Item 5. Market for Registrant’s Common Equity
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Common Equity
Our common stock is listed on the Nasdaq Global Select Market under the symbol “CTRE.”
At February 9, 2021, we had approximately 43 stockholders of record.
To maintain REIT status, we are required each year to distribute to stockholders at least 90% of our annual REIT taxable income after certain adjustments. All distributions will be made by us at the discretion of our board of directors and will depend on our financial position, results of operations, cash flows, capital requirements, debt covenants (which include limits on distributions by us), applicable law, and other factors as our board of directors deems relevant. For example, while the Notes and our Amended Credit Agreement permit us to declare and pay any dividend or make any distribution that is necessary to maintain our REIT status, those distributions are subject to certain financial tests under the indenture governing the Notes, and therefore, the amount of cash distributions we can make to our stockholders may be limited.
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Distributions with respect to our common stock can be characterized for federal income tax purposes as taxable ordinary dividends, nondividend distributions or a combination thereof. Following is the characterization of our annual cash dividends on common stock:
Year Ended December 31,
Common Stock 2020 2019
Ordinary dividend $ 0.6435 $ 0.8120
Non-dividend distributions 0.1065 0.0880
Total taxable distribution 0.7500 0.9000
Distributions allocated to subsequent tax year (1)
0.2500 —
Total distributions declared $ 1.0000 $ 0.9000
(1) Because our aggregate 2020 cash distributions exceeded our 2020 earnings and profits, the cash distribution declared in the fourth quarter of 2020 and paid in January 2021, of $0.25 per share, will be treated as a 2021 distribution for federal income tax purposes.
Unregistered Sales of Equity Securities
During the three months ended December 31, 2020, we acquired shares of our common stock held by an employee who tendered shares to satisfy tax withholding obligations upon the vesting of previously issued restricted stock awards. Specifically, the number of shares of common stock acquired from the employee and the average prices paid per share for each month in the fourth quarter ended December 31, 2020 are as follows:
Period Total Number of Shares Purchased Average Price Paid per Share
October 1 - October 31, 2020 533 $ 17.10
November 1 - November 30, 2020 — $ —
December 1 - December 31, 2020 — $ —
Total 533 $ 17.10
On March 20, 2020, our board of directors authorized a share repurchase program to repurchase up to $150.0 million of outstanding shares of our common stock (the “Repurchase Program”). Repurchases under the Repurchase Program, which expires on March 31, 2023, may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions and at such times as shall be permitted by applicable securities laws and determined by management. Repurchases under the Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Exchange Act. We expect to finance any share repurchases under the Repurchase Program using available cash and may also use short-term borrowings under the Revolving Facility. We did not repurchase any shares of common stock under the Repurchase Program during the year ended December 31, 2020. The Repurchase Program may be modified, discontinued or suspended at any time.
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Stock Price Performance Graph
The graph below compares the cumulative total return of our common stock, the S&P 500 Index, the S&P 500 REIT Index, the RMS (MSCI U.S. REIT Total Return Index) and the SNL U.S. REIT Healthcare Index for the period from December 31, 2015 to December 31, 2020. Total cumulative return is based on a $100 investment in CareTrust REIT common stock and in each of the indices at the market close on December 31, 2015 and assumes quarterly reinvestment of dividends before consideration of income taxes. Stockholder returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG S&P 500, S&P 500 REIT INDEX, RMS, SNL US REIT HEALTHCARE AND CARETRUST REIT, INC.
