8-K
CareTrust REIT, Inc. (CTRE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2023
CareTrust REIT, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 001-36181 | 46-3999490 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
Registrant’s telephone number, including area code: (949) 542-3130
| 905 Calle Amanecer, Suite 300, San Clemente, CA | 92673 |
|---|---|
| (Address of principal executive offices) | (Zip Code) |
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | CTRE | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 3, 2023, CareTrust REIT, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.
Item 7.01 Regulation FD Disclosure.
A copy of the Company’s supplemental financial information for the second quarter ended June 30, 2023 is attached hereto as Exhibit 99.2 and is incorporated herein by reference. A copy of the supplemental financial information is also available on the “Investors” section of the Company’s website at www.caretrustreit.com.
Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
|---|---|
| Exhibits | Description |
| --- | --- |
| 99.1 | Press Release of the Company, dated August 3, 2023 |
| 99.2 | Supplemental financial information for the quarter ended June 30, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 3, 2023 | CARETRUST REIT, INC. | |
|---|---|---|
| By: | /s/ William M. Wagner | |
| William M. Wagner | ||
| Chief Financial Officer and Treasurer |
Document
Exhibit 99.1
CareTrust REIT Announces Second Quarter 2023 Operating Results
Conference Call Scheduled for Friday, August 4, 2023 at 1:00 pm ET
SAN CLEMENTE, Calif., August 3, 2023 (BUSINESS WIRE) -- CareTrust REIT, Inc. (NYSE:CTRE) today reported operating results for the quarter ended June 30, 2023, as well as other recent events.
For the quarter, CareTrust REIT reported:
•96.7% of contractual rents collected;
•Net loss of $0.5 million and net loss per share of $0.01;
•Normalized FFO of $34.6 million and normalized FFO per share of $0.35;
•Normalized FAD of $36.1 million and normalized FAD per share of $0.36;
•A quarterly dividend of $0.28 per share, representing a payout ratio of approximately 78% on normalized FAD;
•Acquired 12 properties for $173.5 million;
•Commenced six new operator relationships;
•Originated a $26.0 million loan investment; and
•Sold 6.7 million shares on a forward basis under its ATM Program for expected net proceeds of $131.1 million
CareTrust’s President and Chief Executive Officer, Dave Sedgwick, expressed enthusiasm for the Company’s performance in the second quarter. “We are pleased to not only report $173 million of new investments and six new operator relationships but also to report that we have largely funded those investments with equity via ATM forward contracts.” Mr. Sedgwick continued, “We have announced new investments every month since March and yet we sit here today with ample dry powder to continue to grow the portfolio. The investment pipeline today is roughly $150 million and is composed mostly of skilled nursing acquisitions.”
The Company gave an update on its portfolio management initiatives. Mr. Sedgwick said, “As of today, from last year’s announced disposition plan, three facilities remain on the market. Two of those are under contract to sell in the coming months pending the standard diligence and licensing process. The third facility is under a Letter of Intent.” With regards to the delinquent operator that accounts for approximately $5 million of annual contractual rent, the Company has classified those assets as held-for-sale, removed the properties from its lease coverage report in the quarterly supplemental, and is currently negotiating a sale of the properties. The Company recognized $0.4 million of rent from this operator in the quarter and reports receiving $0.3 million in July.
Turning to the portfolio performance in the quarter, the Company's reported EBITDARM and EBITDAR lease coverage, excluding Provider Relief Funds, improved to 2.70x and 2.13x, respectively. Based on preliminary operator reports, June 2023 occupancy (excluding properties held for sale) increased slightly to 76.2% from 76.0% in March 2023 for skilled nursing and seniors housing held steady at 74.9% in March and June 2023.
Financial Results for Quarter Ended June 30, 2023
Chief Financial Officer, Bill Wagner, reported that, for the second quarter, CareTrust reported net loss of $0.5 million, or $0.01 per diluted weighted-average common share, normalized FFO of $34.6 million, or $0.35 per diluted weighted-average common share, and normalized FAD of $36.1 million, or $0.36 per diluted weighted-average common share.
Liquidity
As of quarter end, CareTrust reported net debt-to-annualized normalized run rate EBITDA of 3.8x, which is below the Company's target leverage range of 4.0x to 5.0x, and a net debt-to-enterprise value of approximately 26.2%. Mr. Wagner stated that, as of today, the Company has approximately $310 million outstanding on its $600 million revolving credit line, with no scheduled debt maturities prior to 2026. He also disclosed that CareTrust currently has approximately $12 million in cash on hand. He further noted that the Company had $367.2 million and $290.7 million in available authorization remaining on its at-the-market equity program as of June 30, 2023 and August 3, 2023, respectively. During the three months ended June 30, 2023, the Company executed sales under its ATM Program with a financial institution acting as a forward purchaser to sell 6,736,089 shares of common stock at a weighted average sales price of $19.71 per share before commissions and offering expenses. In July 2023, the Company executed sales under its forward ATM Program to sell 3,839,348 shares of common stock at a weighted average sales price of $19.94 per share before commissions and offering expenses. "With substantial availability on our revolver, and equity markets readily accessible to us at present, we continue to have a wide range of capital options for funding our opportunistic growth strategy," said Mr. Wagner.
Dividend Maintained
During the quarter, CareTrust declared a quarterly dividend of $0.28 per common share. On an annualized basis, the payout ratio was approximately 80% based on second quarter 2023 normalized FFO, and 78% based on normalized FAD.
Conference Call
A conference call will be held on Friday, August 4, 2023, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time), during which CareTrust’s management will discuss second quarter results, recent developments and other matters. The toll-free dial-in number is 1 (888) 510-2379 or toll dial-in number is 1 (646) 960-0691 and the conference ID number is 6808360. To listen to the call online, or to view any financial or other statistical information required by SEC Regulation G, please visit the Investors section of the CareTrust REIT website at http://investor.caretrustreit.com. This call will be recorded, and will be available for replay via the website for 30 days following the call.
About CareTrustTM
CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States. More information about CareTrust REIT is available at www.caretrustreit.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains, and the related conference call will include, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding the following: future financial and financing plans; strategies related to the Company's business and its portfolio, including acquisition opportunities and disposition plans; growth prospects; operating and financial performance; expectations regarding the making of distributions and payment of dividends; and the performance of the Company’s tenants and operators and their respective facilities.
Words such as “anticipate,” “believe,” “could,” “expect,” “estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,” “would,” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. The Company’s forward-looking statements are based on management’s current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although the Company believes that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and the Company can give no assurance that its expectations will be attained. Factors which could have a material adverse effect on the Company’s operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) the impact of possible additional surges of COVID-19 infections or the risk of other pandemics, epidemics or infectious disease outbreaks, measures taken to prevent the spread of such outbreaks and the related impact on our business or the businesses of our tenants; (ii) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iv) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (v) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vi) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (viii) access to debt and equity capital markets; (ix) fluctuating interest rates and inflation; (x) the ability to retain our key management personnel; (xi) the ability to maintain our status as a real estate investment trust (“REIT”); (xii) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xiii) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xiv) additional factors included in our Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Reports on Form 10-Q for the quarter ended March 31, 2023 and June 30, 2023, including in the sections entitled “Risk Factors” in Item 1A of such reports, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC.
This press release and the related conference call provides information about the Company's financial results as of and for the quarter ended June 30, 2023 and is provided as of the date hereof, unless specifically stated otherwise. The Company expressly disclaims any obligation to update or revise any information in this press release or the related conference call (and replays thereof), including forward-looking statements, whether to reflect any change in the Company’s expectations, any change in events, conditions or circumstances, or otherwise.
As used in this press release or the related conference call, unless the context requires otherwise, references to “CTRE,” "CareTrust," “CareTrust REIT” or the “Company” refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America.
Contact:
CareTrust REIT, Inc.
