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): November 8, 2022
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 November 8, 2022, CareTrust REIT, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2022. 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 third quarter ended September 30, 2022 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 November 8, 2022 |
| 99.2 | Supplemental financial information for the quarter ended September 30, 2022 |
| 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: November 8, 2022 | CARETRUST REIT, INC. | |
|---|---|---|
| By: | /s/ William M. Wagner | |
| William M. Wagner | ||
| Chief Financial Officer and Treasurer |
Document
Exhibit 99.1
CareTrust REIT Announces Third Quarter 2022 Operating Results
Conference Call Scheduled for Wednesday, November 9, 2022 at 1:00 pm ET
SAN CLEMENTE, Calif., November 8, 2022 (BUSINESS WIRE) -- CareTrust REIT, Inc. (NYSE:CTRE) today reported operating results for the quarter ended September 30, 2022, as well as other recent events.
For the quarter, CareTrust REIT reported:
•93.4% of contractual rents collected;
•Net income of $0.7 million and net income per share of $0.01;
•Normalized FFO of $36.1 million and normalized FFO per share of $0.37;
•Normalized FAD of $38.0 million and normalized FAD per share of $0.39; and
•A quarterly dividend of $0.275 per share, representing a payout ratio of approximately 71% on normalized FAD.
Operating Environment
CareTrust’s President and Chief Executive Officer, Dave Sedgwick, discussed the business environment and the Company's Q3 results. “Healthcare has traditionally been a hedge against downturns. Recessionary pressures, historically, have provided a net-benefit for our operators as demand and pricing for their services is unchanged while tight labor markets tend to loosen. Today, the tight debt market is also causing sellers to prioritize transactional partners like us who present more certainty to close,” Mr. Sedgwick said. Turning to the quarter, Mr. Sedgwick said, “Given the macroeconomic conditions, we are pleased to report both stable portfolio lease coverage and significant progress on the portfolio optimization plan for the year with the sale of the Trio skilled nursing portfolio in September.”
Key Metrics and Operator Conference
Looking at the quarter, Mr. Sedgwick commented on rent and occupancy data. He said, “We collected approximately 93% of contractual rents, including cash deposits, in the quarter.” He added that average quarterly occupancy for skilled nursing operators grew by 0.7%, or 53 basis points, over Q2. And, for seniors housing, occupancy grew 1.7%, or 131 basis points. “All things considered, Q3 was a good quarter for us and Q4 started off much the same,” Mr. Sedgwick said.
The Company recently hosted its Operator Conference to facilitate best practice sharing and operating expertise. Commenting on the conference, Mr. Sedgwick said, “I had a few major takeaways from the conference. First, we have chosen to support some of the most elite operators in the country. Second, we are deeply grateful for the leadership, sacrifices, and difference our operators are making in the communities they serve. And third, assuming the deals that cross our desk are actionable, we are poised to expand existing relationships and to back new operators next year.”
Portfolio
James Callister, Executive Vice President, provided an update on the portfolio optimization work this year. “We are pleased to report progress on this year’s portfolio repositioning plan with the sale of the Trio skilled nursing portfolio for $52 million,” he said. He noted that the Company’s seniors housing properties held for sale continue to make progress towards either disposition or re-tenanting.
With regards to new investments, during the quarter, the Company funded a $22.3 million B-piece secured financing on a 5-asset skilled nursing portfolio located in California. The portfolio includes approximately 600 skilled nursing beds.
The Company also funded a $24.9 million B-piece secured financing on a 4-asset skilled nursing portfolio located in the Southeast. The portfolio includes approximately 700 skilled nursing beds. “This debt investment provided an opportunity to forge a new relationship with a Southeast operator with whom we expect to grow through asset acquisitions in the future,” Mr. Callister said.
Pipeline
The Company’s Chief Investment Officer, Mark Lamb, commented on the current market for acquisitions and the Company’s pipeline. He said, “The rising cost of debt is impacting many potential buyers and we’re seeing sellers and brokers prioritize certainty more than ever before. We believe this to be a primary driver for the increase in deals crossing our desk.” Mr. Lamb continued, “As usual, sellers' pricing expectations haven’t moved as quickly as buyers’ and we are in a window of price discovery today. We are open for business heading into 2023 and are working with current and future operators to continue our history of disciplined growth.”
Financial Results for Quarter Ended September 30, 2022
Chief Financial Officer, Bill Wagner, reported that, for the third quarter, CareTrust reported net income of $0.7 million, or $0.01 per diluted weighted-average common share, normalized FFO of $36.1 million, or $0.37 per diluted weighted-average common share, and normalized FAD of $38.0 million, or $0.39 per diluted weighted-average common share.
Liquidity
As of quarter end, CareTrust reported net debt-to-annualized normalized run rate EBITDA of 4.2x, which is within the Company's target leverage range of 4.0x to 5.0x, and a net debt-to-enterprise value of approximately 30.6%. Mr. Wagner stated that as of today, the Company had approximately $195 million outstanding on its $600 million revolving credit line, with no scheduled debt maturities prior to 2024. He also disclosed that CareTrust currently has approximately $19 million in cash on hand. He further noted that the Company currently has approximately $476.5 million in available authorization remaining on its at-the-market equity program. "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 $0.275 per common share. On an annualized basis, the payout ratio was approximately 74% based on third quarter 2022 normalized FFO, and 71% based on normalized FAD.
