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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, 2017  
 
 
 
 
 
CareTrust REIT, Inc.
(Exact name of registrant as specified in its charter)  
 
 
 
 
 
 
 
 
Maryland
001-36181
46-3999490
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
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))

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, 2017, CareTrust REIT, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2017. 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, 2017 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
 
 
  
 
 
 







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, 2017
 
CARETRUST REIT, INC.
 
 
 
 
 
 
By:
/s/ William M. Wagner
 
 
 
 
William M. Wagner
 
 
 
Chief Financial Officer and Treasurer



Exhibit
Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11880397&doc=29

CareTrust REIT Announces Third Quarter 2017 Operating Results

Conference Call Scheduled for Thursday, November 9, 2017 at 12:00 pm ET
SAN CLEMENTE, Calif., November 8, 2017 (GLOBE NEWSWIRE) -- CareTrust REIT, Inc. (NASDAQ:CTRE) reported today operating results for the third quarter of 2017, as well as other recent events.
During the quarter and since, CareTrust REIT:
Posted net income of $0.15, normalized FFO of $0.28 and normalized FAD of $0.29, all per diluted weighted-average common share;

Invested approximately $214 million (inclusive of transaction costs) at a blended initial cash yield of 9.0%, acquiring 19 skilled nursing facilities and 4 assisted living and memory care facilities, and providing one mortgage financing;

Received an upgrade from Moody’s Investor Service to the Company’s corporate family credit rating to Ba3 from B1, with a continued positive outlook, as well as an upgrade to the senior unsecured rating of CareTrust REIT’s $300 million 5.25% senior unsecured notes to Ba3 from B1, also with a continued positive outlook;

Reduced its debt-to-EBITDA ratio to 4.5x and its debt-to-enterprise value to 26%, each as of quarter-end; and

Amended its lease with Pristine Senior Living to reduce Pristine’s portfolio from 16 to nine facilities and decrease the Company’s exposure to Pristine to 7.7% of annualized rental revenue, and amended it is lease with affiliates of Trillium Healthcare to re-let the seven relinquished facilities to Trillium.

Significant Milestones Reached
Greg Stapley, CareTrust REIT’s Chairman and Chief Executive Officer, noted that in the quarter and since, the Company reached significant milestones. “We’re pleased to report that with over $300 million in investments year to date, we have already beaten last year’s record,” he said. “In addition, we have now surpassed the $2 billion mark in enterprise value, while maintaining relatively low leverage,” he added, noting that the Company’s liquidity position and acquisition pipeline both look solid going into 2018.
Mr. Stapley also noted that the Company had been able to help tenant Pristine Senior Living strengthen their operations and lease coverage, while simultaneously reducing CareTrust REIT’s exposure to Pristine. He reported that Pristine had not only made meaningful operational improvements in the quarter, but had also agreed to transfer several properties to another operator selected by CareTrust REIT, without substantial rent reductions or any asset impairments. “This is an example of the kind of creative and mutually-beneficial solutions that we, with our deep understanding of our tenants’ businesses and operations, can cooperatively craft when true challenges arise,” he added.
Financial Results for Quarter Ended September 30, 2017
Chief Financial Officer Bill Wagner reported that for the quarter, CareTrust REIT generated net income of $11.3 million, or $0.15 per diluted weighted-average common share, normalized FFO of $21.0 million, or $0.28 per diluted weighted-average common share, and normalized FAD of $22.2 million, or $0.29 per diluted weighted-average common share.

Liquidity
Discussing CareTrust REIT’s investments and current liquidity, Mr. Wagner reported that the $214 million in new investments in the quarter and since were funded with a combination of cash on hand and approximately $175 million in draws on the Company’s $400 million unsecured revolver. He noted that the revolving credit facility includes a $250 million “accordion” feature that can be exercised by the Company at its option to increase its access to debt capital.

He also reported that there had been no activity in the quarter on the Company’s at-the-market equity program but, he added, “Our ATM program remains a significant instrument in the Company’s capital-raising repertoire.” Mr. Wagner further reported that CareTrust REIT’s debt-to-EBITDA ratio was 4.5x and its debt-to-enterprise value was 26%, each at quarter-end, and that adjusted for subsequent transactions its current run-rate debt-to-EBITDA ratio stood at 4.5x, which is well within management’s target range. He also noted that



CareTrust REIT continues to have no property-level debt and, taking into account existing extension rights, no debt maturing before 2020.
2017 Guidance Revised Upward
Mr. Wagner updated CareTrust REIT's previously-issued 2017 earnings guidance. He confirmed that CareTrust REIT expects 2017 net income of approximately $0.51 to $0.52, normalized FFO of approximately $1.16 to $1.17, and normalized FAD of approximately $1.21 to $1.22. He noted that the updated 2017 guidance is based on a per-diluted weighted-average common share count of 72.9 million shares, reflects the effects of the new lease amendments with affiliates of Pristine Senior Living and Trillium Healthcare based on the expected December 1, 2017 transfer as discussed below, and assumes no new acquisitions beyond those announced, no new debt incurrences or additional equity issuances, and no future CPI-based rent escalators under CareTrust REIT’s long-term net-leases beyond those made to date.

Dividend Declared

During the quarter, CareTrust declared a quarterly dividend of $0.185 per common share. “On an annualized basis, our quarterly dividend represents a payout ratio of approximately 64% based on the midpoint of our updated 2017 normalized FFO guidance, and 61% on normalized FAD,” said Mr. Wagner. “At this level, our dividend remains among the best-protected of all our industry peers, while simultaneously providing additional growth capital for reinvestment and a solid overall return to our shareholders,” he added.

Pristine Master Lease Amendment

Addressing recent changes in the Company’s portfolio, Mr. Stapley reported that the Company entered into a new lease amendment with affiliates of Pristine Senior Living on November 2, 2017. Under the amended lease, Pristine will transfer seven of the 16 Ohio facilities it currently leases from the Company to affiliates of Trillium Healthcare, another CareTrust REIT tenant. Further, Pristine will pay a reduced base rent on the nine retained facilities for a year, with the new base rent escalating after one year under a CPI-based formula with 2.0% minimum and 3.0% maximum annual increases. He also reported that, with the seven properties added to the Company’s master lease with affiliates of Trillium Healthcare, the amended Trillium lease now includes a rent schedule that steps up the base rent over approximately two years before returning to its regular CPI-based escalators, with no minimum and a 3.0% cap on annual increases.

Mr. Stapley noted that the Ohio portfolio was divided between Pristine and Trillium on a strictly geographic basis, with the resulting two smaller portfolios each containing individual operations of varying financial performance. He added that the transfer of the seven Ohio facilities is scheduled to occur on December 1, 2017.

Discussing the financial impacts of the transactions, Mr. Wagner noted that the Company’s reported rental income for the Ohio portfolio will only decrease by approximately 1.1%, from $18.6 million to a GAAP $18.4 million annually. He also reported that, post-transfer and with the near-term rent reductions on both the nine-property portfolio retained by Pristine and the seven-property portfolio assumed by Trillium, the Company’s combined GAAP lease yield for the 16-property Ohio portfolio will be approximately 9.6%. He stated that the scheduled change is designed to reduce CareTrust REIT’s exposure to Pristine from 15.1% to under 7.7% of annual cash revenue, while increasing Trillium to approximately 9.5%, all on a proforma basis as of September 30, 2017.