(949) 542-3130
ir@caretrustreit.com
| CARETRUST REIT, INC. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||
| Revenues: | ||||||||||
| Rental income | $ | 47,745 | $ | 46,806 | $ | 93,908 | $ | 92,813 | ||
| Interest and other income | 3,808 | 747 | 8,251 | 1,216 | ||||||
| Total revenues | 51,553 | 47,553 | 102,159 | 94,029 | ||||||
| Expenses: | ||||||||||
| Depreciation and amortization | 12,716 | 12,559 | 24,954 | 26,134 | ||||||
| Interest expense | 11,040 | 6,303 | 20,867 | 12,045 | ||||||
| Property taxes | 1,390 | 1,254 | 2,270 | 2,674 | ||||||
| Impairment of real estate investments | 21,392 | 1,701 | 23,278 | 61,384 | ||||||
| Provision for loan losses, net | — | — | — | 3,844 | ||||||
| Property operating expenses | 658 | 89 | 1,621 | 536 | ||||||
| General and administrative | 4,718 | 4,978 | 9,779 | 10,193 | ||||||
| Total expenses | 51,914 | 26,884 | 82,769 | 116,810 | ||||||
| Other (loss) income: | ||||||||||
| Gain on sale of real estate, net | 2,028 | — | 1,958 | 186 | ||||||
| Unrealized losses on other real estate related investments, net | (2,151) | — | (2,605) | — | ||||||
| Total other (loss) income | (123) | — | (647) | 186 | ||||||
| Net (loss) income | $ | (484) | $ | 20,669 | $ | 18,743 | $ | (22,595) | ||
| (Loss) earnings per common share: | ||||||||||
| Basic | $ | (0.01) | $ | 0.21 | $ | 0.19 | $ | (0.24) | ||
| Diluted | $ | (0.01) | $ | 0.21 | $ | 0.19 | $ | (0.24) | ||
| Weighted-average number of common shares: | ||||||||||
| Basic | 99,117 | 96,564 | 99,090 | 96,487 | ||||||
| Diluted | 99,117 | 96,598 | 99,194 | 96,487 | ||||||
| Dividends declared per common share | $ | 0.28 | $ | 0.275 | $ | 0.56 | $ | 0.55 | ||
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| RECONCILIATIONS OF NET (LOSS) INCOME TO NON-GAAP FINANCIAL MEASURES | ||||||||||
| (in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||
| Net (loss) income | $ | (484) | $ | 20,669 | $ | 18,743 | $ | (22,595) | ||
| Depreciation and amortization | 12,716 | 12,559 | 24,954 | 26,134 | ||||||
| Interest expense | 11,040 | 6,303 | 20,867 | 12,045 | ||||||
| Amortization of stock-based compensation | 924 | 1,394 | 1,860 | 2,915 | ||||||
| EBITDA | 24,196 | 40,925 | 66,424 | 18,499 | ||||||
| Impairment of real estate investments | 21,392 | 1,701 | 23,278 | 61,384 | ||||||
| Provision for loan losses, net | — | — | — | 3,844 | ||||||
| Provision for doubtful accounts and lease restructuring | — | — | — | 977 | ||||||
| Property operating expenses | 831 | 631 | 1,965 | 1,862 | ||||||
| Gain on sale of real estate, net | (2,028) | — | (1,958) | (186) | ||||||
| Unrealized losses on other real estate related investments, net | 2,151 | — | 2,605 | — | ||||||
| Normalized EBITDA | $ | 46,542 | $ | 43,257 | $ | 92,314 | $ | 86,380 | ||
| Net (loss) income | $ | (484) | $ | 20,669 | $ | 18,743 | $ | (22,595) | ||
| Real estate related depreciation and amortization | 12,712 | 12,553 | 24,945 | 26,124 | ||||||
| Impairment of real estate investments | 21,392 | 1,701 | 23,278 | 61,384 | ||||||
| Gain on sale of real estate, net | (2,028) | — | (1,958) | (186) | ||||||
| Funds from Operations (FFO) | 31,592 | 34,923 | 65,008 | 64,727 | ||||||
| Provision for loan losses, net | — | — | — | 3,844 | ||||||
| Provision for doubtful accounts and lease restructuring | — | — | — | 977 | ||||||
| Property operating expenses | 831 | 631 | 1,965 | 1,862 | ||||||
| Unrealized losses on other real estate related investments, net | 2,151 | — | 2,605 | — | ||||||
| Normalized FFO | $ | 34,574 | $ | 35,554 | $ | 69,578 | $ | 71,410 | ||
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| RECONCILIATIONS OF NET (LOSS) INCOME TO NON-GAAP FINANCIAL MEASURES (continued) | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||
| Net (loss) income | $ | (484) | $ | 20,669 | $ | 18,743 | $ | (22,595) | ||
| Real estate related depreciation and amortization | 12,712 | 12,553 | 24,945 | 26,124 | ||||||
| Amortization of deferred financing fees | 608 | 520 | 1,217 | 1,040 | ||||||
| Amortization of stock-based compensation | 924 | 1,394 | 1,860 | 2,915 | ||||||
| Straight-line rental income | 7 | (5) | 14 | (11) | ||||||
| Impairment of real estate investments | 21,392 | 1,701 | 23,278 | 61,384 | ||||||
| Gain on sale of real estate, net | (2,028) | — | (1,958) | (186) | ||||||
| Funds Available for Distribution (FAD) | 33,131 | 36,832 | 68,099 | 68,671 | ||||||
| Provision for loan losses, net | — | — | — | 3,844 | ||||||
| Provision for doubtful accounts and lease restructuring | — | — | — | 977 | ||||||
| Property operating expenses | 831 | 631 | 1,965 | 1,862 | ||||||
| Unrealized losses on other real estate related investments, net | 2,151 | — | 2,605 | — | ||||||
| Normalized FAD | $ | 36,113 | $ | 37,463 | $ | 72,669 | $ | 75,354 | ||
| FFO per share | $ | 0.32 | $ | 0.36 | $ | 0.65 | $ | 0.67 | ||
| Normalized FFO per share | $ | 0.35 | $ | 0.37 | $ | 0.70 | $ | 0.74 | ||
| FAD per share | $ | 0.33 | $ | 0.38 | $ | 0.69 | $ | 0.71 | ||
| Normalized FAD per share | $ | 0.36 | $ | 0.39 | $ | 0.73 | $ | 0.78 | ||
| Diluted weighted average shares outstanding [1] | 99,360 | 96,672 | 99,278 | 96,687 | ||||||
| [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. | ||||||||||
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONSOLIDATED STATEMENTS OF OPERATIONS - 5 QUARTER TREND | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | ||||||
| Ended | Ended | Ended | Ended | Ended | ||||||
| June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | ||||||
| Revenues: | ||||||||||
| Rental income | $ | 46,806 | $ | 47,018 | $ | 47,675 | $ | 46,163 | $ | 47,745 |
| Interest and other income | 747 | 3,275 | 4,135 | 4,443 | 3,808 | |||||
| Total revenues | 47,553 | 50,293 | 51,810 | 50,606 | 51,553 | |||||
| Expenses: | ||||||||||
| Depreciation and amortization | 12,559 | 12,256 | 11,926 | 12,238 | 12,716 | |||||
| Interest expense | 6,303 | 8,355 | 9,608 | 9,827 | 11,040 | |||||
| Property taxes | 1,254 | 691 | 968 | 880 | 1,390 | |||||
| Impairment of real estate investments | 1,701 | 12,322 | 5,356 | 1,886 | 21,392 | |||||
| Property operating expenses | 89 | 3,808 | 695 | 963 | 658 | |||||
| General and administrative | 4,978 | 5,159 | 4,813 | 5,061 | 4,718 | |||||
| Total expenses | 26,884 | 42,591 | 33,366 | 30,855 | 51,914 | |||||
| Other loss: | ||||||||||
| (Loss) gain on sale of real estate, net | — | (2,287) | (1,668) | (70) | 2,028 | |||||
| Unrealized losses on other real estate related investments, net | — | (4,706) | (2,396) | (454) | (2,151) | |||||
| Total other loss | — | (6,993) | (4,064) | (524) | (123) | |||||
| Net income (loss) | $ | 20,669 | $ | 709 | $ | 14,380 | $ | 19,227 | $ | (484) |
| Diluted earnings (loss) per share | $ | 0.21 | $ | 0.01 | $ | 0.15 | $ | 0.19 | $ | (0.01) |
| Diluted weighted average shares outstanding | 96,598 | 96,625 | 97,272 | 99,087 | 99,117 | |||||
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND | ||||||||||
| (in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | ||||||
| Ended | Ended | Ended | Ended | Ended | ||||||
| June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | ||||||
| Net income (loss) | $ | 20,669 | $ | 709 | $ | 14,380 | $ | 19,227 | $ | (484) |
| Depreciation and amortization | 12,559 | 12,256 | 11,926 | 12,238 | 12,716 | |||||
| Interest expense | 6,303 | 8,355 | 9,608 | 9,827 | 11,040 | |||||
| Amortization of stock-based compensation | 1,394 | 1,380 | 1,463 | 936 | 924 | |||||
| EBITDA | 40,925 | 22,700 | 37,377 | 42,228 | 24,196 | |||||
| Impairment of real estate investments | 1,701 | 12,322 | 5,356 | 1,886 | 21,392 | |||||
| Provision for doubtful accounts and lease restructuring | — | — | 390 | — | — | |||||
| Property operating expenses | 631 | 3,821 | 914 | 1,134 | 831 | |||||
| Loss (gain) on sale of real estate, net | — | 2,287 | 1,668 | 70 | (2,028) | |||||
| Unrealized losses on other real estate related investments, net | — | 4,706 | 2,396 | 454 | 2,151 | |||||
| Normalized EBITDA | $ | 43,257 | $ | 45,836 | $ | 48,101 | $ | 45,772 | $ | 46,542 |
| Net income (loss) | $ | 20,669 | $ | 709 | $ | 14,380 | $ | 19,227 | $ | (484) |
| Real estate related depreciation and amortization | 12,553 | 12,251 | 11,921 | 12,233 | 12,712 | |||||
| Impairment of real estate investments | 1,701 | 12,322 | 5,356 | 1,886 | 21,392 | |||||
| Loss (gain) on sale of real estate, net | — | 2,287 | 1,668 | 70 | (2,028) | |||||
| Funds from Operations (FFO) | 34,923 | 27,569 | 33,325 | 33,416 | 31,592 | |||||
| Provision for doubtful accounts and lease restructuring | — | — | 390 | — | — | |||||
| Property operating expenses | 631 | 3,821 | 914 | 1,134 | 831 | |||||
| Unrealized losses on other real estate related investments, net | — | 4,706 | 2,396 | 454 | 2,151 | |||||