RATE OF RETURN TREND COMPARISON
DECEMBER 31, 2015 - DECEMBER 31, 2020
(DECEMBER 31, 2015 = $100)
Stock Price Performance Graph Total Return
The stock performance graph shall not be deemed soliciting material or to be filed with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or to the liabilities of Section 18 of the Exchange Act, nor shall it be incorporated by reference into any past or future filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically request that it be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act of 1933 or the Exchange Act
December 31,
2015 2016 2017 2018 2019 2020
CareTrust REIT Inc. $ 100.00 $ 146.86 $ 167.48 $ 193.93 $ 225.46 $ 256.27
S&P 500 $ 100.00 $ 111.96 $ 136.40 $ 130.42 $ 171.49 $ 203.04
RMS $ 100.00 $ 108.60 $ 114.11 $ 108.89 $ 137.03 $ 126.65
SNL US REIT Healthcare $ 100.00 $ 105.24 $ 106.44 $ 114.12 $ 138.67 $ 129.69
S&P 500 Real Estate $ 100.00 $ 103.39 $ 114.61 $ 112.06 $ 144.58 $ 141.44
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ITEM 6. Selected Financial Data
The following table sets forth selected financial data and other data for our company on a historical basis. The following data should be read in conjunction with our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Annual Report on Form 10-K. Our historical operating results may not be comparable to our future operating results. The comparability of the selected financial data presented below is significantly affected by our acquisitions and new investments in each of the years presented. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
As of or For the Year Ended December 31,
2020 2019 2018 2017 2016
(dollars in thousands, except per share amounts)
Income statement data:
Total revenues $ 178,332 $ 163,401 $ 156,941 $ 132,982 $ 104,679
Income before provision for income taxes 80,867 46,359 57,923 25,874 29,353
Net income 80,867 46,359 57,923 25,874 29,353
Net income per share, basic 0.85 0.49 0.73 0.35 0.52
Net income per share, diluted 0.85 0.49 0.72 0.35 0.52
Balance sheet data:
Total assets $ 1,503,559 $ 1,518,861 $ 1,291,762 $ 1,184,986 $ 925,358
Senior unsecured notes payable, net 296,669 295,911 295,153 294,395 255,294
Senior unsecured term loan, net 198,925 198,713 99,612 99,517 99,422
Unsecured revolving credit facility 50,000 60,000 95,000 165,000 95,000
Total equity 914,142 927,591 768,247 594,617 452,430
Other financial data:
Dividends declared per common share $ 1.00 $ 0.90 $ 0.82 $ 0.74 $ 0.68
FFO(1) 133,617 113,029 101,536 62,275 61,483
FAD(1) 139,280 117,751 104,989 66,406 65,118
(1) We believe that net income, as defined by U.S. generally accepted accounting principles (“GAAP”), is the most appropriate earnings measure. We also believe that 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 as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate related depreciation and amortization and real estate impairment charges. We define FAD as FFO excluding noncash income and expenses such as amortization of stock-based compensation, amortization of deferred financing costs and the effect of straight-line rent. We believe that the use of FFO and 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. We consider FFO and 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, by excluding noncash income and expenses such as amortization of stock-based compensation, amortization of deferred financing costs, and the effect of straight-line rent, FFO and FAD can help investors compare our operating performance between periods and to other REITs. However, our computation of FFO and FAD may not be comparable to FFO and 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 we do. Further, FFO and FAD 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 our liquidity or operating performance.
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The following table reconciles our calculations of FFO and FAD for the five years ended December 31, 2020, 2019, 2018, 2017 and 2016 to net income, the most directly comparable financial measure according to GAAP, for the same periods:
For the Year Ended December 31,
2020 2019 2018 2017 2016
(dollars in thousands)
Net income $ 80,867 $ 46,359 $ 57,923 $ 25,874 $ 29,353
Real estate related depreciation and amortization 52,713 51,755 45,664 39,049 31,865
Loss (gain) on sale of real estate 37 (1,777) (2,051) — 265
Impairment of real estate investments — 16,692 — 890 —
Gain on disposition of other real estate investment — — — (3,538) —
FFO 133,617 113,029 101,536 62,275 61,483
Amortization of deferred financing costs 1,950 2,003 1,938 2,059 2,239
Amortization of stock-based compensation 3,790 4,104 3,848 2,416 1,546
Straight-line rental income (77) (1,385) (2,333) (344) (150)
FAD $ 139,280 $ 117,751 $ 104,989 $ 66,406 $ 65,118