Conference Call

A conference call will be held on Thursday, November 9, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time), during which CareTrust REIT’s management will discuss third quarter results, recent developments and other matters affecting CareTrust REIT’s business and prospects. The dial-in number for this call is (844) 220-4972 (U.S.) or (317) 973-4053 (International). The conference ID number is 4077917. 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. The call will be recorded, and will be available for replay via the website for 30 days following the call.

About CareTrust REITTM 

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition and leasing of seniors housing and healthcare-related properties. With 184 net-leased healthcare properties and three operated seniors housing properties in 23 states, CareTrust is pursuing opportunities across the nation to acquire properties that will be leased to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses. 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 future financial and financing positions, business and acquisition strategies, growth prospects, operating and financial performance, expectations regarding the making of distributions, payment of dividends, compliance with and changes in governmental regulations, 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 ability to achieve some or all of the expected benefits from the completed spin-off from The Ensign Group, Inc. (“Ensign”); (ii) the ability and willingness of Company tenants to meet and/or perform their obligations under the triple-net leases the Company has entered into with them and the ability and willingness of Ensign to meet and/or perform its obligations under the contractual arrangements that it entered into with the Company in connection with such spin-off, including its triple-net long-term leases with the Company, and any of its obligations to indemnify, defend and hold the Company harmless from and against various claims, litigation and liabilities; (iii) the ability and willingness of the Company’s tenants to comply with laws, rules and regulations in the operation of the properties the Company leases to them; (iv) the ability and willingness of the Company’s tenants, including Ensign, to renew their leases with the Company upon expiration and the ability to reposition Company properties on the same or better terms in the event of nonrenewal or in the event the Company replaces an existing tenant, and obligations, including indemnification obligations, that the Company may incur in connection with the replacement of an existing tenant; (v) the availability of and the ability to identify suitable acquisition opportunities and the ability to acquire and lease the respective properties on favorable terms; (vi) the ability to generate sufficient cash flows to service the Company’s outstanding indebtedness; (vii) access to debt and equity capital markets; (viii) fluctuating interest rates; (ix) the ability to retain key management personnel; (x) the ability to maintain the Company’s status as a real estate investment trust (“REIT”); (xi) changes in the U.S. tax laws and other state, federal or local laws, whether or not specific to REITs; (xii) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xiii) any additional factors identified in the Company’s filings with the Securities and Exchange Commission (“SEC”), including those in the Company‘s Annual Report on Form 10-K for the year ended December 31, 2016 under the heading entitled “Risk Factors,” as such risk factors may be amended, supplemented or superseded from time to time by other reports the Company files with the SEC.
Information in this press release or the related conference call is provided as of September 30, 2017, 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 INCOME STATEMENTS
(in thousands, except per share data)
(unaudited)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
 
Rental income
$
29,404

 
$
24,179

 
$
85,254

 
$
67,857

 
Tenant reimbursements
2,543

 
2,089

 
7,253

 
5,815

 
Independent living facilities
825

 
766

 
2,407

 
2,177

 
Interest and other income
176

 
72

 
1,471

 
587

 
Total revenues
32,948

 
27,106

 
96,385

 
76,436

Expenses:
 
 
 
 
 
 
 
 
Depreciation and amortization
9,745

 
8,248

 
28,156

 
23,433

 
Interest expense
5,592

 
5,743

 
17,690

 
17,044

 
Loss on the extinguishment of debt

 

 
11,883

 
326

 
Property taxes
2,543

 
2,089

 
7,253

 
5,815

 
Independent living facilities
698

 
708

 
2,003

 
1,926

 
Impairment of real estate investment

 

 
890

 

 
Acquisition costs

 
203

 

 
203

 
General and administrative
3,059

 
2,283

 
8,426

 
6,724

 
Total expenses
21,637

 
19,274

 
76,301

 
55,471

Other income:
 
 
 
 
 
 
 
 
Gain on disposition of other real estate investment

 

 
3,538

 

Net income
$
11,311

 
$
7,832

 
$
23,622

 
$
20,965

 
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
Basic
$
0.15

 
$
0.13

 
$
0.33

 
$
0.38

 
Diluted
$
0.15

 
$
0.13

 
$
0.33

 
$
0.38

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
Basic
75,471

 
57,595

 
71,693

 
54,403

 
Diluted
75,471

 
57,595

 
71,693

 
54,403

 
 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.185

 
$
0.17

 
$
0.555

 
$
0.51






CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES
 (in thousands, except per share data)
 (unaudited)
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
Net income
 
$
11,311

 
$
7,832

 
$
23,622

 
$
20,965

 
Depreciation and amortization
 
9,745

 
8,248

 
28,156

 
23,433

 
Interest expense
 
5,592

 
5,743

 
17,690

 
17,044

 
Amortization of stock-based compensation
 
656

 
339

 
1,792

 
1,207

EBITDA
 
27,304

 
22,162

 
71,260

 
62,649

 
Acquisition costs
 

 
203

 

 
203

 
Loss on the extinguishment of debt
 

 

 
11,883

 
326

 
Deferred preferred return
 

 

 
(544
)
 

 
Impairment of real estate investment
 

 

 
890

 

 
Gain on disposition of other real estate investment
 

 

 
(3,538
)
 

Normalized EBITDA
 
$
27,304

 
$
22,365

 
$
79,951

 
$
63,178

 
 
 
 
 
 
 
 
 
 
Net income
 
$
11,311

 
$
7,832

 
$
23,622

 
$
20,965

 
Real estate related depreciation and amortization
 
9,717

 
8,223

 
28,076

 
23,360

 
Impairment of real estate investment
 

 

 
890

 

 
Gain on disposition of other real estate investment
 

 

 
(3,538
)
 

Funds from Operations (FFO)
 
21,028

 
16,055

 
49,050

 
44,325

 
Acquisition costs
 

 
203

 

 
203

 
Deferred preferred return
 

 

 
(544
)
 

 
Effect of the senior unsecured notes payable redemption
 

 

 
12,475

 

 
Write-off of deferred financing fees
 

 

 

 
326

Normalized FFO
 
$
21,028

 
$
16,258

 
$
60,981

 
$
44,854

 
 
 
 
 
 
 
 
 
 
Net income
 
$
11,311

 
$
7,832

 
$
23,622

 
$
20,965

 
Real estate related depreciation and amortization
 
9,717

 
8,223

 
28,076

 
23,360

 
Amortization of deferred financing fees
 
484

 
561

 
1,574

 
1,678

 
Amortization of stock-based compensation
 
656

 
339

 
1,792

 
1,207

 
Straight-line rental income
 
(2
)
 
(78
)
 
(117
)
 
(78
)
 
Impairment of real estate investment
 

 

 
890

 

 
Gain on disposition of other real estate investment
 

 

 
(3,538
)
 

Funds Available for Distribution (FAD)
 
22,166

 
16,877

 
52,299

 
47,132

 
Acquisition costs
 

 
203

 

 
203

 
Deferred preferred return
 

 

 
(544
)
 

 
Effect of the senior unsecured notes payable redemption
 

 

 
12,475

 

 
Write-off of deferred financing fees
 

 

 

 
326

Normalized FAD
 
$
22,166

 
$
17,080

 
$
64,230

 
$
47,661

 
 
 
 
 
 
 
 
 
 
FFO per share
 
$
0.28

 
$
0.28

 
$
0.68

 
$
0.81

Normalized FFO per share
 
$
0.28

 
$
0.28

 
$
0.85

 
$
0.82

 
 
 
 
 
 
 
 
 
 
FAD per share
 
$
0.29

 
$
0.29

 
$
0.73

 
$
0.86

Normalized FAD per share
 
$
0.29

 
$
0.30

 
$
0.89

 
$
0.87

 
 
 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding [1]
 
75,659

 
57,739

 
71,896

 
54,561

 
 
 
 
 
 
 
 
 
 
 
 [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method.