Conference Call
A conference call will be held on Wednesday, November 9, 2022, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time), during which CareTrust’s management will discuss third quarter 2022 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 plans to sell, re-tenant or repurpose selected Company assets, the Company's planned expansion into behavioral health properties and acquisition 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; (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, 2021, including in the section entitled “Risk Factors” in Item 1A of Part I of such report, 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 September 30, 2022 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. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Revenues: | ||||||||||
| Rental income | $ | 47,018 | $ | 48,087 | $ | 139,831 | $ | 141,077 | ||
| Interest and other income | 3,275 | 518 | 4,491 | 1,537 | ||||||
| Total revenues | 50,293 | 48,605 | 144,322 | 142,614 | ||||||
| Expenses: | ||||||||||
| Depreciation and amortization | 12,256 | 13,968 | 38,390 | 41,284 | ||||||
| Interest expense | 8,355 | 5,692 | 20,400 | 17,988 | ||||||
| Property taxes | 691 | 1,004 | 3,365 | 2,466 | ||||||
| Impairment of real estate investments | 12,322 | — | 73,706 | — | ||||||
| Provision for loan losses, net | — | — | 3,844 | — | ||||||
| Property operating expenses | 3,808 | — | 4,344 | — | ||||||
| General and administrative | 5,159 | 5,196 | 15,352 | 16,136 | ||||||
| Total expenses | 42,591 | 25,860 | 159,401 | 77,874 | ||||||
| Other loss: | ||||||||||
| Loss on extinguishment of debt | — | (10,827) | — | (10,827) | ||||||
| Loss on sale of real estate, net | (2,287) | — | (2,101) | (192) | ||||||
| Unrealized loss on other real estate related investments | (4,706) | — | (4,706) | — | ||||||
| Total other loss | (6,993) | (10,827) | (6,807) | (11,019) | ||||||
| Net income (loss) | $ | 709 | $ | 11,918 | $ | (21,886) | $ | 53,721 | ||
| Earnings (loss) per common share: | ||||||||||
| Basic | $ | 0.01 | $ | 0.12 | $ | (0.23) | $ | 0.56 | ||
| Diluted | $ | 0.01 | $ | 0.12 | $ | (0.23) | $ | 0.56 | ||
| Weighted-average number of common shares: | ||||||||||
| Basic | 96,605 | 96,297 | 96,527 | 95,922 | ||||||
| Diluted | 96,625 | 96,297 | 96,527 | 95,937 | ||||||
| Dividends declared per common share | $ | 0.275 | $ | 0.265 | $ | 0.825 | $ | 0.795 | ||
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES | ||||||||||
| (in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Net income (loss) | $ | 709 | $ | 11,918 | $ | (21,886) | $ | 53,721 | ||
| Depreciation and amortization | 12,256 | 13,968 | 38,390 | 41,284 | ||||||
| Interest expense | 8,355 | 5,692 | 20,400 | 17,988 | ||||||
| Amortization of stock-based compensation | 1,380 | 1,802 | 4,295 | 5,197 | ||||||
| EBITDA | 22,700 | 33,380 | 41,199 | 118,190 | ||||||
| Impairment of real estate investments | 12,322 | — | 73,706 | — | ||||||
| Provision for loan losses, net | — | — | 3,844 | — | ||||||
| Provision for doubtful accounts and lease restructuring | — | — | 977 | — | ||||||
| Lease termination revenue | — | — | — | (63) | ||||||
| Property operating expenses | 3,821 | — | 5,683 | — | ||||||
| Loss on sale of real estate, net | 2,287 | — | 2,101 | 192 | ||||||
| Loss on extinguishment of debt | — | 10,827 | — | 10,827 | ||||||
| Unrealized loss on other real estate related investments | 4,706 | — | 4,706 | — | ||||||
| Normalized EBITDA | $ | 45,836 | $ | 44,207 | $ | 132,216 | $ | 129,146 | ||
| Net income (loss) | $ | 709 | $ | 11,918 | $ | (21,886) | $ | 53,721 | ||
| Real estate related depreciation and amortization | 12,251 | 13,964 | 38,375 | 41,267 | ||||||
| Impairment of real estate investments | 12,322 | — | 73,706 | — | ||||||
| Loss on sale of real estate, net | 2,287 | — | 2,101 | 192 | ||||||
| Funds from Operations (FFO) | 27,569 | 25,882 | 92,296 | 95,180 | ||||||
| Effect of the senior unsecured notes payable redemption | — | — | — | 642 | ||||||
| Provision for loan losses, net | — | — | 3,844 | — | ||||||
| Provision for doubtful accounts and lease restructuring | — | — | 977 | — | ||||||
| Lease termination revenue | — | — | — | (63) | ||||||
| Property operating expenses | 3,821 | — | 5,683 | — | ||||||
| Loss on extinguishment of debt | — | 10,827 | — | 10,827 | ||||||
| Unrealized loss on other real estate related investments | 4,706 | — | 4,706 | — | ||||||
| Normalized FFO | $ | 36,096 | $ | 36,709 | $ | 107,506 | $ | 106,586 | ||
| CARETRUST REIT, INC. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES (continued) | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Net income (loss) | $ | 709 | $ | 11,918 | $ | (21,886) | $ | 53,721 | ||
| Real estate related depreciation and amortization | 12,251 | 13,964 | 38,375 | 41,267 | ||||||
| Amortization of deferred financing fees | 520 | 519 | 1,560 | 1,501 | ||||||
| Amortization of stock-based compensation | 1,380 | 1,802 | 4,295 | 5,197 | ||||||
| Straight-line rental income | (3) | (6) | (14) | (26) | ||||||
| Impairment of real estate investments | 12,322 | — | 73,706 | — | ||||||
| Loss on sale of real estate, net | 2,287 | — | 2,101 | 192 | ||||||
| Funds Available for Distribution (FAD) | 29,466 | 28,197 | 98,137 | 101,852 | ||||||
| Effect of the senior unsecured notes payable redemption | — | — | — | 642 | ||||||
| Provision for loan losses, net | — | — | 3,844 | — | ||||||
| Provision for doubtful accounts and lease restructuring | — | — | 977 | — | ||||||