| Normalized FFO | $ | 35,554 | $ | 36,096 | $ | 37,025 | $ | 35,004 | $ | 34,574 |
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND (continued) | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | ||||||
| Ended | Ended | Ended | Ended | Ended | ||||||
| June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | ||||||
| Net income (loss) | $ | 20,669 | $ | 709 | $ | 14,380 | $ | 19,227 | $ | (484) |
| Real estate related depreciation and amortization | 12,553 | 12,251 | 11,921 | 12,233 | 12,712 | |||||
| Amortization of deferred financing fees | 520 | 520 | 535 | 609 | 608 | |||||
| Amortization of stock-based compensation | 1,394 | 1,380 | 1,463 | 936 | 924 | |||||
| Straight-line rental income | (5) | (3) | (3) | 7 | 7 | |||||
| Impairment of real estate investments | 1,701 | 12,322 | 5,356 | 1,886 | 21,392 | |||||
| Loss (gain) on sale of real estate, net | — | 2,287 | 1,668 | 70 | (2,028) | |||||
| Funds Available for Distribution (FAD) | 36,832 | 29,466 | 35,320 | 34,968 | 33,131 | |||||
| Provision for doubtful accounts and lease restructuring | — | — | 390 | — | — | |||||
| Property operating expenses | 631 | 3,821 | 914 | 1,134 | 831 | |||||
| Unrealized losses on other real estate related investments, net | — | 4,706 | 2,396 | 454 | 2,151 | |||||
| Normalized FAD | $ | 37,463 | $ | 37,993 | $ | 39,020 | $ | 36,556 | $ | 36,113 |
| FFO per share | $ | 0.36 | $ | 0.28 | $ | 0.34 | $ | 0.34 | $ | 0.32 |
| Normalized FFO per share | $ | 0.37 | $ | 0.37 | $ | 0.38 | $ | 0.35 | $ | 0.35 |
| FAD per share | $ | 0.38 | $ | 0.30 | $ | 0.36 | $ | 0.35 | $ | 0.33 |
| Normalized FAD per share | $ | 0.39 | $ | 0.39 | $ | 0.40 | $ | 0.37 | $ | 0.36 |
| Diluted weighted average shares outstanding [1] | 96,672 | 96,752 | 97,408 | 99,195 | 99,360 | |||||
| [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. | ||||||||||
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| June 30, 2023 | December 31, 2022 | |||||||||
| Assets: | ||||||||||
| Real estate investments, net | $ | 1,528,234 | $ | 1,421,410 | ||||||
| Other real estate related investments, at fair value (including accrued interest of 1,136 as of June 30, 2023 and 1,320 as of December 31, 2022) | 166,822 | 156,368 | ||||||||
| Assets held for sale, net | 21,554 | 12,291 | ||||||||
| Cash and cash equivalents | 1,145 | 13,178 | ||||||||
| Accounts and other receivables | 387 | 416 | ||||||||
| Prepaid expenses and other assets, net | 14,029 | 11,690 | ||||||||
| Deferred financing costs, net | 4,781 | 5,428 | ||||||||
| $ | 1,736,952 | $ | 1,620,781 | |||||||
| Liabilities and Equity: | ||||||||||
| Senior unsecured notes payable, net | $ | 395,594 | $ | 395,150 | ||||||
| Senior unsecured term loan, net | 199,454 | 199,348 | ||||||||
| Unsecured revolving credit facility | 280,000 | 125,000 | ||||||||
| Accounts payable, accrued liabilities and deferred rent liabilities | 21,039 | 24,360 | ||||||||
| Dividends payable | 27,843 | 27,550 | ||||||||
| 923,930 | 771,408 | |||||||||
| Equity: | ||||||||||
| Common stock | 991 | 990 | ||||||||
| Additional paid-in capital | 1,245,717 | 1,245,337 | ||||||||
| Cumulative distributions in excess of earnings | (433,686) | (396,954) | ||||||||
| 813,022 | 849,373 | |||||||||
| $ | 1,736,952 | $ | 1,620,781 |
All values are in US Dollars.
| CARETRUST REIT, INC. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| (in thousands) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| For the Six Months Ended June 30, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income (loss) | $ | 18,743 | $ | (22,595) | ||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization (including below-market ground leases) | 24,983 | 26,167 | ||||||||||||
| Amortization of deferred financing costs | 1,217 | 1,040 | ||||||||||||
| Unrealized losses on other real estate related investments, net | 2,605 | — | ||||||||||||
| Amortization of stock-based compensation | 1,860 | 2,915 | ||||||||||||
| Straight-line rental income | 14 | (11) | ||||||||||||
| Adjustment for collectibility of rental income | — | 977 | ||||||||||||
| Noncash interest income | 184 | (13) | ||||||||||||
| Gain on sale of real estate, net | (1,958) | (186) | ||||||||||||
| Impairment of real estate investments | 23,278 | 61,384 | ||||||||||||
| Provision for loan losses, net | — | 3,844 | ||||||||||||
| Change in operating assets and liabilities: | ||||||||||||||
| Accounts and other receivables | 14 | 578 | ||||||||||||
| Prepaid expenses and other assets, net | (330) | (1,724) | ||||||||||||
| Accounts payable, accrued liabilities and deferred rent liabilities | (3,624) | (4,074) | ||||||||||||
| Net cash provided by operating activities | 66,986 | 68,302 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Acquisitions of real estate, net of deposits applied | (172,453) | (21,915) | ||||||||||||
| Purchases of equipment, furniture and fixtures and improvements to real estate | (6,380) | (3,628) | ||||||||||||
| Investment in real estate related investments and other loans receivable | (27,262) | (102,086) | ||||||||||||
| Principal payments received on real estate related investments and other loans receivable | 15,287 | 1,026 | ||||||||||||
| Escrow deposits for potential acquisitions of real estate | (300) | — | ||||||||||||
| Net proceeds from sales of real estate | 14,464 | 959 | ||||||||||||
| Net cash used in investing activities | (176,644) | (125,644) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from (costs paid for) the issuance of common stock, net | (629) | — | ||||||||||||
| Borrowings under unsecured revolving credit facility | 155,000 | 125,000 | ||||||||||||
| Payments of deferred financing costs | (21) | — | ||||||||||||
| Net-settle adjustment on restricted stock | (1,479) | (4,469) | ||||||||||||
| Dividends paid on common stock | (55,246) | (52,817) | ||||||||||||
| Net cash provided by financing activities | 97,625 | 67,714 | ||||||||||||
| Net (decrease) increase in cash and cash equivalents | (12,033) | 10,372 | ||||||||||||
| Cash and cash equivalents as of the beginning of period | 13,178 | 19,895 | ||||||||||||
| Cash and cash equivalents as of the end of period | $ | 1,145 | $ | 30,267 | ||||||||||
| CARETRUST REIT, INC. | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| DEBT SUMMARY | ||||||||||||||
| (dollars in thousands) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| June 30, 2023 | ||||||||||||||
| Interest | Maturity | % of | Deferred | Net Carrying | ||||||||||
| Debt | Rate | Date | Principal | Principal | Loan Costs | Value | ||||||||
| Fixed Rate Debt | ||||||||||||||
| Senior unsecured notes payable | 3.875 | % | 2028 | $ | 400,000 | 45.5 | % | $ | (4,406) | $ | 395,594 | |||
| Floating Rate Debt | ||||||||||||||
| Senior unsecured term loan | 6.691 | % | [1] | 2026 | 200,000 | 22.7 | % | (546) | 199,454 | |||||
| Unsecured revolving credit facility | 6.299 | % | [2] | 2028 | [3] | 280,000 | 31.8 | % | — | [4] | 280,000 | |||
| 6.462 | % | 480,000 | 54.5 | % | (546) | 479,454 | ||||||||
| Total Debt | 5.286 | % | $ | 880,000 | 100.0 | % | $ | (4,952) | $ | 875,048 | ||||
| [1] Funds can be borrowed at applicable SOFR plus 1.50% to 2.20% or at the Base Rate (as defined) plus 0.50% to 1.20%. | ||||||||||||||
| [2] Funds can be borrowed at applicable SOFR plus 1.10% to 1.55% or at the Base Rate (as defined) plus 0.10% to 0.55%. | ||||||||||||||
| [3] Maturity date assumes exercise of two 6-month extension options. | ||||||||||||||
| [4] Deferred financing fees are not shown net for the unsecured revolving credit facility and are included in assets on the balance sheet. |
Non-GAAP Financial Measures
EBITDA represents net income before interest expense (including amortization of deferred financing costs), amortization of stock-based compensation, and depreciation and amortization. Normalized EBITDA represents EBITDA as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of core operating performance, such as recovery of previously reversed rent, lease termination revenue, property operating expenses, gains or losses from dispositions of real estate, real estate impairment charges, provision for loan losses, non-routine transaction costs, loss on extinguishment of debt, unrealized loss on other real estate related investments and provision for doubtful accounts and lease restructuring, as applicable. EBITDA and Normalized EBITDA do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. EBITDA and Normalized EBITDA do not purport to be indicative of cash available to fund future cash requirements, including the Company’s ability to fund capital expenditures or make payments on its indebtedness. Further, the Company’s computation of EBITDA and Normalized EBITDA may not be comparable to EBITDA and Normalized EBITDA reported by other REITs.