CARETRUST REIT, INC.
CONSOLIDATED INCOME STATEMENTS - 5 QUARTER TREND
(in thousands, except per share data)
(unaudited)
 
Quarter
Quarter
Quarter
Quarter
Quarter
 
Ended
Ended
Ended
Ended
Ended
 
September 30, 2016
December 31, 2016
March 31, 2017
June 30, 2017
September 30, 2017
Revenues:
 
 
 
 
 
Rental income
$
24,179

$
25,269

$
27,339

$
28,511

$
29,404

Tenant reimbursements
2,089

2,031

2,321

2,389

2,543

Independent living facilities
766

793

793

789

825

Interest and other income
72

150

155

1,140

176

Total revenues
27,106

28,243

30,608

32,829

32,948

Expenses:
 
 
 
 
 
Depreciation and amortization
8,248

8,532

9,076

9,335

9,745

Interest expense
5,743

5,829

5,879

6,219

5,592

Loss on the extinguishment of debt



11,883


Property taxes
2,089

2,031

2,321

2,389

2,543

Independent living facilities
708

623

661

644

698

Impairment of real estate investment



890


Acquisition costs
203

2




General and administrative
2,283

2,573

2,390

2,977

3,059

Total expenses
19,274

19,590

20,327

34,337

21,637

Other income (expense):
 
 
 
 
 
Loss on sale of real estate

(265
)



Gain on disposition of other real estate investment



3,538


Net income
$
7,832

$
8,388

$
10,281

$
2,030

$
11,311

 
 
 
 
 
 
Diluted earnings per share
$
0.13

$
0.14

$
0.15

$
0.03

$
0.15

 
 
 
 
 
 
Diluted weighted average shares outstanding
57,595

60,875

66,951

72,564

75,471






CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND
 (in thousands, except per share data)
 (unaudited)
 
Quarter
Quarter
Quarter
Quarter
Quarter
 
Ended
Ended
Ended
Ended
Ended
 
September 30, 2016
December 31, 2016
March 31, 2017
June 30, 2017
September 30, 2017
 
 
 
 
 
 
Net income
$
7,832

$
8,388

$
10,281

$
2,030

$
11,311

Depreciation and amortization
8,248

8,532

9,076

9,335

9,745

Interest expense
5,743

5,829

5,879

6,219

5,592

Amortization of stock-based compensation
339

339

536

600

656

EBITDA
22,162

23,088

25,772

18,184

27,304

Acquisition costs
203

2




Loss on sale of real estate

265




Loss on the extinguishment of debt



11,883


Deferred preferred return



(544
)

Impairment of real estate investment



890


Gain on disposition of other real estate investment



(3,538
)

Normalized EBITDA
$
22,365

$
23,355

$
25,772

$
26,875

$
27,304

 
 
 
 
 
 
Net income
$
7,832

$
8,388

$
10,281

$
2,030

$
11,311

Real estate related depreciation and amortization
8,223

8,505

9,050

9,309

9,717

Loss on sale of real estate

265




Impairment of real estate investment



890


Gain on disposition of other real estate investment



(3,538
)

Funds from Operations (FFO)
16,055

17,158

19,331

8,691

21,028

Acquisition costs
203

2




Deferred preferred return



(544
)

Effect of the senior unsecured notes payable redemption



12,475


Normalized FFO
$
16,258

$
17,160

$
19,331

$
20,622

$
21,028






CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME 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, 2016
December 31, 2016
March 31, 2017
June 30, 2017
September 30, 2017
 
 
 
 
 
 
Net income
$
7,832

$
8,388

$
10,281

$
2,030

$
11,311

Real estate related depreciation and amortization
8,223

8,505

9,050

9,309

9,717

Amortization of deferred financing fees
561

561

561

529

484

Amortization of stock-based compensation
339

339

536

600

656

Straight-line rental income
(78
)
(72
)
(72
)
(43
)
(2
)
Loss on sale of real estate

265




Impairment of real estate investment



890


Gain on disposition of other real estate investment



(3,538
)

Funds Available for Distribution (FAD)
16,877

17,986

20,356

9,777

22,166

Acquisition costs
203

2




Deferred preferred return



(544
)

Effect of the senior unsecured notes payable redemption



12,475


Normalized FAD
$
17,080

$
17,988

$
20,356

$
21,708

$
22,166

 
 
 
 
 
 
FFO per share
$
0.28

$
0.28

$
0.29

$
0.12

$
0.28

Normalized FFO per share
$
0.28

$
0.28

$
0.29

$
0.28

$
0.28

 
 
 
 
 
 
FAD per share
$
0.29

$
0.29

$
0.30

$
0.13

$
0.29

Normalized FAD per share
$
0.30

$
0.29

$
0.30

$
0.30

$
0.29

 
 
 
 
 
 
Diluted weighted average shares outstanding [1]
57,739

61,028

67,133

72,803

75,659

 
 
 
 
 
 
 [1]  For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. 










CARETRUST REIT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
 
 
September 30, 2017
 
December 31, 2016
 
 
 
 
(unaudited)
 
 
Assets:
 
 
 
 
Real estate investments, net
$
1,089,089

 
$
893,918

Other real estate investments
5,368

 
13,872

Cash and cash equivalents
14,808

 
7,500

Accounts and other receivables
12,961

 
5,896

Prepaid expenses and other assets
1,803

 
1,369

Deferred financing costs, net
1,989

 
2,803

 
 
 
Total assets
$
1,126,018

 
$
925,358

 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
Senior unsecured notes payable, net
$
294,221

 
$
255,294

Senior unsecured term loan, net
99,493

 
99,422

Unsecured revolving credit facility
95,000

 
95,000

Accounts payable and accrued liabilities
17,382

 
12,137

Dividends payable
14,046

 
11,075

 
 
 
Total liabilities
520,142

 
472,928

 
 
 
 
 
 
 
Equity:
 
 
 
 
Common stock
755

 
648

Additional paid-in capital
782,707

 
611,475

Cumulative distributions in excess of earnings
(177,586
)
 
(159,693
)
 
 
 
Total equity
605,876

 
452,430

 
 