| Lease termination revenue | — | — | — | (63) | ||||||
| Property operating expenses | 3,821 | — | 5,683 | — | ||||||
| Loss on extinguishment of debt | — | 10,827 | — | 10,827 | ||||||
| Unrealized loss on other real estate related investments | 4,706 | — | 4,706 | — | ||||||
| Normalized FAD | $ | 37,993 | $ | 39,024 | $ | 113,347 | $ | 113,258 | ||
| FFO per share | $ | 0.28 | $ | 0.27 | $ | 0.95 | $ | 0.99 | ||
| Normalized FFO per share | $ | 0.37 | $ | 0.38 | $ | 1.11 | $ | 1.11 | ||
| FAD per share | $ | 0.30 | $ | 0.29 | $ | 1.01 | $ | 1.06 | ||
| Normalized FAD per share | $ | 0.39 | $ | 0.40 | $ | 1.17 | $ | 1.18 | ||
| Diluted weighted average shares outstanding [1] | 96,752 | 96,592 | 96,709 | 96,196 | ||||||
| [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 | ||||||
| September 30, 2021 | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | ||||||
| Revenues: | ||||||||||
| Rental income | $ | 48,087 | $ | 49,118 | $ | 46,007 | $ | 46,806 | $ | 47,018 |
| Interest and other income | 518 | 619 | 469 | 747 | 3,275 | |||||
| Total revenues | 48,605 | 49,737 | 46,476 | 47,553 | 50,293 | |||||
| Expenses: | ||||||||||
| Depreciation and amortization | 13,968 | 14,056 | 13,575 | 12,559 | 12,256 | |||||
| Interest expense | 5,692 | 5,689 | 5,742 | 6,303 | 8,355 | |||||
| Property taxes | 1,004 | 1,108 | 1,420 | 1,254 | 691 | |||||
| Impairment of real estate investments | — | — | 59,683 | 1,701 | 12,322 | |||||
| Provision for loan losses, net | — | — | 3,844 | — | — | |||||
| Property operating expenses | — | — | 447 | 89 | 3,808 | |||||
| General and administrative | 5,196 | 10,738 | 5,215 | 4,978 | 5,159 | |||||
| Total expenses | 25,860 | 31,591 | 89,926 | 26,884 | 42,591 | |||||
| Other (loss) income: | ||||||||||
| Loss on extinguishment of debt | (10,827) | — | — | — | — | |||||
| Gain (loss) on sale of real estate | — | 115 | 186 | — | (2,287) | |||||
| Unrealized loss on other real estate related investments | — | — | — | — | (4,706) | |||||
| Total other (loss) income | (10,827) | 115 | 186 | — | (6,993) | |||||
| Net income (loss) | $ | 11,918 | $ | 18,261 | $ | (43,264) | $ | 20,669 | $ | 709 |
| Diluted earnings (loss) per share | $ | 0.12 | $ | 0.19 | $ | (0.45) | $ | 0.21 | $ | 0.01 |
| Diluted weighted average shares outstanding | 96,297 | 96,552 | 96,410 | 96,598 | 96,625 | |||||
| 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 | ||||||
| September 30, 2021 | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | ||||||
| Net income (loss) | $ | 11,918 | $ | 18,261 | $ | (43,264) | $ | 20,669 | $ | 709 |
| Depreciation and amortization | 13,968 | 14,056 | 13,575 | 12,559 | 12,256 | |||||
| Interest expense | 5,692 | 5,689 | 5,742 | 6,303 | 8,355 | |||||
| Amortization of stock-based compensation | 1,802 | 5,635 | 1,521 | 1,394 | 1,380 | |||||
| EBITDA | 33,380 | 43,641 | (22,426) | 40,925 | 22,700 | |||||
| Impairment of real estate investments | — | — | 59,683 | 1,701 | 12,322 | |||||
| Provision for loan losses, net | — | — | 3,844 | — | — | |||||
| Provision for doubtful accounts and lease restructuring | — | — | 977 | — | — | |||||
| Property operating expenses | — | 8 | 1,231 | 631 | 3,821 | |||||
| (Gain) loss on sale of real estate | — | (115) | (186) | — | 2,287 | |||||
| Non-routine transaction costs | — | 1,418 | — | — | — | |||||
| Loss on extinguishment of debt | 10,827 | — | — | — | — | |||||
| Unrealized loss on other real estate related investments | — | — | — | — | 4,706 | |||||
| Normalized EBITDA | $ | 44,207 | $ | 44,952 | $ | 43,123 | $ | 43,257 | $ | 45,836 |
| Net income (loss) | $ | 11,918 | $ | 18,261 | $ | (43,264) | $ | 20,669 | $ | 709 |
| Real estate related depreciation and amortization | 13,964 | 14,051 | 13,571 | 12,553 | 12,251 | |||||
| Impairment of real estate investments | — | — | 59,683 | 1,701 | 12,322 | |||||
| (Gain) loss on sale of real estate | — | (115) | (186) | — | 2,287 | |||||
| Funds from Operations (FFO) | 25,882 | 32,197 | 29,804 | 34,923 | 27,569 | |||||
| Provision for loan losses, net | — | — | 3,844 | — | — | |||||
| Provision for doubtful accounts and lease restructuring | — | — | 977 | — | — | |||||
| Property operating expenses | — | 8 | 1,231 | 631 | 3,821 | |||||
| Accelerated amortization of stock-based compensation | — | 3,696 | — | — | — | |||||
| Non-routine transaction costs | — | 1,418 | — | — | — | |||||
| Loss on extinguishment of debt | 10,827 | — | — | — | — | |||||
| Unrealized loss on other real estate related investments | — | — | — | — | 4,706 | |||||
| Normalized FFO | $ | 36,709 | $ | 37,319 | $ | 35,856 | $ | 35,554 | $ | 36,096 |
| 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 | ||||||
| September 30, 2021 | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | ||||||
| Net income (loss) | $ | 11,918 | $ | 18,261 | $ | (43,264) | $ | 20,669 | $ | 709 |
| Real estate related depreciation and amortization | 13,964 | 14,051 | 13,571 | 12,553 | 12,251 | |||||
| Amortization of deferred financing fees | 519 | 521 | 520 | 520 | 520 | |||||
| Amortization of stock-based compensation | 1,802 | 5,635 | 1,521 | 1,394 | 1,380 | |||||
| Straight-line rental income | (6) | (6) | (6) | (5) | (3) | |||||
| Impairment of real estate investments | — | — | 59,683 | 1,701 | 12,322 | |||||
| (Gain) loss on sale of real estate | — | (115) | (186) | — | 2,287 | |||||
| Funds Available for Distribution (FAD) | 28,197 | 38,347 | 31,839 | 36,832 | 29,466 | |||||
