What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-02 compared with 2024-05-02 · 268 added, 184 removed, 474 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Real estate investments, net $ 1,706,231 $ 1,567,119

Other real estate related investments (including accrued interest of $ 2,152 as of March 31, 2024 and $ 1,727 as of December 31, 2023)

Other real estate related investments (including accrued interest of $ 3,540 as of June 30, 2024 and $ 1,727 as of December 31, 2023)

433,532 180,368

8 unchanged sentences

Senior unsecured term loan, net 199,665 199,559

Secured borrowing 75,000 —

Accounts payable, accrued liabilities and deferred rent liabilities 37,112 33,992

3 unchanged sentences

Preferred stock, $ 0.01 par value;

100,000,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023

100,000,000 shares authorized, no shares issued and outstanding as of June 30, 2024 and December 31, 2023

Common stock, $ 0.01 par value;

500,000,000 shares authorized, 141,712,165 and 129,992,796 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

500,000,000 shares authorized, 153,881,933 and 129,992,796 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 2,456,187 1,883,147

6 unchanged sentences

CARETRUST REIT, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2024 2023 2024 2023

Rental income $ 55,407 $ 47,745 $ 108,909 $ 93,908

8 unchanged sentences

Total expenses 56,617 51,914 90,336 82,769

Gain (loss) on sale of real estate, net 11 ( 70 )

Gain on sale of real estate, net 21 2,028 32 1,958

Unrealized loss on other real estate related investments, net ( 1,877 ) ( 2,151 ) ( 2,489 ) ( 2,605 )

Total other loss ( 1,856 ) ( 123 ) ( 2,457 ) ( 647 )

Net income 28,750 19,227

Net income attributable to noncontrolling interests 4 —

Net income attributable to CareTrust REIT, Inc.

Net income (loss) 10,418 ( 484 ) 39,168 18,743

Net loss attributable to noncontrolling interests ( 340 ) — ( 336 ) —

Net income (loss) attributable to CareTrust REIT, Inc.

$ 10,758 $ ( 484 ) $ 39,504 $ 18,743

Earnings per common share attributable to CareTrust REIT, Inc:

Earnings (loss) per common share attributable to CareTrust REIT, Inc:

Basic $ 0.07 $ ( 0.01 ) $ 0.28 $ 0.19

21 unchanged sentences

Balance at March 31, 2024 141,712,165 1,417 2,152,454 ( 480,074 ) 1,673,797 2,299 1,676,096

Issuance of common stock, net 12,145,000 122 302,327 — 302,449 — 302,449

Vesting of stock-based compensation awards 24,768 — — — — — —

Amortization of stock-based compensation — — 1,406 — 1,406 — 1,406

Common dividends ($ 0.29 per share)

— — — ( 44,721 ) ( 44,721 ) — ( 44,721 )

Distributions to noncontrolling interests — — — — — ( 7 ) ( 7 )

Contributions from noncontrolling interests — — — — — 132 132

Net income (loss) — — — 10,758 10,758 ( 340 ) 10,418

Balance at June 30, 2024 153,881,933 $ 1,539 $ 2,456,187 $ ( 514,037 ) $ 1,943,689 $ 2,084 $ 1,945,773

See accompanying notes to condensed consolidated financial statements.

13 unchanged sentences

Balance at March 31, 2023 99,098,090 991 1,244,793 ( 405,465 ) 840,319 — 840,319

Vesting of stock-based compensation awards 25,992 — — — — — —

Amortization of stock-based compensation — — 924 — 924 — 924

Common dividends ($ 0.28 per share)

— — — ( 27,737 ) ( 27,737 ) — ( 27,737 )

Net loss — — — ( 484 ) ( 484 ) — ( 484 )

Balance at June 30, 2023 99,124,082 $ 991 $ 1,245,717 $ ( 433,686 ) $ 813,022 $ — $ 813,022

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities:

