one small shop deal, and the remainder a combination of loans and senior housing triple net. It includes some singles and doubles, as well as some mid to large size portfolio transactions. Please remember that when we quote our pipe, we only include deals that we have a reasonable level of confidence that we can lock up and close within the next 12 months. And it does not always include larger portfolios that we are reviewing. Our investment pipeline remains robust, supported by a balanced mix of broker transactions and proprietary opportunities generated through established operator relationships and other strategic channels. We continue to see consistent deal flow across all sectors, encompassing triple net and shop structures alongside a steady and meaningful increase in overall transaction activity, particularly within seniors housing and the care home market. We're seeing the most competition in shop where cap rates continue to compress as investors seek more exposure to the sector to benefit from operating trends. Having said that, we're still finding shop opportunities that excite us, and we're benefiting from our strategic push in the UK and through our solid pipeline of skilled nursing deals. Our disciplined underwriting framework, combined with a strong focus on long-term operator partnerships and a commitment to creative, collaborative transaction structuring, will continue to drive sustainable growth across the skilled nursing, senior housing, and UK care home sectors. With that, I'll turn it over to

Derek to review our quarterly financial results. Thanks, James. For the fourth quarter, normalized FFO increased 42.7% over the prior quarter to $104.1 million, and normalized FAD increased 38.7% to $103 million. On a per-share basis, normalized FFO increased $0.07 or 17.5% to $0.47 per share, and normalized FAD increased $0.05 or 12.2% to $0.46 per share. For the full year, normalized FFO per share increased $0.26 or 17.3% to $1.76 per share, and normalized FAD increased $0.22 or 14.3% to $1.76 per share. During the fourth quarter, we sold 6.5 million shares on a forward basis at an average price of $37.30 for gross proceeds of approximately $242.5 million. After year end, we sold another 3.5 million shares on a forward basis for gross proceeds of $129.5 million for a current total of $372 million of gross proceeds pending from unsettled equity forward contracts outstanding under the ATM program. We anticipate using proceeds from these sales to fund our acquisition pipeline. In yesterday's press release, we provided initial guidance for fiscal year 2026 of normalized FFO per share of $1.90 to $1.95 and normalized FAT per share of $1.90 to $1.95, the midpoints of which each represent a year-over-year increase of 9.4%. In addition to the assumptions detailed in our release yesterday, I will note that our guidance does not assume any new investments, dispositions, debt repayments, and debt or equity issuances beyond those announced to date. Since we do not assume additional investments in our guidance, we assume the equity-forward contracts will settle at year-end. Lastly, our liquidity continues to remain strong. In addition to approximately $100 million of cash on hand as of February 11, 2026, we have full capacity available on our $1.2 billion revolver. And despite our record pace of investments, we continue to maintain low leverage with net debt to EBITDA of 0.7 times, net debt to enterprise value of 3.7 percent, and a fixed charge coverage ratio of 10.5 times, each as of year-end. With that, I'll turn it back to Dave.

Thanks, Derek. We hope our report has been helpful to you and thank you for your continued support. We'll be happy to answer your questions at this time.

We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. Please pick up your handset when asking a question. If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Farrell Graneth with Bank of America. Your line is open. Please proceed with your

question. Thank you. And I guess I'll just start it off with your guidance and expectations for the pipeline going forward. I know you've added that there's been some additional competition, at least in the SHOP area, but I'm curious if you can elaborate on the opportunity set on these larger portfolios, specifically in SHOP. Now that you've entered into smaller deals with your recent acquisition, is it seemingly easier to have these conversations? Are you having more inbounds,

especially on these larger portfolios? Yeah. Hey, Pearl, this is James. I mean, I think that the inbounds I think are pretty consistent shop deals are typically pretty heavily marketed so I think you see a pretty wide range of large and small deals that come through I think our view is we want to look at all of it right I think that we want to be able to look at large and small and see the best most risk-adjusted path to get us to a low double digit IRR so I think we look at both. Like I said, they're pretty heavily marketed, even the larger ones. So I think we see just about everything that comes in. And I think brokers have definitely gotten word of our interest in shop. And, you know, I'd be pretty surprised, shocked if a meaningful deal was out

there that hadn't come across our desk. Thank you. And also in your commentary around specifically SNPs, reaching record levels of coverage and now looking forward to 26, I'm curious how sustainable do you think these coverage levels are as well as just framing the current market environment headlines when it comes to Medicare Advantage and how you're just viewing SNFs in the market?