| Provision for loan losses, net | — | — | 3,844 | — | — | |||||
| Provision for doubtful accounts and lease restructuring | — | — | 977 | — | — | |||||
| Property operating expenses | — | 8 | 1,231 | 631 | 3,821 | |||||
| Non-routine transaction costs | — | 1,418 | — | — | — | |||||
| Loss on extinguishment of debt | 10,827 | — | — | — | — | |||||
| Unrealized loss on other real estate related investments | — | — | — | — | 4,706 | |||||
| Normalized FAD | $ | 39,024 | $ | 39,773 | $ | 37,891 | $ | 37,463 | $ | 37,993 |
| FFO per share | $ | 0.27 | $ | 0.33 | $ | 0.31 | $ | 0.36 | $ | 0.28 |
| Normalized FFO per share | $ | 0.38 | $ | 0.39 | $ | 0.37 | $ | 0.37 | $ | 0.37 |
| FAD per share | $ | 0.29 | $ | 0.40 | $ | 0.33 | $ | 0.38 | $ | 0.30 |
| Normalized FAD per share | $ | 0.40 | $ | 0.41 | $ | 0.39 | $ | 0.39 | $ | 0.39 |
| Diluted weighted average shares outstanding [1] | 96,592 | 96,646 | 96,701 | 96,672 | 96,752 | |||||
| [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) | ||||||||||
| September 30, 2022 | December 31, 2021 | |||||||||
| Assets: | ||||||||||
| Real estate investments, net | $ | 1,384,166 | $ | 1,589,971 | ||||||
| Other real estate related investments, at fair value (including accrued interest of 1,218 as of September 30, 2022 and 155 as of December 31, 2021) | 158,662 | 15,155 | ||||||||
| Assets held for sale, net | 77,708 | 4,835 | ||||||||
| Cash and cash equivalents | 4,861 | 19,895 | ||||||||
| Accounts and other receivables | 808 | 2,418 | ||||||||
| Prepaid expenses and other assets, net | 19,046 | 7,512 | ||||||||
| Deferred financing costs, net | 327 | 1,062 | ||||||||
| $ | 1,645,578 | $ | 1,640,848 | |||||||
| Liabilities and Equity: | ||||||||||
| Senior unsecured notes payable, net | $ | 394,928 | $ | 394,262 | ||||||
| Senior unsecured term loan, net | 199,295 | 199,136 | ||||||||
| Unsecured revolving credit facility | 180,000 | 80,000 | ||||||||
| Accounts payable, accrued liabilities and deferred rent liabilities | 30,851 | 25,408 | ||||||||
| Dividends payable | 26,827 | 26,285 | ||||||||
| 831,901 | 725,091 | |||||||||
| Equity: | ||||||||||
| Common stock | 966 | 963 | ||||||||
| Additional paid-in capital | 1,196,662 | 1,196,839 | ||||||||
| Cumulative distributions in excess of earnings | (383,951) | (282,045) | ||||||||
| 813,677 | 915,757 | |||||||||
| $ | 1,645,578 | $ | 1,640,848 |
All values are in US Dollars.
| CARETRUST REIT, INC. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| (in thousands) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| For the Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net (loss) income | $ | (21,886) | $ | 53,721 | ||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization (including below-market ground leases) | 38,437 | 41,328 | ||||||||||||
| Amortization of deferred financing costs | 1,560 | 1,531 | ||||||||||||
| Loss on extinguishment of debt | — | 10,827 | ||||||||||||
| Unrealized loss on other real estate related investments | 4,706 | — | ||||||||||||
| Amortization of stock-based compensation | 4,295 | 5,197 | ||||||||||||
| Straight-line rental income | (14) | (26) | ||||||||||||
| Adjustment for collectibility of rental income | 977 | — | ||||||||||||
| Noncash interest income | (1,063) | — | ||||||||||||
| Loss on sale of real estate, net | 2,101 | 192 | ||||||||||||
| Impairment of real estate investments | 73,706 | — | ||||||||||||
| Provision for loan losses, net | 3,844 | — | ||||||||||||
| Change in operating assets and liabilities: | ||||||||||||||
| Accounts and other receivables | 648 | (1,775) | ||||||||||||
| Prepaid expenses and other assets, net | (2,082) | (20) | ||||||||||||
| Accounts payable, accrued liabilities and deferred rent liabilities | 5,443 | 7,388 | ||||||||||||
| Net cash provided by operating activities | 110,672 | 118,363 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Acquisitions of real estate, net of deposits applied | (21,915) | (180,323) | ||||||||||||
| Purchases of equipment, furniture and fixtures and improvements to real estate | (5,475) | (4,826) | ||||||||||||
| Investment in real estate related investments and other loans receivable | (149,650) | (700) | ||||||||||||
| Principal payments received on other loans receivable | 1,166 | 172 | ||||||||||||
| Escrow deposits for potential acquisitions of real estate | — | (3,100) | ||||||||||||
| Net proceeds from sales of real estate | 34,115 | 6,814 | ||||||||||||
| Net cash used in investing activities | (141,759) | (181,963) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from the issuance of common stock, net | — | 22,946 | ||||||||||||
| Proceeds from the issuance of senior unsecured notes payable | — | 400,000 | ||||||||||||
| Borrowings under unsecured revolving credit facility | 145,000 | 220,000 | ||||||||||||
| Payments on senior unsecured notes payable | — | (300,000) | ||||||||||||
| Payments on unsecured revolving credit facility | (45,000) | (190,000) | ||||||||||||
| Payments on debt extinguishment and deferred financing costs | — | (14,070) | ||||||||||||
| Net-settle adjustment on restricted stock | (4,469) | (1,331) | ||||||||||||
| Dividends paid on common stock | (79,478) | (75,148) | ||||||||||||
| Net cash provided by financing activities | 16,053 | 62,397 | ||||||||||||
| Net decrease in cash and cash equivalents | (15,034) | (1,203) | ||||||||||||
| Cash and cash equivalents as of the beginning of period | 19,895 | 18,919 | ||||||||||||
| Cash and cash equivalents as of the end of period | $ | 4,861 | $ | 17,716 | ||||||||||