3 unchanged sentences

Amortization of deferred financing costs 1,228 1,217

Unrealized losses on other real estate related investments, net 612 454

Unrealized loss on other real estate related investments, net 2,489 2,605

Amortization of stock-based compensation 3,526 1,860

Straight-line rental income 14 14

Amortization of lease incentive 4 —

Amortization of below market rent ( 1,150 ) —

Noncash interest income ( 1,813 ) 184

(Gain) loss on sale of real estate, net ( 11 ) 70

Gain on sale of real estate, net ( 32 ) ( 1,958 )

Impairment of real estate investments 28,455 23,278

7 unchanged sentences

Purchases of equipment, furniture and fixtures and improvements to real estate ( 1,323 ) ( 6,380 )

Preferred equity investments ( 9,000 ) —

Investment in real estate related investments and other loans receivable ( 244,825 ) ( 27,262 )

5 unchanged sentences

Proceeds from the issuance of common stock, net 572,236 ( 629 )

Proceeds from the secured borrowing 75,000 —

Borrowings under unsecured revolving credit facility — 155,000

4 unchanged sentences

Distributions to noncontrolling interests ( 54 ) —

Net cash provided by (used in) financing activities 231,146 ( 19,410 )

Net increase in cash and cash equivalents 156,725 14,892

Net cash provided by financing activities 567,528 97,625

Net increase (decrease) in cash and cash equivalents 200,686 ( 12,033 )

Cash and cash equivalents as of the beginning of period 294,448 13,178

11 unchanged sentences

Description of Business— CareTrust REIT, Inc.’s (“CareTrust REIT” or the “Company”) primary business consists of acquiring, financing, developing and owning real property to be leased to third-party tenants in the healthcare sector.

As of March 31, 2024, the Company owned directly or through a joint venture and leased to independent operators, 228 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 24,189 operational beds and units located in 29 states with the highest concentration of properties by rental income located in California and Texas.

As of March 31, 2024, the Company also had other real estate related investments consisting of one preferred equity investment, nine real estate secured loans receivable and four mezzanine loans receivable with a carrying value of $ 233.3 million.

As of June 30, 2024, the Company owned, directly or through joint ventures, and leased to independent operators 235 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 25,058 operational beds and units located in 30 states with the highest concentration of properties by rental income located in California and Texas.

As of June 30, 2024, the Company also had other real estate related investments consisting of two preferred equity investments, 11 real estate secured loans receivable and four mezzanine loans receivable with a carrying value of $ 433.5 million.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

All intercompany transactions and account balances within the Company have been eliminated, and net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.

Transfers of financial assets —The Company accounts for transfers of financial assets as sales when it has surrendered control over the related assets.

Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred.

Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings.

Accordingly, the related assets remain on the Company’s balance sheet and continue to be reported and accounted for as if the transfer had not occurred.

Cash proceeds from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions.

REAL ESTATE INVESTMENTS, NET

The following table summarizes the Company’s investment in owned properties, and properties held in consolidated joint ventures, held for use as of March 31, 2024 and December 31, 2023 (dollars in thousands):

March 31, 2024 December 31, 2023

The following table summarizes the Company’s investment in owned properties, and properties held in consolidated joint ventures, held for use as of June 30, 2024 and December 31, 2023 (dollars in thousands):

June 30, 2024 December 31, 2023

Land $ 326,089 $ 279,276

5 unchanged sentences

Real estate investments, net $ 1,706,231 $ 1,567,119

As of March 31, 2024, 223 of the Company’s 228 facilities were leased to various operators under triple-net leases.

All of these leases contain annual escalators based on the percentage change in the Consumer Price Index (“CPI”) (but not less than zero), some of which are subject to a cap, or fixed rent escalators.

As of June 30, 2024, all of the Company’s owned and held for investment facilities were leased to various operators under triple-net leases.

During the second and third quarters of 2022, the Company entered into triple-net lease agreements for two of the Company’s facilities which are being repurposed to behavioral health facilities.

Two of the Company’s 228 facilities are non-operational and are leased under a long term lease with rent commencing 12 months following lease commencement.

In addition, as of March 31, 2024, one facility is non-operational and held for sale.

As of March 31, 2024, 13 facilities were held for sale.

All of the triple-net leases contain annual escalators based on the percentage change in the Consumer Price Index (“CPI”) (but not less than zero), some of which are subject to a cap, or fixed rent escalators.