Funds from Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“Nareit”), and Funds Available for Distribution (“FAD”) are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP.
FFO is defined by Nareit as net income computed in accordance with GAAP, excluding gains or losses from dispositions of real estate investments, real estate related depreciation and amortization and real estate impairment charges, and adjustments for unconsolidated partnerships and joint ventures. The Company computes FFO in accordance with Nareit’s definition.
FAD is defined as FFO excluding noncash income and expenses, such as amortization of stock-based compensation, amortization of deferred financing fees and the effects of straight-line rent. The Company considers FAD to be a useful supplemental measure to evaluate the Company’s operating results excluding these income and expense items to help investors, analysts and other interested parties compare the operating performance of the Company between periods or as compared to other companies on a more consistent basis.
In addition, the Company reports Normalized FFO and Normalized FAD, which adjust FFO and FAD for certain revenue and expense items that the Company does not believe are indicative of its ongoing operating results, such as provision for loan losses, non-routine transaction costs, provision for doubtful accounts and lease restructuring, loss on extinguishment of debt, unrealized loss on other real estate related investments, recovery of previously reversed rent, lease termination revenue and property operating expenses. By excluding these items, investors, analysts and our management can compare Normalized FFO and Normalized FAD between periods more consistently.
While FFO, Normalized FFO, FAD and Normalized FAD are relevant and widely-used measures of operating performance among REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO, Normalized FFO, FAD and Normalized FAD do not purport to be indicative of cash available to fund future cash requirements.
Further, the Company’s computation of FFO, Normalized FFO, FAD and Normalized FAD may not be comparable to FFO, Normalized FFO, FAD and Normalized FAD reported by other REITs that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define FAD differently than the Company does.
The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure. The Company also believes that the use of EBITDA, Normalized EBITDA, FFO, Normalized FFO, FAD and Normalized FAD, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful. The Company considers EBITDA and Normalized EBITDA useful in understanding the Company’s operating results independent of its capital structure, indebtedness and other charges that are not indicative of its ongoing results, thereby allowing for a more meaningful comparison of operating performance between periods and against other REITs. The Company considers FFO, Normalized FFO, FAD and Normalized FAD to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses from real estate dispositions, impairment charges and real estate related depreciation and amortization, and, for FAD and Normalized FAD, by excluding noncash income and expenses such as amortization of stock-based compensation, amortization of deferred financing fees, and the effects of straight-line rent, FFO, Normalized FFO, FAD and Normalized FAD can help investors compare the Company’s operating performance between periods and to other REITs.
exhibit992-ctreq22023fin
Financial Supplement Second Quarter 2023 Exhibit 99.2
Disclaimers 02 This supplement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the following: future financial and financing plans; strategies related to the Company's business and its portfolio, including acquisition opportunities and disposition plans; growth prospects, operating and financial performance, expectations regarding the making of distributions, payment of dividends, and the performance of our operators and their respective facilities. Words such as “anticipate,” “believe,” “could,” "expect,” “estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,” “would,” and similar expressions, or the negative of these terms, are intended to identify such forward- looking statements, though not all forward-looking statements contain these identifying words. Our forward- looking statements are based on our current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) the impact of possible additional surges of COVID-19 infections or the risk of other pandemics, epidemics or infectious disease outbreaks, measures taken to prevent the spread of such outbreaks and the related impact on our business or the businesses of our tenants; (ii) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iv) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (v) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vi) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (viii) access to debt and equity capital markets; (ix) fluctuating interest rates and inflation; (x) the ability to retain our key management personnel; (xi) the ability to maintain our status as a real estate investment trust (“REIT”); (xii) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xiii) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xiv) any additional factors included in our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 and June 30, 2023, including in the sections entitled “Risk Factors” in Item 1A of such reports, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the "SEC"). This supplement contains certain non-GAAP financial information relating to CareTrust REIT including EBITDA, Normalized EBITDA, FFO, Normalized FFO, FAD, Normalized FAD, and certain related ratios. Explanatory footnotes and a glossary explaining this non-GAAP information are included in this supplement. Reconciliations of these non-GAAP measures are also included in this supplement or on our website. See “Financials and Filings – Quarterly Results” on the Investors section of our website at investor.caretrustreit.com. Non-GAAP financial information does not represent financial performance under GAAP and should not be considered in isolation, as a measure of liquidity, as an alternative to net income, or as an indicator of any other performance measure determined in accordance with GAAP. You should not rely on non-GAAP financial information as a substitute for GAAP financial information, and should recognize that non-GAAP information presented herein may not compare to similarly-termed non-GAAP information of other companies (i.e., because they do not use the same definitions for determining any such non- GAAP information). This supplement also includes certain information regarding operators of our properties (such as EBITDARM Coverage, EBITDAR Coverage, and Occupancy), most of which are not subject to audit or SEC reporting requirements. The operator information provided in this supplement has been provided by the operators. We have not independently verified this information, but have no reason to believe that such information is inaccurate in any material respect. We are providing this information for informational purposes only. The Ensign Group, Inc. ("Ensign") and The Pennant Group, Inc. ("Pennant") are subject to the registration and reporting requirements of the SEC and are required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s and Pennant's financial statements, as filed with the SEC, can be found at the SEC's website at www.sec.gov. This supplement provides information about our financial results as of and for the quarter ended June 30, 2023 and is provided as of the date hereof, unless specifically stated otherwise. We expressly disclaim any obligation to update or revise any information in this supplement (including forward-looking statements), whether to reflect any change in our expectations, any change in events, conditions or circumstances, or otherwise. As used in this supplement, unless the context requires otherwise, references to “CTRE,” “CareTrust,” “CareTrust REIT” or the “Company” refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America.
Table of Contents CONTACT INFORMATION 03 CareTrust REIT, Inc. 905 Calle Amanecer, Suite 300 San Clemente, CA 92673 (949) 542-3130 ir@caretrustreit.com www.CareTrustReit.com Transfer Agent Broadridge Corporate Issuer Solutions P.O. Box 1342 Brentwood, NY 11717 (800) 733-1121 shareholder@broadridge.com Camarillo Senior Living (Camarillo, CA) COMPANY PROFILE 04 COMPANY SNAPSHOT 05 INVESTMENTS 06 PORTFOLIO OVERVIEW 07-14 Portfolio Repositioning Top 10 Tenants Lease Coverage Portfolio Performance Rent Diversification by Tenant Geographic Diversification Rent Diversification by State Lease Maturities Tenant Purchase Options FINANCIAL OVERVIEW 15-22 Consolidated Statements of Operations Reconciliation of EBITDA, FFO and FAD Consolidated Balance Sheets Key Debt Metrics Debt Summary Equity Capital Transactions Other Financial Highlights GLOSSARY 23-24