 
Total liabilities and equity
$
1,126,018

 
$
925,358






CARETRUST REIT, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Nine Months Ended September 30,
 
2017
 
2016
Cash flows from operating activities:
 
 
 
Net income
$
23,622

 
$
20,965

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization (including a below-market ground lease)
28,168

 
23,444

Amortization of deferred financing costs
1,615

 
1,678

Loss on extinguishment of debt
11,883

 
326

Amortization of stock-based compensation
1,792

 
1,207

Straight-line rental income
(117
)
 
(78
)
Non-cash interest income
(496
)
 
(587
)
Interest income distribution from other real estate investment
1,500

 

Impairment of real estate investment
890

 

Change in operating assets and liabilities:
 
 
 
Accounts and other receivables
(6,948
)
 
(3,246
)
Prepaid expenses and other assets
(182
)
 
3

Accounts payable and accrued liabilities
5,206

 
5,801

Net cash provided by operating activities
66,933

 
49,513

Cash flows from investing activities:
 
 
 
Acquisitions of real estate
(222,463
)
 
(185,284
)
Improvements to real estate
(621
)
 
(258
)
Purchases of equipment, furniture and fixtures
(359
)
 
(139
)
Preferred equity investments

 
(4,531
)
Sale of other real estate investment
7,500

 

Escrow deposits for acquisition of real estate
(1,000
)
 
(1,000
)
Net cash used in investing activities
(216,943
)
 
(191,212
)
Cash flows from financing activities:
 
 
 
Proceeds from the issuance of common stock, net
170,414

 
108,395

Proceeds from the issuance of senior unsecured notes payable
300,000

 

Proceeds from the issuance of senior unsecured term loan

 
100,000

Borrowings under unsecured revolving credit facility
158,000

 
150,000

Payments on senior unsecured notes payable
(267,639
)
 

Payments on unsecured revolving credit facility
(158,000
)
 
(92,000
)
Payments on the mortgage notes payable

 
(95,022
)
Payments of deferred financing costs
(6,047
)
 
(1,352
)
Net-settle adjustment on restricted stock
(866
)
 
(515
)
Dividends paid on common stock
(38,544
)
 
(27,396
)
Net cash provided by financing activities
157,318

 
142,110

Net increase in cash and cash equivalents
7,308

 
411

Cash and cash equivalents, beginning of period
7,500

 
11,467

Cash and cash equivalents, end of period
$
14,808

 
$
11,878







CARETRUST REIT, INC.
DEBT SUMMARY
(dollars in thousands)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
 
Interest
 
Maturity
 
 
 
% of
 
Deferred
 
Net Carrying
Debt
Rate
 
Date
 
Principal
 
Principal
 
Loan Costs
 
Value
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Rate Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior unsecured notes payable
5.250
%
 
2025
 
$
300,000

 
60.6
%
 
$
(5,779
)
 
$
294,221

 
 
 
 
 
 
 
 
 
 
 
 
Floating Rate Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior unsecured term loan
3.185
%
[1]
2023
 
100,000

 
20.2
%
 
(507
)
 
99,493

 
 
 
 
 
 
 
 
 
 
 
 
Unsecured revolving credit facility
2.986
%
[2]
2020
[3]
95,000

 
19.2
%
 

[4]
95,000

 
3.088
%
 
 
 
195,000

 
39.4
%
 
(507
)
 
194,493

 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
4.398
%
 
 
 
$
495,000

 
100.0
%
 
$
(6,286
)
 
$
488,714

 
 
 
 
 
 
 
 
 
 
 
 
[1] Funds can be borrowed at applicable LIBOR plus 1.95% to 2.60% or at the Base Rate (as defined) plus 0.95% to 1.6%.
[2] Funds can be borrowed at applicable LIBOR plus 1.75% to 2.40% or the Base Rate (as defined) plus 0.75% to 1.4%.
[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.







CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES
 (shares in thousands)
 (unaudited)
 
 
 
 
 
 
 
 
 
 
 2017 Guidance
 
 
 
 
 
 
 
 
 
 
 
 
Low
 
High
Net income
$
0.51

 
$
0.52

 
Real estate related depreciation and amortization
0.52

 
0.52

 
Impairment of real estate investment
0.01

 
0.01

 
Gain on disposition of other real estate investment
(0.05
)
 
(0.05
)
Funds from Operations (FFO)
0.99

 
1.00

 
Deferred preferred return
(0.00)

 
(0.00)

 
Effect of the senior unsecured notes payable redemption
0.17

 
0.17

Normalized FFO
$
1.16

 
$
1.17

 
 
 
 
 
Net income
$
0.51

 
$
0.52

 
Real estate related depreciation and amortization
0.52

 
0.52

 
Amortization of deferred financing fees
0.03

 
0.03

 
Amortization of stock-based compensation
0.03

 
0.03

 
Straight-line rental income
(0.01
)
 
(0.01
)
 
Impairment of real estate investment
0.01

 
0.01

 
Gain on disposition of other real estate investment
(0.05
)
 
(0.05
)
Funds Available for Distribution (FAD)
1.04

 
1.05

 
Deferred preferred return
(0.00)

 
(0.00)

 
Effect of the senior unsecured notes payable redemption
0.17

 
0.17

Normalized FAD
$
1.21

 
$
1.22

Weighted average shares outstanding:
 
 
 
 
Diluted
72,959

 
72,959










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 real estate impairment charges, expensed acquisition costs, losses on the extinguishment of debt, and gains or losses from dispositions of real estate or other real estate. 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. However, 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 or other real estate, real estate 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 non-cash income and expenses, such as amortization of stock-based compensation, amortization of deferred financing costs 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 written-off deferred financing fees, expensed acquisition costs, certain preferred returns, the effect of the senior unsecured notes payable redemption and other unanticipated charges. 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 and indebtedness, 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 depreciation and amortization, and, for FAD and normalized FAD, by excluding non-cash income and expenses such as amortization of stock-based compensation, amortization of deferred financing costs, 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.
CareTrust REIT, Inc.
(949) 542-3130
ir@caretrustreit.com

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11880397&doc=29




exhibit992ctreq32017f470
The Rio at Cabezon (Rio Rancho, NM) EXHIBIT 99.2 Cascadia of Nampa (Nampa, ID)


 
2 Disclaimers • 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 positions, business and acquisition strategies, growth prospects, operating and financial performance, expectations regarding the making of distributions, payment of dividends, compliance with and changes in governmental regulations, 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 ability to achieve some or all of the expected benefits from the completed spin-off from The Ensign Group, Inc. (“Ensign”); (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 and the ability and willingness of Ensign to meet and/or perform its obligations under the contractual arrangements that it entered into with us in connection with such spin-off, including its triple-net long-term leases with us, and any of its obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the ability and willingness of our tenants to comply with laws, rules and regulations in the operation of the properties we lease to them; (iv) the ability and willingness of our tenants, including Ensign, to renew their leases with us upon 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, and obligations, including indemnification obligations, that we may incur in connection with the replacement of an existing tenant; (v) the availability of and the ability to identify suitable acquisition opportunities and the ability to acquire and lease the respective properties on favorable terms; (vi) the ability to generate sufficient cash flows to service our outstanding indebtedness; (vii) access to debt and equity capital markets; (viii) fluctuating interest rates; (ix) the ability to retain our key management personnel; (x) the ability to maintain our status as a real estate investment trust (“REIT”); (xi) changes in the U.S. tax laws and other state, federal or local laws, whether or not specific to REITs; (xii) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xiii) any additional factors identified in our filings with the Securities and Exchange Commission (“SEC”), including those in our Annual Report on Form 10-K for the year ended December 31, 2016 under the heading entitled “Risk Factors,” as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with 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. Other financial information, including GAAP financial information, is also available on our website. Non-GAAP financial information does not represent financial performance under GAAP and should not be considered in insolation, 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. Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at Ensign’s website http://www.ensigngroup.net. • Information in this supplement is provided as of September 30, 2017, 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. 2