| CARETRUST REIT, INC. | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| DEBT SUMMARY | ||||||||||||||
| (dollars in thousands) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| September 30, 2022 | ||||||||||||||
| 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 | 51.3 | % | $ | (5,072) | $ | 394,928 | |||
| Floating Rate Debt | ||||||||||||||
| Senior unsecured term loan | 4.715 | % | [1] | 2026 | 200,000 | 25.6 | % | (705) | 199,295 | |||||
| Unsecured revolving credit facility | 4.261 | % | [2] | 2024 | [3] | 180,000 | 23.1 | % | — | [4] | 180,000 | |||
| 4.500 | % | 380,000 | 48.7 | % | (705) | 379,295 | ||||||||
| Total Debt | 4.179 | % | $ | 780,000 | 100.0 | % | $ | (5,777) | $ | 774,223 | ||||
| [1] Funds can be borrowed at applicable LIBOR 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 LIBOR 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-ctreq32022fin
Financial Supplement Third Quarter 2022 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 our intent, belief or expectations, including, but not limited to, statements regarding future financial and financing plans, business and acquisition strategies, 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; (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, 2021, including in the section entitled “Risk Factors” in Item 1A of Part I of such report, 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 September 30, 2022 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 CARETRUST SNAPSHOT 05 INVESTMENTS 06 PORTFOLIO OVERVIEW 07-13 Top 10 Tenants Lease Coverage Portfolio Performance Rent Diversification by Tenant Geographic Diversification Rent Diversification by State Lease Maturities Tenant Purchase Options FINANCIAL OVERVIEW 14-21 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 22-23
Company Profile MANAGEMENT Dave Sedgwick – President & Chief Executive Officer Bill Wagner - Chief Financial Officer Mark Lamb - Chief Investment Officer James Callister - Executive Vice President 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 September 30, 2022, CareTrust REIT has expanded its tenant roster to 18 operators, and has grown its real estate portfolio to 198 net-leased healthcare properties across 21 states, consisting of 21,505 operating beds/units, excluding 19 properties classified as held for sale as of September 30, 2022, two facilities which are in the process of being repurposed and two that are non- operational. As of September 30, 2022, CareTrust REIT also had three secured loans receivable and two mezzanine loans receivable. BOARD OF DIRECTORS Diana Laing - Chair Anne Olson Spencer Plumb Careina Williams Dave Sedgwick ANALYST COVERAGE* Baird - David Rogers | (216) 737-7341 Barclays - Steve Valiquette | (212) 526-5496 BMO Capital Markets - Juan Sanabria | (312) 845-4074 CapitalOne Securities - Dan Bernstein | (571) 835-7202 Credit Suisse - Tayo Okusanya | (212) 325-1402 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 * This information is provided as of November 8, 2022. 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 September 30, 2022) ◦ Closing Price: $18.11 ◦ 52 Week Range: $23.59 – $15.90 ◦ Market Cap: $1,757M ◦ Enterprise Value: $2,532M ◦ Outstanding Shares: 97.029M 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 $1,752.3M INVESTMENTS 198 PROPERTIES 21,505 OPERATING BEDS/UNITS 18 OPERATORS 21 STATES Note: Portfolio amounts presented above are as of September 30, 2022 and exclude our three secured loans receivable and two mezzanine loans receivable. Additionally, amounts exclude 19 properties classified as held for sale as of September 30, 2022, 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 pre-spin properties represents Ensign's and Pennant's gross book value. Initial Investment for post-spin properties 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] Initial yield on the senior secured term loan is 8.5% less a 0.125% subservicing fee. [7] Initial yield based on term secured overnight financing rate, with a floor of approximately 8.5% less a subservicing fee of 50% over 8.25%. [8] Initial yield based on term secured overnight financing rate, with a floor of approximately 9.0% less a subservicing fee of 100% over 9.00%. 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 % 2/1/2022 Eduro Healthcare, LLC SNF TX 1 8,918 135 815 9.1 % 3/1/2022 WLC Management Firm, LLC SNF Campus IL 1 13,095 130 1,235 9.4 % 6/30/2022 Senior Secured Loan SNF, SNF Campus Mid-Atlantic 18 75,000 1,796 6,281 8.4 % [6] 6/30/2022 Mezzanine Loan SNF, SNF Campus Mid-Atlantic N/A 25,000 N/A 2,750 11.0 % 8/1/2022 Secured Loan SNF CA 5 22,250 600 1,891 8.5 % [7] 9/8/2022 Secured Loan SNF GA 4 24,900 690 2,241 9.0 % [8] 2022 Investments 29 169,163 3,351 15,213 9.0 % Total Post Spin-off Investments[5] 192 1,788,305 18,131 157,260 8.9 % Total Investments[5] 286 $ 2,289,978 28,184 $ 213,260