Company Profile MANAGEMENT Dave Sedgwick – President & Chief Executive Officer Bill Wagner - Chief Financial Officer James Callister - Chief Investment Officer CareTrust REIT is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of seniors housing and healthcare-related properties. CareTrust REIT generates revenues primarily by leasing properties to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses. Since its debut as a standalone public company on June 1, 2014, and as of June 30, 2023, CareTrust REIT has expanded its tenant roster to 23 operators, and has grown its real estate portfolio to 205 net-leased healthcare properties across 25 states, consisting of 22,311 operating beds/units, excluding 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non- operational. As of June 30, 2023, CareTrust REIT also had five secured loans receivable and one mezzanine loan receivable. BOARD OF DIRECTORS Diana Laing - Chair Anne Olson Spencer Plumb Dave Sedgwick Careina Williams ANALYST COVERAGE* Baird - Wes Golladay | (216) 737-7510 Barclays - Steve Valiquette | (212) 526-5496 Berenberg - Tao Qiu | (646) 949-9058 BMO Capital Markets - Juan Sanabria | (312) 845-4074 KeyBanc Capital Markets - Austin Wurschmidt | (917) 368-2311 Raymond James - Jonathan Hughes | (727) 567-2438 RBC Capital Markets - Michael Carroll | (440) 715-2649 Stifel - Steve Manaker | (212) 271-3716 Wells Fargo - Connor Siversky | (646) 949-9037 * This information is provided as of August 3, 2023. This list may be incomplete and is subject to change as firms initiate or discontinue coverage of CareTrust. Please note that any opinions, estimates, or forecasts regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, or forecasts of CareTrust or our management. CareTrust does not by our reference or distribution of the information above imply our endorsement of or concurrence with any opinions, estimates, or forecasts of these analysts. Interested persons may obtain copies of analysts’ reports on their own as we do not distribute these reports. Several of these firms may, from time to time, own our stock and/or hold other long or short positions in our stock and may provide compensated services to us. 04
CARETRUST REIT, INC. NYSE: CTRE Market Data (as of June 30, 2023) ◦ Closing Price: $19.86 ◦ 52 Week Range: $22.46 – $16.22 ◦ Market Cap: $2,109M[1] ◦ Enterprise Value: $2,857M ◦ Outstanding Shares: 106.211M[1] Credit Ratings ◦ Corporate Rating: BB (stable) ◦ Senior Unsecured Notes: BB+ ◦ Corporate Rating: BB+ (stable) ◦ Senior Unsecured Notes: BB+ FitchS&P ◦ Corporate Rating: Ba2 (stable) ◦ Senior Unsecured Notes: Ba2 Moody’s $1,918.7M INVESTMENTS 205 PROPERTIES 22,311 OPERATING BEDS/UNITS 23 OPERATORS 25 STATES Notes: [1] Market cap is calculated assuming the issuance of shares from the forward equity sales under the ATM program. Outstanding shares assumes the issuance of shares from the forward equity sales under the ATM program. Note: Portfolio amounts presented above are as of June 30, 2023 and exclude our five secured loans receivable and one mezzanine loan receivable. Additionally, amounts exclude 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non-operational. General Note: Totals may not add due to rounding. Snapshot 05
Notes: [1] Initial Investment for properties acquired in connection with the Company becoming public represents Ensign's and Pennant's gross book value. Initial Investment for properties acquired since inception as a public company represents CareTrust REIT’s purchase price and transaction costs and includes commitments for capital expenditures that are not rent producing. [2] Initial Operating Beds/Units as of the acquisition date. [3] Initial Rent represents the annualized acquisition-date cash rent, deferred interest income on any preferred equity investments and interest income on any mortgage loans receivable, secured loans receivable and mezzanine loans. Initial Rent excludes ground lease income. [4] Initial Yield represents Initial Rent divided by Initial Investment and excludes properties not under a long-term master lease. [5] All amounts, except as otherwise indicated, include any preferred equity investments, mortgage loans receivable and mezzanine loans receivable. [6] The Summit lease provides for abatement of the first month of rent. Initial rent begins with the first month the tenant pays cash rent. [7] The lease provides for abatement of the first three months of rent. Initial rent begins with the first month the tenant pays cash rent. [8] The lease provides for the abatement of the first month of rent. Initial rent begins with the first month the tenant pays cash rent. [9] The Links Healthcare Group master lease, which includes the investments on 6/1/2023 and 6/30/2023, provides for annual fixed increases to $7.6 million in year two (8.4% yield) and $8.9 million in year three (9.8% yield). Investments (dollars in thousands) 06 Date Operator Property Type Location Facilities Initial Investment[1] Initial Operating Beds/Units [2] Initial Rent [3] Initial Yield[4] 6/1/2014 The Ensign Group ALF, SNF, Campus Various 94 $ 501,673 10,053 $ 56,000 N/A 2014 Investments 6 33,609 157 3,076 9.2 % 2015 Investments 20 233,028 1,840 22,263 9.6 % 2016 Investments 35 288,023 2,800 26,084 9.1 % 2017 Investments 36 309,805 3,324 28,000 9.0 % 2018 Investments 12 111,950 1,103 9,955 8.9 % 2019 Investments 27 340,884 3,348 30,168 8.8 % 2020 Investments 17 105,267 961 9,398 8.9 % 2021 Investments 10 196,576 1,247 13,103 7.3 % 2022 Investments 29 169,163 3,351 15,213 9.0 % 4/01/2023 Momentum, Summit SNF TX, KS 2 17,050 280 1,693 9.9 % [6] 5/01/2023 Chapters Living ALF IL 2 18,183 136 1,710 9.4 % [7] 5/01/2023 Elevation Group SNF GA 1 12,072 148 1,140 9.4 % 6/01/2023 EverGreen Health Group SNF TX 1 14,330 125 1,365 9.5 % [8] 6/01/2023 Ridgeline Management ALF MI, OH 2 21,135 105 1,785 8.4 % 6/01/2023 Links Healthcare Group SNF, SNF Campus CA 3 71,431 387 5,415 7.6 % [9] 6/29/2023 Secured Loan SNF Campus, ILF CA 3 25,993 223 2,339 9.0 % 6/30/2023 Links Healthcare Group SNF CA 1 19,252 99 1,388 7.2 % [9] 7/17/2023 Secured Loan SNF FL 2 15,727 115 1,415 9.0 % 2023 Investments 17 215,173 1,618 18,250 8.5 % Total Lifetime Investments[5] 209 2,003,478 19,749 175,510 8.8 % Total Investments[5] 303 $ 2,505,151 29,802 $ 231,510
Notes: [1] Portfolio repositioning slide represents activity related to our FY2022 repositioning plan and excludes properties held for sale or disposed of that are outside of this plan. [2] Net sales proceeds includes selling costs. [3] Net of seller financing of $12.0 million, of which $5.0 million was repaid during the year ended December 31, 2022. [4] Net of seller financing of $2.0 million. [5] Contractual Rent reflects year 1 rent under the new Master Lease. [6] Estimated Rent Commencement date based on final Change Of Ownership approval and final licensing. [7] The 2022 annualized contractual rent in place before the lease amendments during 2022. [8] Contractual Rent based on year 1 rent under new Master Lease. Portfolio Repositioning[1] (dollars in thousands) (As of August 1, 2023) 07 Closed Dispositions Close Date # of Properties Property Type # of Beds Gross Sales Price Net Sales Proceeds[2] September 2022 7 SNF / Campus 708 $ 52,000 $ 37,823 [3] December 2022 5 ALF 301 13,000 11,033 January 2023 1 ALF 105 3,800 3,240 May 2023 1 ALF 30 2,750 2,605 June 2023 1 ALF 162 3,000 457 [4] 15 1,306 $ 74,550 $ 55,158 Retained Facilities Type # of Properties Property Type # of Beds 2022 Contractual Rent 2022 Collected Rent Year 1 Contractual Rent Estimated Rent Commencement Re-Tenant 2 ALF 96 $ 2,341 $ — $ 825 [5] 7/1/23 Re-Tenant 2 ALF 98 — — — TBD[6] Re-Tenant/Conversion 2 ALF 236 1,100 [7] — 1,741 [8] 1Q 2024 6 430 $ 3,441 $ — $ 2,566 On the Market Status # of Properties Property Type # of Beds 2022 Contractual Rent 2022 Collected Rent 2023 Collected Rent Estimated Net Proceeds Under PSA 2 ALF 245 $ 984 $ — $ — $ 5,120 Signed LOI 1 ALF 64 214 — — — 3 309 $ 1,198 $ — $ — $ 5,120
Notes: [1] Lease Coverage excludes 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non-operational. [2] EBITDAR Coverage and EBITDARM Coverage are based on financial information provided by our tenants. We have not independently verified this information, but have no reason to believe that such information is inaccurate in any material respect. Coverage metrics are based on contractual cash rents in place during the period presented unless a lease has been entered into or amended since the end of the period, in which case the current contractual rent is used. [3] Ensign and Pennant have announced that they have returned all or a portion of the provider relief funds issued to them by the U.S. Department of Health and Human Services ("HHS") pursuant to the CARES Act in connection with the COVID-19 pandemic ("HHS Relief Funds"). [4] Coverage metrics in this section exclude all HHS Relief Funds and PPP Loans received and retained to date, if any. Where applicable, includes Employee Retention Tax Credits amortized over trailing 12 months based on month received and applied. [5] Coverage metrics in this section include all known HHS Relief Funds received and retained as reported to us through August 1, 2023, if any, and amortizes the retained HHS Relief Funds ratably over the period of availability based on when the HHS Relief Funds were received in accordance with HHS' current guidelines for using the HHS Relief Funds for allowable purposes, except for phase 4 funding which is amortized ratably from the date the funds are received through June 30, 2022. The calculations further assume that (i) none of the HHS Relief Funds retained to date will be returned to HHS, and (ii) no additional HHS Relief Funds will be distributed to providers in the future. Excludes PPP Loans. Where applicable, includes Employee Retention Tax Credits amortized over trailing 12 months based on month received. [6] No coverage metrics are provided for the period prior to lease commencement for facilities transferred to The Pennant Group in March 2023. [7] No coverage metrics are provided as the facilities were acquired in June 2023. [8] No coverage metrics are provided for the period prior to lease commencement for facilities acquired in March and April 2021. See "Glossary" for additional information. Top 10 Tenants Lease Coverage [1] 08 Twelve Months Ended March 31, 2020 Twelve Months Ended March 31, 2023 Twelve Months Ended March 31, 2023 Pre COVID-19 Excludes Use of HHS Funds[4] Includes Amortized HHS Funds[5] EBITDAR Coverage[2] EBITDARM Coverage[2] EBITDAR Coverage[2] EBITDARM Coverage[2] EBITDAR Coverage[2] EBITDARM Coverage[2] 1 The Ensign Group[3] 3.02x 3.79x 3.30x 4.14x 3.30x 4.14x 2 Priority Management Group 1.50x 1.81x 1.34x 1.64x 1.43x 1.74x 3 Cascadia Healthcare 1.61x 2.07x 1.74x 2.23x 1.78x 2.27x 4 Providence Group 1.04x 1.46x 2.60x 3.10x 2.64x 3.03x 5 Eduro Healthcare, LLC 1.17x 1.65x 1.08x 1.59x 1.14x 1.66x 6 Covenant Care 1.37x 1.94x 0.86x 1.47x 0.87x 1.48x 7 The Pennant Group[3][6] 1.27x 1.48x 0.61x 0.80x 0.61x 0.80x 8 Links Healthcare[7] — — — — — — 9 Bayshire Senior Communities[8] 1.32x 1.60x 1.34x 1.77x 1.34x 1.77x 10 WLC Management 2.15x 2.59x 2.06x 2.55x 2.14x 2.63x Total Top 10 Tenants 2.12x 2.67x 2.24x 2.83x 2.27x 2.86x All Other Tenants 1.06x 1.42x 1.26x 1.65x 1.32x 1.72x Total 2.02x 2.55x 2.13x 2.70x 2.16x 2.73x