 
3 Company Profile CareTrust REIT is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition 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 November 7, 2017, CareTrust REIT has expanded its tenant roster to 19 operators, and has grown its portfolio real estate portfolio to 184 net-leased healthcare properties and three operated seniors housing properties across 23 states, consisting of 18,017 operating beds/units. Management Greg Stapley Chairman and Chief Executive Officer Bill Wagner Chief Financial Officer Dave Sedgwick Vice President of Operations Mark Lamb Director of Investments Contact Information 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 Board of Directors KeyBanc Capital Markets Jordan Sadler | (917) 318-2280 Raymond James Jonathan Hughes | (727) 567-2438 Wells Fargo Securities Todd Stender | (562) 637-1371 RBC Capital Markets Michael Carroll | (440) 715-2649 Stifel, Nicolaus & Company Chad Vanacore | (518) 587-2581 BMO Capital Markets John Kim | (212) 885-4115 CapitalOne Securities Dan Bernstein | (571) 835-7202 JMP Research Peter Martin | (415) 835-8904 Stephens Dana Hambly, CFA | (615) 279-4329 Analyst Coverage Greg Stapley Chairman David Lindahl Jon Kline Allen Barbieri Spencer Plumb Company Profile 3 CareTrust at a Glance 4 Investments 5 Portfolio Overview Portfolio Performance 6 Tenant Summary 7 Rent Diversification by Tenant 8 Geographic Diversification 10 Rent Diversification by State 11 Lease Maturities 12 Financial Overview Consolidated Income Statements 14 Reconciliation of EBITDA, FFO and FAD 15 Consolidated Balance Sheets 17 Key Debt Metrics 18 Debt Summary 19 2017 Guidance 20 Equity Capital Transactions 21 Other Financial Highlights 22 Glossary 23


 
4 Note: Amounts are as of September 30, 2017 and exclude our three operated seniors housing properties and our two preferred equity investments. Credit Ratings S&P Corporate Rating: B+ (positive) Senior Unsecured Notes: BB- Moody’s Corporate Rating: B1 (positive) Senior Unsecured Notes: B1 Annualized Rent 16,795 Operating Beds/Units 171 Properties 18 Operators 23 States $1,202.5M Investments CareTrust REIT, Inc. NASDAQ: CTRE Market Data (as of September 30, 2017) Closing Price: $19.04 52 Week Range: $19.86 – $12.70 Market Cap: $1,446M Enterprise Value: $1,941M Outstanding Shares: 75.9M Credit Ratings S&P Corporate Rating: B+ (positive) Senior Unsecured Notes: BB- Moody’s Corporate Rating: Ba3 (positive) Senior Unsecured Notes: Ba3 4


 
5 Investments Notes: [1] Initial Investment for pre-spin properties represents Ensign's gross book value. Initial Investment for post-spin properties represents CareTrust REIT’s purchase price and transaction costs. [2] Initial Operating Beds/Units as of the acquisition date. [3] Total Cost per Bed/Unit excludes preferred equity investments. [4] Initial Rent represents the annualized acquisition-date cash rent or deferred interest income on preferred equity investments. [5] Initial Yield represents Initial Rent divided by Initial Investment. [6] Mortgage loan. [7] All amounts exclude our three operated seniors housing properties. (dollars in thousands) Date Operator Property Type Location Facilities Initial Investment[1] Initial Operating Bed/Unit [2] Cost per Bed/Unit [3] Initial Rent [4] Initial Yield[5] 6/1/2014 The Ensign Group ALF, SNF, Campus Various 94 $ 501,673 10,053 $ 50 $ 56,000 N/A 2014 Investments 6 33,609 157 166 3,076 9.2% 2015 Investments 20 233,028 1,840 127 22,263 9.6% 2016 Investments 35 288,023 2,800 101 26,084 9.1% 02/01/17 Premier Senior Living ALF WI 2 26,111 88 297 2,160 8.3% 03/01/17 WLC Management SNF IL 5 29,204 455 64 2,915 10.0% 05/01/17 Better Senior Living Consulting ALF FL 1 2,033 89 23 290 14.3% 05/01/17 Cascadia Healthcare SNF ID 1 6,475 119 54 588 9.1% 06/01/17 OnPointe Health SNF TX, NM 2 27,316 262 104 2,455 9.0% 07/01/17 WLC Management SNF IL 1 3,668 99 37 372 10.1% 07/01/17 Cascadia Healthcare SNF OR 1 3,995 53 75 362 9.1% 07/21/17 Prelude Homes & Services ALF MN 1 7,800 30 260 641 8.2% 09/01/17 Cascadia Healthcare SNF WA 1 895 76 12 120 13.4% 09/01/17 Priority Management Group SNF TX 3 20,285 405 50 1,850 9.1% 09/01/17 & 10/01/17 Cascadia Healthcare SNF ID 7 65,315 571 114 5,916 9.1% 10/01/17 Five Oaks SNF WA 3 12,120 268 45 1,140 9.4% 10/01/17 Twenty/20 Management ALF VA 3 18,200 91 200 1,544 8.5% 10/26/17 Providence Group SNF CA 3 69,120 528 131 6,072 8.8% 10/26/17 Providence Group[6] SNF CA 1 12,542 104 121 1,129 9.0% 2017 Year to Date Investments 35 305,079 3,238 94 27,554 9.0% Total Post Spin-off Investments 96 859,739 8,035 107 78,977 9.2% Total Investments[7] 190 $ 1,361,412 18,088 $ 72 $ 134,977


 
6 Portfolio Performance Notes: [1] Investment for pre-spin properties represents Ensign'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 2017 rent, annualized. [3] Current Yield represents Rent divided by Investment. [4] All amounts exclude our three operated seniors housing properties and our two preferred equity investments. [5] EBITDAR Coverage, EBITDARM Coverage and Occupancy include 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. See “Glossary” for additional information. (dollars in thousands) As of September 30, 2017 For the period ended June 30, 2017 [5] Asset Type Facilities Operating Beds/Units Investment [1] % of Total Investment Rent [2] % of Total Rent Current Yield [3] EBITDAR Coverage EBITDARM Coverage Occupancy Skilled Nursing 119 11,544 $ 810,724 67.4% $ 84,678 68.9% 10.4% 1.75x 2.30x 78.0% Skilled Nursing Campus 16 2,218 177,506 14.8% 18,632 15.2% 10.5% 1.53x 1.91x 77.4% Seniors Housing 36 3,033 214,245 17.8% 19,569 15.9% 9.1% 1.41x 1.65x 84.3% Total Net-Leased Asset [4] 171 16,795 $ 1,202,475 100.0% $ 122,879 100.0% 10.2% 1.65x 2.13x 79.0% Prelude White Bear Lake (White Bear Lake, MN)