Notes: [1] Lease Coverage excludes 19 properties classified as held for sale as of September 30, 2022, 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 received and retained to date, if any. [5] Coverage metrics in this section include all known HHS Relief Funds received and retained as reported to us through November 1, 2022, 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. [6] No coverage metrics were received 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] 07 Twelve Months Ended March 31, 2020 Twelve Months Ended June 30, 2022 Twelve Months Ended June 30, 2022 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 3.36x 4.17x 3.36x 4.17x 2 Priority Management Group 1.50x 1.81x 1.30x 1.60x 1.50x 1.81x 3 Cascadia Healthcare 1.61x 2.07x 1.92x 2.39x 2.08x 2.57x 4 Providence Group 1.03x 1.45x 1.70x 2.27x 1.83x 2.41x 5 Eduro Healthcare, LLC 1.17x 1.65x 1.66x 2.18x 1.93x 2.46x 6 Covenant Care 1.37x 1.94x 0.67x 1.23x 0.78x 1.34x 7 The Pennant Group[3] 1.27x 1.48x 0.72x 0.90x 0.72x 0.90x 8 Bayshire Senior Communities[6] 1.32x 1.60x 0.71x 1.07x 0.71x 1.08x 9 WLC Management 2.15x 2.59x 1.32x 1.77x 1.68x 2.14x 10 Aspen Senior Living[6] — — 0.44x 0.68x 0.44x 0.69x Total Top 10 Tenants 2.12x 2.67x 2.13x 2.70x 2.22x 2.79x All Other Tenants 1.01x 1.44x 1.11x 1.57x 1.36x 1.84x Total 2.00x 2.54x 2.02x 2.58x 2.13x 2.70x
Portfolio Performance 08 Notes: [1] Investment for pre-spin properties represents Ensign's and Pennant's gross book value. Investment for post-spin properties represents CareTrust REIT's cumulative capital investment. Capital investment includes purchase price, transaction costs and landlord-funded capital expenditures, if any. [2] Rent represents September 2022 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to September 30, 2022, the initial or amended contractual cash rent is used. [3] Current Yield represents Rent divided by Investment. [4] All amounts exclude our three secured loans receivable and two mezzanine loans receivable. Additionally, amounts exclude 19 properties classified as held for sale as of September 30, 2022, two facilities which are in the process of being repurposed and two that are non-operational. [5] 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, the initial or amended contractual cash rent is used. [6] 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 in the process of being repurposed. [7] Rent represents September 2021 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to September 30, 2021, the initial or amended contractual cash rent is used. [8] All amounts exclude our one mezzanine loan receivable as of September 30, 2021. Additionally, amounts exclude one property classified as held for sale as of September 30, 2021. See “Glossary” for additional information. (dollars in thousands) As of September 30, 2022 Asset Type Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[2] % of Total Rent Current Yield[3] Skilled Nursing 154 16,193 $ 1,299,763 74.2 % $ 135,363 75.5 % 10.4 % Multi-Service Campus 24 3,466 363,306 20.7 % 31,833 17.7 % 8.8 % Seniors Housing 20 1,846 89,218 5.1 % 12,194 6.8 % 13.7 % Total Net-Leased Assets[4] 198 21,505 $ 1,752,287 100.0 % $ 179,390 100.0 % 10.2 % (dollars in thousands) As of June 30, 2022 Asset Type Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[5] % 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[6] 198 21,537 $ 1,753,672 100.0 % $ 178,964 100.0 % 10.2 % (dollars in thousands) As of September 30, 2021 Asset Type Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[7] % of Total Rent Current Yield[3] Skilled Nursing 160 16,614 $ 1,351,596 68.6 % $ 134,139 70.6 % 9.9 % Multi-Service Campus 24 3,608 376,933 19.1 % 30,917 16.3 % 8.2 % Seniors Housing 40 3,199 241,147 12.3 % 24,925 13.1 % 10.3 % Total Net-Leased Assets[8] 224 23,421 $ 1,969,676 100.0 % $ 189,981 100.0 % 9.6 %
Rent Diversification by Tenant 09 Notes: [1] All amounts exclude our three secured loans receivable and two mezzanine loans receivable. Additionally, amounts exclude 19 properties classified as held for sale as of September 30, 2022, two facilities which are in the process of being repurposed and two that are non-operational. [2] Rent represents September 2022 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to September 30, 2022, the initial or amended contractual cash rent is used. (dollars in thousands) As of September 30, 2022[1] Facilities Operating Beds/Units Rent[2] % of Total Rent 1 The Ensign Group 98 10,399 $ 66,078 36.8 % 2 Priority Management Group 15 2,144 29,214 16.3 % 3 Cascadia Healthcare 12 1,053 12,329 6.9 % 4 Providence Group 8 1,044 10,638 5.9 % 5 Eduro Healthcare, LLC 9 990 9,315 5.2 % Total Top 5 Tenants 142 15,630 $ 127,574 71.1 % 6 Covenant Care 7 935 8,555 4.8 % 7 The Pennant Group 8 913 7,098 4.0 % 8 Bayshire Senior Communities 5 596 6,462 3.6 % 9 WLC Management 9 919 6,293 3.5 % 10 Aspen Senior Living 2 319 5,640 3.1 % Total Top 10 Tenants 173 19,312 $ 161,622 90.1 % All Other Tenants 25 2,193 $ 17,768 9.9 % Total 198 21,505 $ 179,390 100.0 %
Geographic Diversification (% of run-rate rent) 10 * Less than 1%. Note: Numbers are as of September 30, 2022 and exclude our three secured loans receivable and two mezzanine loans receivable. Additionally, amounts exclude 19 properties classified as held for sale as of September 30, 2022, two facilities which are in the process of being repurposed and two that are non-operational. 7% * 28% 23% 10% 8% 7% 4% 4% 3% 3% 3% 2%1% 1% 1% 1% 1% * * * * *
Rent Diversification by State 11 Notes: [1] All amounts exclude our three secured loans receivable and two mezzanine loans receivable. Additionally, amounts exclude 19 properties classified as held for sale as of September 30, 2022, two facilities which are in the process of being repurposed and two that are non-operational. [2] Rent represents September 2022 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to September 30, 2022, the initial or amended contractual cash rent is used. (dollars in thousands) As of September 30, 2022[1] Net-Leased Assets by State Facilities Operating Beds/Units Rent[2] % of Total Rent 1 California 40 4,844 $ 49,655 27.7 % 2 Texas 43 5,597 40,733 22.7 % 3 Louisiana 8 1,164 17,172 9.6 % 4 Idaho 17 1,474 14,611 8.1 % 5 Arizona 11 1,340 13,102 7.3 % Top 5 States 119 14,419 $ 135,273 75.4 % 6 Utah 13 1,374 7,662 4.3 % 7 Illinois 9 919 6,293 3.5 % 8 Colorado 7 779 5,826 3.2 % 9 Iowa 15 970 5,151 2.9 % 10 Washington 10 936 4,823 2.7 % Top 10 States 173 19,397 $ 165,028 92.0 % All Other States 25 2,108 $ 14,362 8.0 % Total 198 21,505 $ 179,390 100.0 %