Thanks, Farrell. The skilled nursing environment right now I think is in a really good place. Speaking with our operators very recently, that's the sentiment that we get from them. labor is in a much better place than it has been in recent history the states regulatory reimbursement wise things feel really good and our operators are really anxious to seize the moment and and get back into growth mode so we feel like if you look at our portfolio and you look at the coverage you know our our occupancy is right around 79 80 percent so there's still room quite a bit of upside for our operators as that number increases um to offset you know the inevitable headwinds there's always going to be headwinds in skilled nursing every year there's always something but with great operators and beefy coverage you can at least we can we believe

managed through any of that great thank you very much thanks for your next question comes from the line of west galladay with baird your line is open please go ahead thank you hey everyone you

did make some data analytic hires earlier in the year can you talk about what they're focused on at the beginning are they mainly targeting senior housing operations or is it for more so for the

acquisitions of all segments yeah so the the investment in the data science team right now is prioritized on building out our shop capabilities building out that platform but ultimately that team is going to have an impact across the whole organization making us more efficient making us smarter we're already seeing it and we really like what we see we'll

continue to invest in that department okay thank you thanks Wes your next question comes from the line of Michael Carroll with RBC Capital Markets your line is open please proceed yep thanks uh

James can you provide us some details on the pipeline um right now of that 500 million like what's the breakout between care homes shop and skilled nursing facility deals yeah Mike I would

say of that 500 right now, I think, like I kind of put in the prepared remarks, it's about a half UK care homes right now, about a third, I would say, U.S. skilled nursing, and the rest is a combination of, you know, a shop deal, triple net seniors, and a couple of small loans in there.

I'm sorry, I forgot that you said that. Can you, I know you kind of highlight this earlier, But just on the competitive landscape that you're seeing within this space, I mean, is it any more competitive in specific property types? Like, are you seeing it being more competitive in shops, SNFs, UK care homes, or is it kind of similar across the board?

You know, I would say of the three segments, I think that shop is definitely the most competitive. I think you have the most capital pursuing deals. so I think you see definitely the most interest based on groups wanting to get in on the operating trends but I think that we still feel like there's shop deals out there that really excite us I feel like with our cost of capital we can be really competitive and as we really pour through just about everything that comes in and wanting to look at you know deals that we think can get us through different paths to that low double digit IRR we feel like when we find those deals that really intrigue us despite the competition that we can pounce and go get the deals we really want.

And then if you look at the cap rates for each individual property type, how much do they typically vary? I know that you did about high eights, I guess, in the fourth quarter and to date. Like if you're looking at more UK care homes and shop deals, I mean, should we expect that yield to dip a little bit lower? And just kind of off of that, when you're quoting those cap rates, Do you include the tax leakage on the UK care homes, or do we need to make sure that we think about that when we are putting our numbers out there? I'll defer to Derek. I think we do quote

post-tax, but I mean, the SNF yields are going to be the same that they've been historically. I mean, if it's a really large portfolio deal or with incredible coverage, we might dip, you know, a teeny below what we normally do, but SNF yields are still going to be in the nines. Shop cap rates, Mike, are definitely compressing. So every deal is a little different. There's just a wider band range of cap rates in seniors depending on how old the vintage is the capex needs the location the age all those kinds of things um in the uk i mean it's typically going to be pre-tax mid-eighths to hire uh post-tax mid-seventh to hire i appreciate on the blended deal

we typically we typically do not exclude the impact of withholding tax in the uk when giving

the blended stabilized yield. Okay, your next question comes from the line of Michael Goldsmith with UBS. Your line is open. Please go ahead. Good afternoon. Thanks for taking my question.

You've already done $215 million to start the year. You've got $500 million in the pipelines, so over $700 million. At this point last year, you were at $350 million. You started the call talking about how 25 was a bit of deja vu of 24 with the growth. But I guess just given where you're set up, like, you know, how confident are you that we'll be talking about next year? You know, we'll be talking about deja vu all over again, given the strong growth and investment

opportunities. Oh, I love a crystal ball question, Mike. I'll answer it this way. I think we felt really, really good going into 2025. We felt like the table was set to have another big year. And the difference going into this year is I just feel better about it because now the difference is our team is deeper and more capable. And we have the UK and the shop TAMs to to play in as well so it as long as there's some some meaningful you know chunky type opportunities out there we should be really competitive and we certainly have the potential if those deals materialize to to have another really substantial year. Thanks for that and

and as a follow-up, being a SNF rate and seeing the operational intensity that comes with skilled nursing and dealing with SNF operators, does that give you an advantage as you enter SHAPA? How much different is there in identifying skilled nursing operators versus SHAPA operators? Thanks.

Thanks for that question. We do think that our operating DNA and deep experience is helpful. It certainly informs how we underwrite. It certainly informs how we vet operators and how we asset manage. I think it provides a deeper level across the board. And I think you see that manifested in our lease coverage. That really is a a symbol of choosing the right operators, underwriting the deals properly. And there's a lot that we carry over from betting skilled operators with choosing seniors as well.

Thank you very much. Good luck in 2026.

Thanks a lot.

Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open. Please go ahead.

hi thanks for the time um just curious as you've expanded your opportunity set with the uk care homes and shop um if you look at one uk shopper idea transactions and two if you consider doing development at some point in seniors housing uh recognizing you are larger and can maybe wear the initial dilution i would imagine some of the growing operators are looking to development as a source of opportunities. So just curious on your stance on those two. Great question. I think on

the first, as we look at the UK, the operator relationships that we have right now are eager to grow with us. And they've expressed a desire to continue to do deals with us in a triple net basis. I think that there will be, as you look in the future, there's going to be opportunities probably to apply our shop platform to the UK. So I would never say never on that. And I'd say it's probably more likely than not in years to come. So the second part of your question was development. And I think, yeah, there's going to be, I think what we would like to do there is be the risk to the market instead of being at risk. So right now, generally, you know, it still doesn't pencil to do anything in a significant way here in the United States with respect to development. But there could be certain circumstances, certain opportunities that do. And on a limited basis, for the right operator, for the right location, I think we would take a hard look at that.