Portfolio Performance 09 Notes: [1] Initial Investment for properties acquired in connection with the Company becoming public represents Ensign's and Pennant's gross book value. Initial Investment for properties acquired since inception as a public company represents CareTrust REIT’s purchase price and transaction costs and includes commitments for capital expenditures that are not rent producing and impairment charges. [2] Rent represents June 2023 contractual cash rent, annualized, and excludes ground lease income and the impact of any rent abatement for recent acquisitions, if applicable. Additionally, if a lease was entered into, amended or restructured subsequent to June 30, 2023 but prior to our filing date for the respective period, the initial or amended contractual cash rent is used. [3] Current Yield represents Rent divided by Investment. [4] All amounts exclude our five secured loans receivable and one mezzanine loan receivable as of June 30, 2023. Additionally, amounts exclude 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non-operational. [5] Rent represents March 2023 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to March 31, 2023 but prior to our filing date for the respective period, the initial or amended contractual cash rent is used. [6] All amounts exclude our three secured loans receivable and one mezzanine loan receivable as of March 31, 2023. Additionally, amounts exclude six properties classified as held for sale as of March 31, 2023, two facilities which are in the process of being repurposed and two that are non-operational. [7] Rent represents June 2022 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to June 30, 2022 but prior to our filing date for the respective period, the initial or amended contractual cash rent is used. [8] All amounts exclude our one senior secured loan receivable and two mezzanine loans receivable as of June 30, 2022. Additionally, amounts exclude 27 properties classified as held for sale as of June 30, 2022 and three facilities which are or were in the process of being repurposed as of such date. See “Glossary” for additional information. (dollars in thousands) As of June 30, 2023 Asset Type Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[2] % of Total Rent Current Yield[3] Skilled Nursing 148 16,203 $ 1,357,330 70.7 % $ 142,216 72.4 % 10.5 % Multi-Service Campus 25 3,632 388,582 20.3 % 34,558 17.6 % 8.9 % Seniors Housing 32 2,476 172,740 9.0 % 19,552 10.0 % 11.3 % Total Net-Leased Assets[4] 205 22,311 $ 1,918,652 100.0 % $ 196,326 100.0 % 10.2 % (dollars in thousands) As of March 31, 2023 Asset Type Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[5] % of Total Rent Current Yield[3] Skilled Nursing 153 16,134 $ 1,294,652 72.3 % $ 136,419 74.0 % 10.5 % Multi-Service Campus 24 3,464 363,306 20.3 % 32,204 17.5 % 8.9 % Seniors Housing 28 2,235 132,912 7.4 % 15,665 8.5 % 11.8 % Total Net-Leased Assets[6] 205 21,833 $ 1,790,870 100.0 % $ 184,288 100.0 % 10.3 % (dollars in thousands) As of June 30, 2022 Asset Type Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[7] % of Total Rent Current Yield[3] Skilled Nursing 154 16,208 $ 1,301,148 74.2 % $ 135,041 75.5 % 10.4 % Multi-Service Campus 24 3,466 363,306 20.7 % 31,729 17.7 % 8.7 % Seniors Housing 20 1,863 89,218 5.1 % 12,194 6.8 % 13.7 % Total Net-Leased Assets[8] 198 21,537 $ 1,753,672 100.0 % $ 178,964 100.0 % 10.2 %
Rent Diversification by Tenant 10 Notes: [1] All amounts exclude our five secured loans receivable and one mezzanine loan receivable. Additionally, amounts exclude 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non-operational. [2] Rent represents June 2023 contractual cash rent, annualized, and excludes ground lease income and the impact of any rent abatement for recent acquisitions, if applicable. Additionally, if a lease was entered into, amended or restructured subsequent to June 30, 2023, the initial or amended contractual cash rent is used. (dollars in thousands) As of June 30, 2023[1] Facilities Operating Beds/Units Rent[2] % of Total Rent 1 The Ensign Group 98 10,399 $ 67,723 34.5 % 2 Priority Management Group 15 2,144 30,243 15.4 % 3 Cascadia Healthcare 12 1,053 12,765 6.5 % 4 Providence Group 7 885 10,780 5.5 % 5 Eduro Healthcare, LLC 9 990 9,594 4.9 % Total Top 5 Tenants 141 15,471 $ 131,105 66.8 % 6 Covenant Care 7 935 8,811 4.5 % 7 The Pennant Group 10 1,009 8,100 4.1 % 8 Links Healthcare Group 4 486 6,803 3.5 % 9 Bayshire Senior Communities 5 596 6,679 3.4 % 10 WLC Management 9 917 6,494 3.3 % Total Top 10 Tenants 176 19,414 $ 167,992 85.6 % All Other Tenants 29 2,897 $ 28,334 14.4 % Total 205 22,311 $ 196,326 100.0 %
Geographic Diversification (% of run-rate rent) 11 * Less than 1%. Note: Numbers are as of June 30, 2023 and exclude our five secured loans receivable and one mezzanine loan receivable. Additionally, amounts exclude 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non-operational. 7% * 29% 23% 9% 8% 7% 4%4% 3% 3% 2% 1% 1% 1% 1% 1% 1% 1% 1% * * * * * * *
Rent Diversification by State 12 Notes: [1] All amounts exclude our five secured loans receivable and one mezzanine loan receivable. Additionally, amounts exclude 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non-operational. [2] Rent represents June 2023 contractual cash rent, annualized, and excludes ground lease income and the impact of any rent abatement for recent acquisitions, if applicable. Additionally, if a lease was entered into, amended or restructured subsequent to June 30, 2023, the initial or amended contractual cash rent is used. (dollars in thousands) As of June 30, 2023[1] Net-Leased Assets by State Facilities Operating Beds/Units Rent[2] % of Total Rent 1 California 43 5,271 $ 56,938 29.0 % 2 Texas 45 5,874 44,183 22.5 % 3 Louisiana 8 1,164 17,840 9.1 % 4 Idaho 17 1,474 15,102 7.7 % 5 Arizona 11 1,340 13,429 6.8 % Top 5 States 124 15,123 $ 147,492 75.1 % 7 Illinois 11 1,053 8,204 4.2 % 6 Utah 13 1,374 7,858 4.0 % 8 Colorado 7 779 5,991 3.1 % 9 Washington 10 936 4,943 2.5 % 10 Ohio 6 612 4,397 2.2 % Top 10 States 171 19,877 $ 178,885 91.1 % All Other States 34 2,434 $ 17,441 8.9 % Total 205 22,311 $ 196,326 100.0 %
Lease Maturities 13 Notes: [1] All amounts exclude our five secured loans receivable and one mezzanine loan receivable. Additionally, amounts exclude 15 properties classified as held for sale as of June 30, 2023, two facilities which are in the process of being repurposed and two that are non-operational. [2] Lease Maturity Year represents the scheduled expiration year of the primary term of the lease and does not include tenant extension options or purchase options, if any. [3] Rent represents June 2023 contractual cash rent, annualized, and excludes ground lease income and the impact of any rent abatement for recent acquisitions, if applicable. Additionally, if a lease was entered into, amended or restructured subsequent to June 30, 2023, the initial or amended contractual cash rent is used. Lease Maturity Year % o f T ot al R en t (dollars in thousands) As of June 30, 2023[1] Lease Maturity Year[2] Rent[3] % of Total Rent 2024 $ 1,583 0.8 % 2027 5,476 2.8 % 2029 9,330 4.8 % 2030 6,411 3.3 % 2031 52,948 27.0 % 2032 18,027 9.2 % 2033 20,214 10.3 % 2034 33,886 17.3 % 2036 14,209 7.2 % 2038 34,242 17.4 % Total $ 196,326 100.0 % —% 0.8% —% —% 2.8% —% 4.8% 3.3% 27.0% 9.2% 10.3% 17.3% —% 7.2% —% 17.4% 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Tenant Purchase Options 14 Notes: [1] Excludes a purchase option on an 11 building SNF portfolio representing 2.6% of total rent. Tenant is currently not eligible to elect the option. [2] The Company has not received notice of exercise for the option periods that are currently open. [3] Option type includes: A - Fixed base price. B- Fixed capitalization rate on lease revenue. [4] Rent represents June 2023 contractual cash rent, annualized, and excludes ground lease income and the impact of any rent abatement for recent acquisitions, if applicable. Additionally, if a lease was entered into, amended or restructured subsequent to June 30, 2023, the initial or amended contractual cash rent is used. [5] Option window is only open for six months from the option period open date. [6] Option window is open until the expiration of the lease term. [7] Purchase option reflects two option types. [8] Includes one property classified as held for sale as of June 30, 2023. (dollars in thousands) As of June 30, 2023[1] Asset Type Properties Lease Expiration Option Period Open Date[2] Option Type[3] Current Cash Rent[4] % of Total Rent[4] SNF 1 March 2029 4/1/2022 [6] A / B [7] 832 0.41 % SNF / Campus 2 October 2032 1/1/2024 [5] A 1,097 [8] 0.54 % SNF 4 November 2034 12/1/2024 [6] A 3,891 1.92 % 2.87 %