Lease Maturities 12 Notes: [1] All amounts exclude our three secured loans receivable and two mezzanine loans receivable. Additionally, amounts exclude 19 properties classified as held for sale as of September 30, 2022, 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 September 2022 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to September 30, 2022, 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 September 30, 2022[1] Lease Maturity Year[2] Rent[3] % of Total Rent 2024 $ 1,537 0.9 % 2027 5,342 3.0 % 2029 9,051 5.0 % 2030 11,353 6.3 % 2031 49,368 27.5 % 2032 17,708 9.9 % 2033 19,823 11.1 % 2034 40,945 22.8 % 2036 13,862 7.7 % 2038 10,401 5.8 % Total $ 179,390 100.0 % — — 0.9% — — 3.0% — 5.0% 6.3% 27.5% 9.9% 11.1% 22.8% — 7.7% — 5.8% 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Tenant Purchase Options 13 Notes: [1] Option type includes: A - Fixed base price plus a specified share on any appreciation. B - Fixed base price. C- Fixed capitalization rate on lease revenue. [2] Rent represents September 2022 contractual cash rent, annualized, and excludes ground lease income. Additionally, if a lease was entered into, amended or restructured subsequent to September 30, 2022, the initial or amended contractual cash rent is used. [3] Option window is open for six months. [4] Option window is open until the expiration of the lease term. [5] Purchase option reflects two option types. [6] Includes properties classified as held for sale at September 30, 2022. (dollars in thousands) As of September 30, 2022 Asset Type Properties Lease Expiration Next Option Open Date Option Type[1] Current Cash Rent[2] % of Total Rent[2] ALF 5[6] October 2034 1/1/2023 [3] A $ 2,287 1.19 % SNF 11 November 2030 1/1/2023 [3] C 5,092 2.65 % SNF 1 March 2029 4/1/2022 [4] B / C [5] 805 0.42 % SNF / Campus 2 October 2032 1/1/2023 [3] B 1,065 0.55 % SNF 4 November 2034 12/1/2024 [4] B 3,796 1.98 % ALF 2[6] October 2034 1/1/2026 [3] A 1,598 0.83 % 7.62 %
Consolidated Statements of Operations 14 (amounts in thousands, except per share data) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Revenues: Rental income $ 47,018 $ 48,087 $ 139,831 $ 141,077 Interest and other income 3,275 518 4,491 1,537 Total revenues 50,293 48,605 144,322 142,614 Expenses: Depreciation and amortization 12,256 13,968 38,390 41,284 Interest expense 8,355 5,692 20,400 17,988 Property taxes 691 1,004 3,365 2,466 Impairment of real estate investments 12,322 — 73,706 — Provision for loan losses, net — — 3,844 — Property operating expenses 3,808 — 4,344 — General and administrative 5,159 5,196 15,352 16,136 Total expenses 42,591 25,860 159,401 77,874 Other loss: Loss on extinguishment of debt — (10,827) — (10,827) Loss on sale of real estate, net (2,287) — (2,101) (192) Unrealized loss on other real estate related investments (4,706) — (4,706) — Total other loss (6,993) (10,827) (6,807) (11,019) Net income (loss) $ 709 $ 11,918 $ (21,886) $ 53,721 Earnings (loss) per common share: Basic $ 0.01 $ 0.12 $ (0.23) $ 0.56 Diluted $ 0.01 $ 0.12 $ (0.23) $ 0.56 Weighted-average number of common shares: Basic 96,605 96,297 96,527 95,922 Diluted 96,625 96,297 96,527 95,937 Dividends declared per common share $ 0.275 $ 0.265 $ 0.825 $ 0.795
See "Glossary" for additional information. Reconciliation of EBITDA, FFO and FAD 15 (amounts in thousands) Quarter Ended September 30, 2021 Quarter Ended December 31, 2021 Quarter Ended March 31, 2022 Quarter Ended June 30, 2022 Quarter Ended September 30, 2022 Net income (loss) $ 11,918 $ 18,261 $ (43,264) $ 20,669 $ 709 Depreciation and amortization 13,968 14,056 13,575 12,559 12,256 Interest expense 5,692 5,689 5,742 6,303 8,355 Amortization of stock-based compensation 1,802 5,635 1,521 1,394 1,380 EBITDA 33,380 43,641 (22,426) 40,925 22,700 Impairment of real estate investments — — 59,683 1,701 12,322 Provision for loan losses, net — — 3,844 — — Provision for doubtful accounts and lease restructuring — — 977 — — Property operating expenses — 8 1,231 631 3,821 (Gain) loss on sale of real estate — (115) (186) — 2,287 Non-routine transaction costs — 1,418 — — — Loss on extinguishment of debt 10,827 — — — — Unrealized loss on other real estate related investments — — — — 4,706 Normalized EBITDA $ 44,207 $ 44,952 $ 43,123 $ 43,257 $ 45,836 Net income (loss) $ 11,918 $ 18,261 $ (43,264) $ 20,669 $ 709 Real estate related depreciation and amortization 13,964 14,051 13,571 12,553 12,251 Impairment of real estate investments — — 59,683 1,701 12,322 (Gain) loss on sale of real estate — (115) (186) — 2,287 Funds from Operations (FFO) 25,882 32,197 29,804 34,923 27,569 Provision for loan losses, net — — 3,844 — — Provision for doubtful accounts and lease restructuring — — 977 — — Property operating expenses — 8 1,231 631 3,821 Accelerated amortization of stock-based compensation — 3,696 — — — Non-routine transaction costs — 1,418 — — — Loss on extinguishment of debt 10,827 — — — — Unrealized loss on other real estate related investments — — — — 4,706 Normalized FFO $ 36,709 $ 37,319 $ 35,856 $ 35,554 $ 36,096