Great, thanks. And then you kind of know you've got a new operating partner in the Mid-Atlantic with a recent transaction. uh i'm not sure if you feel comfortable naming that operator or if you could just give us a little caller on that that group and if it was related in any way to the integer transaction that one of your peers announced uh yeah i mean i mean i don't think

we have a problem announcing it they've released their own press releases one so it's the group known as larry h miller group but i don't think they're affiliated with anything else anybody has announced that if you're referencing Sabre, it's not Sabre. Thank you. Thanks Juan. Your next

question comes from the line of Michael Stroyuk with Green Street. Your line is open. Please go

ahead. Thanks and good morning. Can you maybe just talk about your underwriting criteria within SHOP and whether that's changed at all due to the increased competition, either at the property level or just in terms of IRR requirements, or are you just passing on more deals than maybe you would have, call it, three to six months ago? I mean, we've definitely noticed the compression

cap rates. I think that we still look to get an unlevered IRR in the low double digits, and we look at every deal to see what that deal's path is to get us there and what we think the pricing will be. So, I mean, I don't think we just look at it in one box and say, you know, we have to have you know a seven going in and it has to look exactly like this to get us there i think we're going to look at it given the compression in the market in the rate in the cap rates and we're going to look at what's this deal's path to get us to that low double digit and how realistic is it right if it's in lease up if it does or doesn't need capex what its position is in the market what's the revenue versus expense growth look like so i think we look at all of that in the same way we always have I think that we take expected pricing into account for sure and it impacts how we see us getting to that double digit IRR but you know maybe some deals trade a little too expensive to get us there but that's always been the case a little bit so I don't think it's changed much of the underwriting I think it's just changed the path we see us getting to the low double-digit IRR we're looking for.

Got it. Makes sense. Maybe one additional question. Just given pretty minimal leverage today, how are you thinking about funding future external growth? And at what point do you think it would make sense to use some balance sheet capacity instead of equity issuances?

Thanks, Mike. You know, I think more of the same as we've approached over the past year to really just piggybacking off Dave's comments. It feels like we're positioned really well. Capital markets have been favorable. I think as rates have come down, using the balance sheet is a balance between looking at where our equity is trading and a little bit more on the revolver side. And I think there will be a point where we start to carry a little bit there and maybe then look toward kind of the bond market, especially as we fully realize the IG savings that we think we can get but we just feel like we're in a multi-year sort of inflection of getting bigger deals and bigger opportunities and so we want to make sure we've got really full capacity and full availability

whether that's debt or equity thanks for the time your next question from comes with the line of austin werschmidt with key bank capital markets your line is open please go ahead

yeah dave you referenced some of the hiring that you've done this past year and i'm just wondering you know for for any potential larger transactions do you feel like you have the platform and people in place to to digest that or do you think it would come with you know adding additional you know folks to kind of help oversee that effort you know maybe particularly you know within shop which is a little bit of a newer segment for you?

Yeah, I think the answer to that is really going to be relative to the circumstances of the deal, the size of it, the complexity of it, whether or not there's a team or part of a team that would come with it. Those are all things that we throw into the mix to figure out how to get a big deal done. The team here is pound for pound, in my opinion, the best and the most capable to do all sorts of things. But there still are going to be some deals like the UK Care Home acquisition last year, Care REIT, where it came with some really talented people and we decided to keep. So it's all going to be relative to the circumstances of the particular deal.

That's helpful. And then just one on the loan book. I mean, it seems like kind of the competition and the lending markets these days has picked up a little bit. Any risk of, you know, loan prepayments that you foresee or any conversations you're having on that front?

Well, the loan strategy that we put in place a few years ago has wildly exceeded our expectations and helped fuel real growth, real acquisition of real estate that either came with or because of those loans and relationships that we developed. I think as things get more competitive, as banks kind of jump back into the space, those relationships are still very active with us and still looking at off-market opportunities with those relationships. And so I think that's still going to be going forward a really unique and powerful mode of growth for us. Maybe a little bit less than it has been in the past if banks continue to get really aggressive. But we are looking still not included in that pipeline number at some larger deals that are off market with some of these strategic partners of ours. And, you know, if we get some loans paid back, that'll just fuel additional growth because that pipeline continues to reload. Thank you.

Thanks, Austin. There are no further questions at this time. I will now turn the call back to Dave Sedgwick, CEO, for closing remarks. Well, we're really grateful for everybody's interest

and support. If you have follow-ups, you know where to find us. Have a great day.

That concludes today's call. Thank you for attending. You may now disconnect.