Consolidated Statements of Operations 15 (amounts in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Revenues: Rental income $ 47,745 $ 46,806 $ 93,908 $ 92,813 Interest and other income 3,808 747 8,251 1,216 Total revenues 51,553 47,553 102,159 94,029 Expenses: Depreciation and amortization 12,716 12,559 24,954 26,134 Interest expense 11,040 6,303 20,867 12,045 Property taxes 1,390 1,254 2,270 2,674 Impairment of real estate investments 21,392 1,701 23,278 61,384 Provision for loan losses, net — — — 3,844 Property operating expenses 658 89 1,621 536 General and administrative 4,718 4,978 9,779 10,193 Total expenses 51,914 26,884 82,769 116,810 Other (loss) income: Gain on sale of real estate, net 2,028 — 1,958 186 Unrealized losses on other real estate related investments, net (2,151) — (2,605) — Total other (loss) income (123) — (647) 186 Net (loss) income $ (484) $ 20,669 $ 18,743 $ (22,595) (Loss) earnings per common share: Basic $ (0.01) $ 0.21 $ 0.19 $ (0.24) Diluted $ (0.01) $ 0.21 $ 0.19 $ (0.24) Weighted-average number of common shares: Basic 99,117 96,564 99,090 96,487 Diluted 99,117 96,598 99,194 96,487 Dividends declared per common share $ 0.28 $ 0.275 $ 0.56 $ 0.55
See "Glossary" for additional information. Reconciliation of EBITDA, FFO and FAD 16 (amounts in thousands) Quarter Ended June 30, 2022 Quarter Ended September 30, 2022 Quarter Ended December 31, 2022 Quarter Ended March 31, 2023 Quarter Ended June 30, 2023 Net income (loss) $ 20,669 $ 709 $ 14,380 $ 19,227 $ (484) Depreciation and amortization 12,559 12,256 11,926 12,238 12,716 Interest expense 6,303 8,355 9,608 9,827 11,040 Amortization of stock-based compensation 1,394 1,380 1,463 936 924 EBITDA 40,925 22,700 37,377 42,228 24,196 Impairment of real estate investments 1,701 12,322 5,356 1,886 21,392 Provision for doubtful accounts and lease restructuring — — 390 — — Property operating expenses 631 3,821 914 1,134 831 Loss (gain) on sale of real estate — 2,287 1,668 70 (2,028) Unrealized losses on other real estate related investments, net — 4,706 2,396 454 2,151 Normalized EBITDA $ 43,257 $ 45,836 $ 48,101 $ 45,772 $ 46,542 Net income (loss) $ 20,669 $ 709 $ 14,380 $ 19,227 $ (484) Real estate related depreciation and amortization 12,553 12,251 11,921 12,233 12,712 Impairment of real estate investments 1,701 12,322 5,356 1,886 21,392 Loss (gain) on sale of real estate — 2,287 1,668 70 (2,028) Funds from Operations (FFO) 34,923 27,569 33,325 33,416 31,592 Provision for doubtful accounts and lease restructuring — — 390 — — Property operating expenses 631 3,821 914 1,134 831 Unrealized losses on other real estate related investments, net — 4,706 2,396 454 2,151 Normalized FFO $ 35,554 $ 36,096 $ 37,025 $ 35,004 $ 34,574
[1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. See "Glossary" for additional information. Reconciliation of EBITDA, FFO and FAD (continued) 17 (amounts in thousands, except per share data) Quarter Ended June 30, 2022 Quarter Ended September 30, 2022 Quarter Ended December 31, 2022 Quarter Ended March 31, 2023 Quarter Ended June 30, 2023 Net income (loss) $ 20,669 $ 709 $ 14,380 $ 19,227 $ (484) Real estate related depreciation and amortization 12,553 12,251 11,921 12,233 12,712 Amortization of deferred financing fees 520 520 535 609 608 Amortization of stock-based compensation 1,394 1,380 1,463 936 924 Straight-line rental income (5) (3) (3) 7 7 Impairment of real estate investments 1,701 12,322 5,356 1,886 21,392 Loss (gain) on sale of real estate — 2,287 1,668 70 (2,028) Funds Available for Distribution (FAD) 36,832 29,466 35,320 34,968 33,131 Provision for doubtful accounts and lease restructuring — — 390 — — Property operating expenses 631 3,821 914 1,134 831 Unrealized losses on other real estate related investments, net — 4,706 2,396 454 2,151 Normalized FAD $ 37,463 $ 37,993 $ 39,020 $ 36,556 $ 36,113 FFO per share $ 0.36 $ 0.28 $ 0.34 $ 0.34 $ 0.32 Normalized FFO per share $ 0.37 $ 0.37 $ 0.38 $ 0.35 $ 0.35 FAD per share $ 0.38 $ 0.30 $ 0.36 $ 0.35 $ 0.33 Normalized FAD per share $ 0.39 $ 0.39 $ 0.40 $ 0.37 $ 0.36 Diluted weighted average shares outstanding [1] 96,672 96,752 97,408 99,195 99,360
Consolidated Balance Sheets 18 (amounts in thousands) June 30, 2023 December 31, 2022 Assets: Real estate investments, net $ 1,528,234 $ 1,421,410 Other real estate related investments, at fair value 166,822 156,368 Assets held for sale, net 21,554 12,291 Cash and cash equivalents 1,145 13,178 Accounts and other receivables 387 416 Prepaid expenses and other assets, net 14,029 11,690 Deferred financing costs, net 4,781 5,428 Total assets $ 1,736,952 $ 1,620,781 Liabilities and Equity: Senior unsecured notes payable, net $ 395,594 $ 395,150 Senior unsecured term loan, net 199,454 199,348 Unsecured revolving credit facility 280,000 125,000 Accounts payable, accrued liabilities and deferred rent liabilities 21,039 24,360 Dividends payable 27,843 27,550 Total liabilities 923,930 771,408 Equity: Common stock 991 990 Additional paid-in capital 1,245,717 1,245,337 Cumulative distributions in excess of earnings (433,686) (396,954) Total equity 813,022 849,373 Total liabilities and equity $ 1,736,952 $ 1,620,781
Notes: [1] Net Debt to Annualized Normalized Run Rate EBITDA compares net debt as of the last day of the quarter to Annualized Normalized Run Rate EBITDA for the quarter which assumes investments closed during the quarter occurred on the first day of the quarter. Net debt is adjusted to include the net proceeds from future expected settlement of shares sold under equity forward contracts through the Company's ATM program during the quarter. See “Financials – Quarterly Results” on the Investors section of our website at http://investor.caretrustreit.com for reconciliations of Normalized EBITDA and Normalized Run Rate EBITDA to the most directly comparable GAAP measure for the periods presented. [2] Net Debt to Enterprise Value compares net debt as of the last day of the quarter to CareTrust REIT’s Enterprise Value as of the last day of the quarter. [3] Assumes the net proceeds from the future expected settlement of shares sold under equity forward contracts through the Company's ATM program during the quarter reduces outstanding debt and assumes the shares were issued. See “Glossary” for additional information. Net Debt to Enterprise Value [2]Net Debt to Annualized Normalized Run Rate EBITDA [1] Key Debt Metrics 19 3.2 3.7 3.7 3.7 3.7 3.9 4.3 4.2 3.7 3.8 3.8 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 06/30/23 20.0% 22.1% 22.1% 25.1% 23.0% 26.6% 30.2% 30.6% 27.8% 26.2% 26.2% 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 06/30/23 [3]
Notes: [1] Funds can be borrowed at applicable SOFR plus 1.50% to 2.20% or at the Base Rate (as defined) plus 0.50% to 1.20%. [2] Funds can be borrowed at applicable SOFR plus 1.10% to 1.55% or at the Base Rate (as defined) plus 0.10% to 0.55%. [3] Maturity date assumes exercise of two, 6-month extension options. [4] Deferred financing fees are not shown net for the unsecured revolving credit facility and are included in assets on the balance sheet. Debt Maturity Schedule Debt Summary 20 — — — $200,000 — $680,000 2023 2024 2025 2026 2027 2028 Debt Maturity Year Pri nci pa l (dollars in thousands) June 30, 2023 Debt Interest Rate Maturity Date Principal % of Principal Deferred Loan Costs Net Carrying Value Fixed Rate Debt Senior unsecured notes payable 3.875 % 2028 $ 400,000 45.5 % $ (4,406) $ 395,594 Floating Rate Debt Senior unsecured term loan 6.691 % [1] 2026 200,000 22.7 % (546) 199,454 Unsecured revolving credit facility 6.299 % [2] 2028 [3] 280,000 31.8 % — [4] 280,000 6.462 % 480,000 54.5 % (546) 479,454 Total Debt 5.286 % $ 880,000 100.0 % $ (4,952) $ 875,048
Notes: [1] Represents average offering price per share for follow-on equity offerings. [2] As of June 30, 2023, CareTrust REIT had $367.2 million available for future issuances under the ATM Program. As of June 30, 2023, the Company utilized the forward provisions under the ATM Program to allow for the sale of an aggregate of 6.7 million shares of the Company’s common stock at an initial weighted average price of $19.71 per share, before commissions and offering expenses. In July 2023, the Company utilized the forward provisions under the ATM Program to allow for the sale of an aggregate of 3.8 million shares of the Company's common stock at an initial weighted average price of $19.94 per share, before commissions and offering expenses. The Company expects to settle these forward sales for net cash proceeds on or before one or more settlement dates in the second quarter of 2024. Follow-On Equity Offering Activity At-the-Market Offering Activity Equity Capital Transactions 21 2015 2016 2019 Q1 Q2 Q3 Q4 Total Number of Shares (000s) 16,330 — 9,775 — 6,325 16,100 6,641 Public Offering Price per Share $ 10.50 $ — $ 11.35 $ — $ 13.35 $ 12.14 [1] $ 23.35 Gross Proceeds (000s) $ 171,465 $ — $ 110,946 $ — $ 84,439 $ 195,385 $ 155,073 2016 2017 2018 2019 2020 2021 2022 2023[2] Q1 Q2 Total Number of Shares (000s) 924 10,574 10,265 2,459 — 990 2,405 — — — Average Price per Share $ 15.31 $ 16.43 $ 17.76 $ 19.48 $ — $ 23.74 $ 20.00 $ — $ — $ — Gross Proceeds (000s) $ 14,147 $ 173,760 $ 182,321 $ 47,893 $ — $ 23,505 $ 48,100 $ — $ — $ —