[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) 16 (amounts in thousands, except per share data) Quarter Ended September 30, 2021 Quarter Ended December 31, 2021 Quarter Ended March 31, 2022 Quarter Ended June 30, 2022 Quarter Ended September 30, 2022 Net income (loss) $ 11,918 $ 18,261 $ (43,264) $ 20,669 $ 709 Real estate related depreciation and amortization 13,964 14,051 13,571 12,553 12,251 Amortization of deferred financing fees 519 521 520 520 520 Amortization of stock-based compensation 1,802 5,635 1,521 1,394 1,380 Straight-line rental income (6) (6) (6) (5) (3) Impairment of real estate investments — — 59,683 1,701 12,322 (Gain) loss on sale of real estate — (115) (186) — 2,287 Funds Available for Distribution (FAD) 28,197 38,347 31,839 36,832 29,466 Provision for loan losses, net — — 3,844 — — Provision for doubtful accounts and lease restructuring — — 977 — — Property operating expenses — 8 1,231 631 3,821 Non-routine transaction costs — 1,418 — — — Loss on extinguishment of debt 10,827 — — — — Unrealized loss on other real estate related investments — — — — 4,706 Normalized FAD $ 39,024 $ 39,773 $ 37,891 $ 37,463 $ 37,993 FFO per share $ 0.27 $ 0.33 $ 0.31 $ 0.36 $ 0.28 Normalized FFO per share $ 0.38 $ 0.39 $ 0.37 $ 0.37 $ 0.37 FAD per share $ 0.29 $ 0.40 $ 0.33 $ 0.38 $ 0.30 Normalized FAD per share $ 0.40 $ 0.41 $ 0.39 $ 0.39 $ 0.39 Diluted weighted average shares outstanding [1] 96,592 96,646 96,701 96,672 96,752
Consolidated Balance Sheets 17 (amounts in thousands) September 30, 2022 December 31, 2021 Assets: Real estate investments, net $ 1,384,166 $ 1,589,971 Other real estate related investments, at fair value 158,662 15,155 Assets held for sale, net 77,708 4,835 Cash and cash equivalents 4,861 19,895 Accounts and other receivables 808 2,418 Prepaid expenses and other assets, net 19,046 7,512 Deferred financing costs, net 327 1,062 Total assets $ 1,645,578 $ 1,640,848 Liabilities and Equity: Senior unsecured notes payable, net $ 394,928 $ 394,262 Senior unsecured term loan, net 199,295 199,136 Unsecured revolving credit facility 180,000 80,000 Accounts payable, accrued liabilities and deferred rent liabilities 30,851 25,408 Dividends payable 26,827 26,285 Total liabilities 831,901 725,091 Equity: Common stock 966 963 Additional paid-in capital 1,196,662 1,196,839 Cumulative distributions in excess of earnings (383,951) (282,045) Total equity 813,677 915,757 Total liabilities and equity $ 1,645,578 $ 1,640,848
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. See “Financials & Filings – 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. See “Glossary” for additional information. Net Debt to Enterprise Value [2]Net Debt to Annualized Normalized Run Rate EBITDA [1] Key Debt Metrics 18 3.4 3.2 3.1 3.2 3.7 3.7 3.7 3.7 3.9 4.3 4.2 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 28.0% 23.1% 22.0% 20.0% 22.1% 22.1% 25.1% 23.0% 26.6% 30.2% 30.6% 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22
Notes: [1] Funds can be borrowed at applicable LIBOR 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 LIBOR 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 19 — — $180,000 — $200,000 — $400,000 202 2 202 3 202 4 202 5 202 6 202 7 202 8 Debt Maturity Year Pri nci pa l (dollars in thousands) September 30, 2022 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 51.3 % $ (5,072) $ 394,928 Floating Rate Debt Senior unsecured term loan 4.715 % [1] 2026 200,000 25.6 % (705) 199,295 Unsecured revolving credit facility 4.261 % [2] 2024 [3] 180,000 23.1 % — [4] 180,000 4.500 % 380,000 48.7 % (705) 379,295 Total Debt 4.179 % $ 780,000 100.0 % $ (5,777) $ 774,223
Notes: [1] Represents average offering price per share for follow-on equity offerings. [2] As of September 30, 2022, CareTrust REIT had $476.5 million available for future issuances under the ATM Program. Follow-On Equity Offering Activity At-the-Market Offering Activity Equity Capital Transactions 20 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[2] Q1 Q2 Q3 Number of Shares (000s) 924 10,574 10,265 2,459 — 990 — — — Average Price per Share $ 15.31 $ 16.43 $ 17.76 $ 19.48 $ — $ 23.74 $ — $ — $ — Gross Proceeds (000s) $ 14,147 $ 173,760 $ 182,321 $ 47,893 $ — $ 23,505 $ — $ — $ —
Notes: [1] Normalized FFO Payout Ratio represents dividends declared divided by Normalized FFO, in each case for the applicable quarter. [2] See “Financials & Filings - 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 21 $0.250$0.250$0.250$0.250 $0.265 $0.265 $0.265 $0.265 $0.275 $0.275 $0.275 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 73.5% 73.5% 73.5% 69.4% 73.6% 71.6% 69.7% 67.9% 74.3% 74.3% 74.3% 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 $0.34 $0.34 $0.34 $0.36 $0.36 $0.37 $0.38 $0.39 $0.37 $0.37 $0.37 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 $32.3 $32.1 $32.5 $34.2 $34.1 $35.8 $36.7 $37.3 $35.9 $35.6 $36.1 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22
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] 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”). 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 June 30, 2022 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 June 30, 2022 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 plus total outstanding debt minus cash, 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 22
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 23