 
7 Tenant Summary


 
8 Rent Diversification by Tenant Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. Investment for post-spin properties represents CareTrust REIT’s cumulative capital investment. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [2] Rent represents September 2017 rent, annualized. [3] All amounts exclude our three operated seniors housing properties and our two preferred equity investments. [4] On November 2, 2017, we (i) entered into a fourth amendment to the master lease with affiliates of Pristine, pursuant to which we agreed that seven facilities would be transferred to a new operator, and (ii) entered into a third amendment to the master lease with affiliates of Trillium to lease such properties to affiliates of Trillium. As of September 30, 2017 (dollars in thousands) (Pre-Pristine Lease Amendment) [4] Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[2] % of Total Rent 1 The Ensign Group 92 9,754 501,246 41.7% 57,672 46.9% 2 Pristine Senior Living 16 1,488 192,143 16.0% 18,588 15.1% 3 Priority Management Group 7 981 116,229 9.7% 10,400 8.5% 4 Premier Senior Living Group 8 379 68,564 5.7% 6,034 4.9% 5 Cascadia Healthcare 7 572 50,520 4.2% 4,673 3.8% Total Top 5 Tenants 130 13,174 928,702 77.3% 97,367 79.2% 6 Trillium Healthcare Group 11 735 46,025 3.8% 4,544 3.7% 7 WLC Management 6 554 32,871 2.7% 3,287 2.7% 8 Covenant Care 3 393 34,415 2.9% 3,174 2.6% 9 OnPointe Healthcare 2 262 27,316 2.3% 2,455 2.0% 10 Better Senior Living Consulting 4 461 21,663 1.8% 2,056 1.7% Total Top 10 Tenants 156 15,579 1,090,992 90.8% 112,883 91.9% All Other Tenants 15 1,216 111,483 9.2% 9,996 8.1% Total [3] 171 16,795 $ 1,202,475 100.0% $ 122,879 100.0%


 
9 Rent Diversification by Tenant Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. Investment for post-spin properties represents CareTrust REIT’s cumulative capital investment. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [2] Rent represents September 2017 rent, annualized, or based on the initial cash rents annualized of the amendments mentioned in [4] below. [3] All amounts exclude our three operated seniors housing properties and our two preferred equity investments. [4] On November 2, 2017, we (i) entered into a fourth amendment to the master lease with affiliates of Pristine, pursuant to which we agreed that seven facilities would be transferred to a new operator, and (ii) entered into a third amendment to the master lease with affiliates of Trillium to lease such properties to affiliates of Trillium. As of September 30, 2017 (dollars in thousands) (Post-Pristine Lease Amendment) [4] Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[2] % of Total Rent 1 The Ensign Group 92 9,754 501,246 41.7% 57,672 47.9% 2 Trillium Healthcare Group 18 1,362 127,149 10.6% 11,489 9.5% 3 Priority Management Group 7 981 116,229 9.7% 10,400 8.6% 4 Pristine Senior Living 9 861 111,019 9.2% 9,087 7.7% 5 Premier Senior Living Group 8 379 68,564 5.7% 6,034 5.0% Total Top 5 Tenants 134 13,337 924,207 76.9% 94,682 78.7% 6 Cascadia Healthcare 7 572 50,520 4.2% 4,673 3.9% 7 WLC Management 6 554 32,871 2.7% 3,287 2.7% 8 Covenant Care 3 393 34,415 2.9% 3,174 2.6% 9 OnPointe Healthcare 2 262 27,316 2.3% 2,455 2.0% 10 Better Senior Living Consulting 4 461 21,663 1.8% 2,056 1.7% Total Top 10 Tenants 156 15,579 1,090,992 90.8% 110,327 91.6% All Other Tenants 15 1,216 111,483 9.2% 9,996 8.4% Total [3] 171 16,795 $ 1,202,475 100.0% $ 120,323 100.0%


 
CA: 14.5% OH: 8.9% AZ: 7.9% ID: 6.0% Others: 39.2%TX: 23.5% 10 1 SNF 1 ALF 1 ALF Top Five States CA: 16.2% OH: 15.1% AZ: 7.3% ID: 6.7% Others: 33.6% TX: 21.1% CA: 13.1% OH: 16.0% AZ: 5.1% ID: 6.5% Others: 37.4%TX: 21.9% Run-R at e Re nt In ve stme nt Beds/Unit s Notes: Amounts are as of September 30, 2017 and exclude our three operated seniors housing properties and our two preferred equity investments.


 
11 Rent Diversification by State Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. For post-spin properties, Investment represents CareTrust REIT’s cumulative capital investment. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [2] Rent represents September 2017 rent, annualized. [3] All amounts exclude our three operated seniors housing properties and our two preferred equity investments. (dollars in thousands) As of September 30, 2017 Net-Leased Assets by State Facilities Operating Beds/Units Investment[1] % of Total Investment Rent[2] % of Total Rent 1 Texas 32 3,939 $ 263,735 21.9% $ 25,883 21.1% 2 California 22 2,443 157,378 13.1% 19,942 16.2% 3 Ohio 16 1,488 192,143 16.0% 18,588 15.1% 4 Arizona 10 1,327 60,753 5.1% 8,994 7.3% 5 Idaho 14 1,001 78,069 6.5% 8,204 6.7% Top 5 States 94 10,198 752,078 62.5% 81,611 66.4% 6 Utah 11 1,201 77,322 6.4% 6,036 4.9% 7 Iowa 15 986 53,488 4.4% 5,455 4.4% 8 Washington 9 747 49,636 4.1% 5,115 4.2% 9 Colorado 6 633 40,819 3.4% 4,062 3.3% 10 Illinois 6 554 32,871 2.7% 3,287 2.7% Top 10 States 141 14,319 1,006,214 83.5% 105,566 85.9% All Other States 30 2,476 196,261 16.5% 17,313 14.1% Total[3] 171 16,795 $ 1,202,475 100.0% $ 122,879 100.0%


 
12 Lease Maturities Lease Maturity Year % of Re nt Notes: [1] Lease Maturity Year represents the scheduled expiration year of the primary term of the lease and does not include tenant extension options, if any. [2] Investment for pre-spin properties represents Ensign's gross book value. For post-spin properties, Investment represents CareTrust REIT’s cumulative capital investment, excluding our three operated seniors housing properties and our two preferred equity investments. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [3] Rent represents September 2017 rent, annualized. (dollars in thousands) Broadmoor Medical Lodge (Rockwall, TX) As of September 30, 2017 Lease Maturity Year[1] Investment[2] % of Total Investment Rent[3] % of Total Rent 2019 $ 34,415 2.9% $ 3,174 2.6% 2026 70,272 5.8% 7,479 6.1% 2027 55,929 4.7% 5,718 4.7% 2028 79,914 6.5% 7,776 6.3% 2029 96,580 8.0% 8,185 6.7% 2030 309,662 25.8% 29,855 24.3% 2031 369,920 30.8% 34,800 28.3% 2032 93,976 7.8% 12,210 9.9% 2033 64,491 5.4% 11,225 9.1% 2034 12,733 1.1% 1,135 0.9% 2035 — — — —% 2036 14,583 1.2% 1,322 1.1% $ 1,202,475 100.0% $ 122,879 100.0% 2019 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2.6% 6.1% 4.7% 6.3% 6.7% 24.3% 28.3% 9.9% 9.1% 0.9% 1.1%