Notes: [1] Normalized FFO Payout Ratio represents dividends declared divided by Normalized FFO, in each case for the applicable quarter. [2] See “Financials - Quarterly Results” on the Investors section of our website at http://investor.caretrustreit.com for a reconciliation of Normalized FFO and Normalized FFO per Share to the most directly comparable GAAP measure for the periods presented. See Glossary for additional information. Dividend History Normalized FFO Payout Ratio [1][2] Normalized FFO per Share [2] Normalized FFO [2] (in millions) Other Financial Highlights 22 $0.250 $0.265 $0.265 $0.265 $0.265 $0.275 $0.275 $0.275 $0.275$0.280$0.280 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 06/30/23 69.4% 73.6% 71.6% 69.7% 67.9% 74.3% 74.3% 74.3% 72.4% 80.0% 80.0% 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 06/30/23 $0.36 $0.36 $0.37 $0.38 $0.39 $0.37 $0.37 $0.37 $0.38 $0.35 $0.35 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 06/30/23 $34.2 $34.1 $35.8 $36.7 $37.3 $35.9 $35.6 $36.1 $37.0 $35.0 $34.6 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 06/30/23
Funds from Operations (“FFO”) Net income, excluding gains and losses from dispositions of real estate or other real estate, before real estate depreciation and amortization and real estate impairment charges. CareTrust REIT calculates and reports FFO in accordance with the definition and interpretive guidelines issued by the National Association of Real Estate Investment Trusts.[2] CARES Act and HHS Relief Funds Provider relief funds distributed by the Department of Health and Human Services as part of the CARES act to support healthcare providers’ battle against the COVID-19 outbreak. Healthcare providers received five payments over four phases of general distributions. Does not include funds as part of Medicaid’s Federal Medical Assistance Percentage (“FMAP”), Medicare’s Sequestration “Holiday” or Paycheck Protection Program loans (“PPP”). The Employee Retention Credit ("ERTC") is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that eligible employers pay their employees. Independent Living Facilities (“ILFs”) Also known as retirement communities or senior apartments, ILFs are not healthcare facilities. ILFs typically consist of entirely self-contained apartments, complete with their own kitchens, baths and individual living spaces, as well as parking for tenant vehicles. They are most often rented unfurnished, and generally can be personalized by the tenants, typically an individual or a couple over the age of 55. These facilities offer various services and amenities such as laundry, housekeeping, dining options/meal plans, exercise and wellness programs, transportation, social, cultural and recreational activities, and on-site security. Assisted Living Facilities (“ALFs”) Licensed healthcare facilities that provide personal care services, support and housing for those who need help with daily living activities, such as bathing, eating and dressing, yet require limited medical care. The programs and services may include transportation, social activities, exercise and fitness programs, beauty or barber shop access, hobby and craft activities, community excursions, meals in a dining room setting and other activities sought by residents. These facilities are often in apartment-like buildings with private residences ranging from single rooms to large apartments. Certain ALFs may offer higher levels of personal assistance for residents requiring memory care as a result of Alzheimer’s disease or other forms of dementia. Levels of personal assistance are based in part on local regulations. EBITDA Net income before interest expense, income tax, depreciation and amortization and amortization of stock-based compensation.[1] EBITDAR Net income before interest expense, income tax, depreciation, amortization and cash rent, after applying a standardized management fee (5% of facility operating revenues). EBITDAR Coverage Aggregate EBITDAR produced by all facilities under a master lease (or other grouping) for the trailing twelve-month period ended March 31, 2023 divided by the base rent payable to CareTrust REIT under such master lease (or other grouping) for the same period; provided that if the master lease has been amended to change the base rent during or since such period, then the aggregate EBITDAR for such period is divided by the annualized monthly base rent currently in effect. EBITDAR reflects the application of a standard 5% management fee. In addition, we may exclude from coverage disclosures those facilities which are (i) classified as Held for Sale, (ii) temporarily on Special Focus Facility (SFF) status, (iii) undergoing significant renovations that necessarily result in a material reduction in occupancy, or (iv) have been acquired for or recently transferred to new operators for turnaround and are pre-stabilized. EBITDARM Earnings before interest expense, income tax, depreciation, amortization, cash rent, and a standardized management fee (5% of facility operating revenues). EBITDARM Coverage Aggregate EBITDARM produced by all facilities under a master lease (or other grouping) for the trailing twelve- month period ended March 31, 2023 divided by the base rent payable to CareTrust REIT under such master lease (or other grouping) for the same period; provided that if the master lease has been amended to change the base rent during or since such period, then the aggregate EBITDARM for such period is divided by the annualized monthly base rent currently in effect. In addition, we may exclude from coverage disclosures those facilities which are (i) classified as Held for Sale, (ii) temporarily on Special Focus Facility (SFF) status, (iii) undergoing significant renovations that necessarily result in a material reduction in occupancy, or (iv) have been acquired for or recently transferred to new operators for turnaround and are pre-stabilized. Enterprise Value Share price multiplied by the number of outstanding shares, including assumed shares issued from the ATM program, plus total outstanding debt minus cash and assumed net proceeds from the ATM program, each as of a specified date. Funds Available for Distribution (“FAD”) FFO, excluding straight-line rental income adjustments, amortization of deferred financing fees and stock-based compensation expense.[2] Glossary 23
Multi-Service Campus Facilities that include a combination of Skilled Nursing beds and Seniors Housing units, including Continuing Care Retirement Communities. Normalized EBITDA EBITDA, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, such as real estate impairment charges, provision for loan losses, provision for doubtful accounts and lease restructuring, recovery of previously reversed rent, lease termination revenue, property operating expenses, non- routine transaction costs, loss on extinguishment of debt, unrealized loss on other real estate related investments and gains or losses from dispositions of real estate or other real estate.[1] Normalized FAD FAD, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, such as provision for loan losses, provision for doubtful accounts and lease restructuring, effect of the senior unsecured notes payable redemption, recovery of previously reversed rent, lease termination revenue, non- routine transaction costs, loss on extinguishment of debt, unrealized loss on other real estate related investments and property operating expenses.[2] Normalized FFO FFO, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, such as provision for loan losses, provision for doubtful accounts and lease restructuring, effect of the senior unsecured notes payable redemption, recovery of previously reversed rent, lease termination revenue, accelerated amortization of stock-based compensation, non-routine transaction costs, loss on extinguishment of debt, unrealized loss on other real estate related investments and property operating expenses.[2] Seniors Housing Includes ALFs, ILFs, dedicated memory care facilities and similar facilities. Skilled Nursing or Skilled Nursing Facilities (“SNFs”) Licensed healthcare facilities that provide restorative, rehabilitative and nursing care for people not requiring the more extensive and sophisticated treatment available at an acute care hospital or long-term acute care hospital. Treatment programs include physical, occupational, speech, respiratory, ventilator, and wound therapy. Notes: [1] EBITDA and Normalized EBITDA do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. EBITDA and Normalized EBITDA do not purport to be indicative of cash available to fund future cash requirements, including the Company’s ability to fund capital expenditures or make payments on its indebtedness. Further, the Company’s computation of EBITDA and Normalized EBITDA may not be comparable to EBITDA and Normalized EBITDA reported by other REITs. [2] CareTrust REIT believes FAD, FFO, Normalized FAD, and Normalized FFO (and their related per-share amounts) are important non-GAAP supplemental measures of its operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time, even though real estate values have historically risen or fallen with market and other conditions. Moreover, by excluding items not indicative of ongoing results, Normalized FAD and Normalized FFO can facilitate meaningful comparisons of operating performance between periods and between other companies. However, FAD, FFO, Normalized FAD, and Normalized FFO (and their related per-share amounts) do not represent cash flows from operations or net income attributable to shareholders as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. Glossary 24