 
13 The Rio at Cabezon (Rio Rancho, NM)


 
14 Consolidated Income Statements (amounts in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Revenues: Rental income $ 29,404 $ 24,179 $ 85,254 $ 67,857 Tenant reimbursements 2,543 2,089 7,253 5,815 Independent living facilities 825 766 2,407 2,177 Interest and other income 176 72 1,471 587 Total revenues 32,948 27,106 96,385 76,436 Expenses: Depreciation and amortization 9,745 8,248 28,156 23,433 Interest expense 5,592 5,743 17,690 17,044 Loss on the extinguishment of debt — — 11,883 326 Property taxes 2,543 2,089 7,253 5,815 Independent living facilities 698 708 2,003 1,926 Impairment of real estate investment — — 890 — Acquisition costs — 203 — 203 General and administrative 3,059 2,283 8,426 6,724 Total expenses 21,637 19,274 76,301 55,471 Other income: Gain on disposition of other real estate investment — — 3,538 — Net income $ 11,311 $ 7,832 $ 23,622 $ 20,965 Earnings per common share: Basic $ 0.15 $ 0.13 $ 0.33 $ 0.38 Diluted $ 0.15 $ 0.13 $ 0.33 $ 0.38 Weighted-average number of common shares: Basic 75,471 57,595 71,693 54,403 Diluted 75,471 57,595 71,693 54,403 Dividends declared per common share $ 0.185 $ 0.17 $ 0.555 $ 0.51


 
Reconciliation of EBITDA, FFO and FAD 15 (amounts in thousands) Quarter Ended September 30, 2016 Quarter Ended December 31, 2016 Quarter Ended March 31, 2017 Quarter Ended June 30, 2017 Quarter Ended September 30, 2017 Net income $ 7,832 $ 8,388 $ 10,281 $ 2,030 $ 11,311 Depreciation and amortization 8,248 8,532 9,076 9,335 9,745 Interest expense 5,743 5,829 5,879 6,219 5,592 Amortization of stock-based compensation 339 339 536 600 656 EBITDA 22,162 23,088 25,772 18,184 27,304 Acquisition costs 203 2 — — — Loss on sale of real estate — 265 — — — Loss on the extinguishment of debt — — — 11,883 — Deferred preferred return — — — (544) — Impairment of real estate investment — — — 890 — Gain on disposition of other real estate investment — — — (3,538) — Normalized EBITDA $ 22,365 $ 23,355 $ 25,772 $ 26,875 $ 27,304 Net Income $ 7,832 $ 8,388 $ 10,281 $ 2,030 $ 11,311 Real estate related depreciation and amortization 8,223 8,505 9,050 9,309 9,717 Loss on sale of real estate — 265 — — — Impairment of real estate investment — — — 890 — Gain on disposition of other real estate investment — — — (3,538) — Funds from Operations (FFO) 16,055 17,158 19,331 8,691 21,028 Acquisition costs 203 2 — — — Deferred preferred return — — — (544) — Effect of the senior unsecured notes payable redemption — — — 12,475 — Normalized FFO $ 16,258 $ 17,160 $ 19,331 $ 20,622 $ 21,028


 
Reconciliation of EBITDA, FFO and FAD 16 [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. (amounts in thousands, except per share data) Quarter Ended September 30, 2016 Quarter Ended December 31, 2016 Quarter Ended March 31, 2017 Quarter Ended June 30, 2017 Quarter Ended September 30, 2017 Net income $ 7,832 $ 8,388 $ 10,281 $ 2,030 $ 11,311 Real estate related depreciation and amortization 8,223 8,505 9,050 9,309 9,717 Amortization of deferred financing fees 561 561 561 529 484 Amortization of stock-based compensation 339 339 536 600 656 Straight-line rental income (78) (72) (72) (43) (2) Loss on sale of real estate — 265 — — — Impairment of real estate investment — — — 890 — Gain on disposition of other real estate investment — — — (3,538) — Funds Available for Distribution (FAD) 16,877 17,986 20,356 9,777 22,166 Acquisition costs 203 2 — — — Deferred preferred return — — — (544) — Effect of the senior unsecured notes payable redemption — — — 12,475 — Normalized FAD $ 17,080 $ 17,988 $ 20,356 $ 21,708 $ 22,166 FFO per share $ 0.28 $ 0.28 $ 0.29 $ 0.12 $ 0.28 Normalized FFO per share $ 0.28 $ 0.28 $ 0.29 $ 0.28 $ 0.28 FAD per share $ 0.29 $ 0.29 $ 0.30 $ 0.13 $ 0.29 Normalized FAD per share $ 0.30 $ 0.29 $ 0.30 $ 0.30 $ 0.29 Diluted weighted average shares outstanding [1] 57,739 61,028 67,133 72,803 75,659 (continued)


 
Consolidated Balance Sheets 17 (dollars in thousands) September 30, 2017 December 31, 2016 Assets: Real estate investments, net $ 1,089,089 $ 893,918 Other real estate investments 5,368 13,872 Cash and cash equivalents 14,808 7,500 Accounts and other receivables 12,961 5,896 Prepaid expenses and other assets 1,803 1,369 Deferred financing costs, net 1,989 2,803 Total assets $ 1,126,018 $ 925,358 Liabilities and Equity: Senior unsecured notes payable, net $ 294,221 $ 255,294 Senior unsecured term loan, net 99,493 99,422 Unsecured revolving credit facility 95,000 95,000 Accounts payable and accrued liabilities 17,382 12,137 Dividends payable 14,046 11,075 Total liabilities 520,142 472,928 Equity: Common stock 755 648 Additional paid-in capital 782,707 611,475 Cumulative distributions in excess of earnings (177,586) (159,693) Total equity 605,876 452,430 Total liabilities and equity $ 1,126,018 $ 925,358


 
18 Key Debt Metrics [1] Debt to Normalized EBITDA compares total debt as of the last day of the quarter to the annualized Normalized EBITDA for the quarter. [2] Debt to Enterprise Value compares total 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. The Rio at Fox Hollow (Brownsville, TX) Debt to Normalized EBITDA [1] Debt to Enterprise Value [2]


 
19 Debt Summary Notes: [1] Funds can be borrowed at applicable LIBOR plus 1.95% to 2.60% or at the Base Rate (as defined) plus 0.95% to 1.6%. [2] Funds can be borrowed at applicable LIBOR plus 1.75% to 2.40% or at the Base Rate (as defined) plus 0.75% to 1.4%. [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 Year Principa l (dollars in thousands) September 30, 2017 Debt Interest Rate Maturity Date Principal % of Principal Deferred Loan Costs Net Carrying Value Fixed Rate Debt Senior unsecured notes payable 5.250% 2025 $ 300,000 60.6% $ (5,779) $ 294,221 Floating Rate Debt Senior unsecured term loan 3.185% [1] 2023 100,000 20.2% (507) 99,493 Unsecured revolving credit facility 2.986% [2] 2020 [3] 95,000 19.2% — [4] 95,000 3.088% 195,000 39.4% (507) 194,493 Total Debt 4.398% $ 495,000 100.0% $ (6,286) $ 488,714


 
Updated 2017 Guidance (shares in thousands) 20 See “Glossary” for additional information. Low High Net income $ 0.51 $ 0.52 Real estate related depreciation and amortization 0.52 0.52 Impairment of real estate investment 0.01 0.01 Gain on disposition of other real estate investment (0.05) (0.05) Funds from Operations (FFO) 0.99 1.00 Deferred preferred return (0.00) (0.00) Effect of the senior unsecured notes payable redemption 0.17 0.17 Normalized FFO $ 1.16 $ 1.17 Net income $ 0.51 $ 0.52 Real estate related depreciation and amortization 0.52 0.52 Amortization of deferred financing fees 0.03 0.03 Amortization of stock-based compensation 0.03 0.03 Straight-line rental income (0.01) (0.01) Impairment of real estate investment 0.01 0.01 Gain on disposition of other real estate investment (0.05) (0.05) Funds Available for Distribution (FAD) 1.04 1.05 Deferred preferred return (0.00) (0.00) Effect of the senior unsecured notes payable redemption 0.17 0.17 Normalized FAD $ 1.21 $ 1.22 Weighted average shares outstanding: Diluted 72,959 72,959


 
21 Equity Capital Transactions Notes: [1] Represents average follow-on equity offerings per-share price. Follow-On Equity Offering Activity At-the-Market Offering Activity 2015 2016 Q1 Q2 Q3 Q4 Total Number of Shares (000s) 16,330 — 9,775 — 6,325 16,100 Public Offering Price per Share $ 10.50 $ — $ 11.35 $ — $ 13.35 $ 12.14 [1] Gross Proceeds (000s) $ 171,465 $ — $ 110,946 $ — $ 84,439 $ 195,385 2016 2017 Q1 Q2 Q3 Total Number of Shares (000s) 924 7,175 3,399 — 10,574 Average Price per Share $ 15.31 $ 15.31 $ 18.82 $ — $ 16.43 Gross Proceeds (000s) $ 14,147 $ 109,813 $ 63,947 $ — $ 173,760


 
Other Financial Highlights 22 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. See “Glossary” for additional information. Dividend History Normalized FFO Payout Ratio [1][2] Normalized FFO per Share [2] Normalized FFO [2] 6/ 30 /2 01 5 9/ 30 /2 01 5 12 /3 1/ 20 15 3/ 31 /2 01 6 6/ 30 /2 01 6 9/ 30 /2 01 6 12 /3 1/ 20 16 3/ 31 /2 01 7 6/ 30 /2 01 7 9/ 30 /2 01 7 $0.16 $0.16 $0.16 $0.17 $0.17 $0.17 $0.17 $0.185 $0.185 $0.185 6/ 30 /2 01 5 9/ 30 /2 01 5 12 /3 1/ 20 15 3/ 31 /2 01 6 6/ 30 /2 01 6 9/ 30 /2 01 6 12 /3 1/ 20 16 3/ 31 /2 01 7 6/ 30 /2 01 7 9/ 30 /2 01 7 64.0% 80.0% 64.0% 63.0% 63.0% 60.7% 60.7% 63.8% 66.1% 66.1% 6/ 30 /2 01 5 9/ 30 /2 01 5 12 /3 1/ 20 15 3/ 31 /2 01 6 6/ 30 /2 01 6 9/ 30 /2 01 6 12 /3 1/ 20 16 3/ 31 /2 01 7 6/ 30 /2 01 7 9/ 30 /2 01 7 $0.25 $0.20 $0.25 $0.27 $0.27 $0.28 $0.28 $0.29 $0.28 $0.28 6/ 30 /2 01 5 9/ 30 /2 01 5 12 /3 1/ 20 15 3/ 31 /2 01 6 6/ 30 /2 01 6 9/ 30 /2 01 6 12 /3 1/ 20 16 3/ 31 /2 01 7 6/ 30 /2 01 7 9/ 30 /2 01 7 $7,934 $7,731 $12,021 $13,098 $15,498 $16,258 $17,160 $19,331 $20,622 $21,028


 
23 Glossary 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 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) divided by the base rent payable to CareTrust REIT under such master lease (or other grouping) for the same period. For this supplement, the reported period is the trailing twelve-month period ended June 30, 2017. Notwithstanding the foregoing, for any facility for which CareTrust REIT has not received four consecutive quarters of post- acquisition operating reports, the quarterly EBITDAR used in this calculation is the proforma EBITDAR utilized in CareTrust REIT’s underwriting process, annualized. Beginning with the fifth quarter of reported post-acquisition operating performance, each reported quarter EBITDAR replaces the oldest underwriting proforma quarter EBITDAR, until all previously-used proforma quarters EBITDAR amounts are eliminated from the calculation. 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) divided by the base rent payable to CareTrust REIT under such master lease (or other grouping) for the same period. For this supplement, the reported period is the trailing twelve-month period ended June 30, 2017. Notwithstanding the foregoing, for any facility for which CareTrust REIT has not received four consecutive quarters of post-acquisition operating reports, the quarterly EBITDARM used in this calculation is the proforma EBITDARM utilized in CareTrust REIT’s underwriting process annualized. Beginning with the fifth quarter of reported post-acquisition operating performance, each reported quarter EBITDARM replaces the oldest underwriting proforma quarter EBITDARM, until all previously-used proforma quarters EBITDARM amounts are eliminated from the calculation. Enterprise Value Share price multiplied by the number of outstanding shares plus total outstanding debt, each as of a specified date. Funds Available for Distribution (“FAD”) FFO, excluding straight-line rental income adjustments and amortization of deferred financing fees and stock-based compensation expense.[2] 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]


 
Glossary 24 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. Normalized EBITDA EBITDA, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, such as certain acquisition costs, real estate impairment charges, losses on the extinguishment of debt, certain deferred preferred returns, 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 certain acquisition costs, certain deferred preferred returns, and the effect of the senior unsecured notes payable redemption. [2] Normalized FFO FFO, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, and certain acquisition costs, certain deferred preferred returns, and the effect of the senior unsecured notes payable redemption. [2] Occupancy A facility’s occupied operating beds/units divided by the total available operating beds/units for that facility, in each case for the trailing twelve-months ended June 30, 2017; provided that Occupancy for any facility acquired during such twelve-months period may be normalized. Seniors Housing Includes ALFs, ILFs, dedicated memory care facilities and similar facilities. Skilled Nursing Campus Facilities that include a combination of Skilled Nursing beds and Seniors Housing units. 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 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.


 
Cascadia of Nampa (Nampa, ID)