As of June 30, 2024, 20 facilities were held for sale.

See Note 4, Impairment of Real Estate Investments, Assets Held for Sale and Asset Sales, for additional information.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

As of March 31, 2024, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, assets held for sale and assets being repurposed, was as follows (dollars in thousands):

2024 (nine months) $ 156,186

As of June 30, 2024, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, assets held for sale and assets being repurposed, was as follows (dollars in thousands):

2024 (six months) $ 110,578

Thereafter 980,405

8 unchanged sentences

SNF 1 March 2029 4/1/2022 (5)

SNF / Campus 1 October 2032 1/1/2024 (6)

SNF 4 November 2034 12/1/2024 (5)

SNF / Campus 2 October 2032 11/1/2026 (6)

(1) Excludes a purchase option on an 11 building SNF portfolio classified as held for sale as of March 31, 2024 and representing $ 5.1 million of current cash rent.

SNF / Campus 1 May 2034 6/1/2027 (9)

SNF / Campus 1 May 2034 6/1/2028 (9)

(1) Excludes a purchase option on an 11 building SNF portfolio classified as held for sale as of June 30, 2024 and representing $ 5.1 million of current cash rent.

The tenant is currently not eligible to elect the option.

3 unchanged sentences

B - Fixed capitalization rate on lease revenue.

(4) Based on annualized cash revenue for contracts in place as of March 31, 2024.

(4) Based on annualized cash revenue for contracts in place as of June 30, 2024.

(5) Option window is open until the expiration of the lease term.

3 unchanged sentences

The current cash rent shown is an average of the range of $ 3.2 million to $ 3.4 million.

(9) Purchase option window is open for nine months from the option period open date.

(10) Purchase option provides for purchase of one of five facilities.

The current cash rent shown is an average of the range of $ 1.0 million to $ 1.6 million.

If the operator exercises its option to extend the term of the master lease, beginning on June 1, 2036 and ending nine months thereafter, the operator will have a purchase option for all facilities then remaining in the master lease.

Rental Income

The following table summarizes components of the Company’s rental income (dollars in thousands):

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Rental Income 2024 2023 2024 2023

2 unchanged sentences

Straight-line rent ( 7 ) ( 7 ) ( 14 ) ( 14 )

Amortization of lease incentive ( 4 ) — ( 4 ) —

Amortization of below-market lease intangible 575 — 1,150 —

Total $ 55,407 $ 47,745 $ 108,909 $ 93,908

(1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company.

For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received.

Tenant operating expense reimbursements for the three months ended March 31, 2024 and 2023 were $ 1.5 million and $ 0.7 million, respectively.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

(1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company.

For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received.

Tenant operating expense reimbursements for the three months ended June 30, 2024 and 2023 were $ 1.9 million and $ 1.2 million, respectively.

Tenant operating expense reimbursements for the six months ended June 30, 2024 and 2023 were $ 3.4 million and $ 1.9 million, respectively.

Recent Real Estate Acquisitions

The following table summarizes the Company’s acquisitions for the three months ended March 31, 2024 (dollars in thousands):

The following table summarizes the Company’s acquisitions for the six months ended June 30, 2024 (dollars in thousands):

Type of Property Purchase Price (1)

3 unchanged sentences

Multi-service campuses (4)

78,154 6,268 4 575

Assisted living (5)

4 unchanged sentences

(3) The number of beds/units includes operating beds at the acquisition date.

(4) Includes two multi-service campuses held through a joint venture.

See Note 11, Variable Interest Entities , for additional information.

(5) Includes one ALF held through a joint venture.

1 unchanged sentence

Lease Amendments and Terminations

New Bayshire Lease.

On April 1, 2024, a new master lease with affiliates of Bayshire, LLC (“Bayshire”) commenced to lease one SNF that was previously under a short-term master lease until Bayshire received regulatory approval.

The short-term master lease was terminated.

The Bayshire master lease had a term of approximately 15 years at the date of the lease, with two five-year renewal options and 3 % fixed rent escalators.

Initial annual cash rent under the new Bayshire master lease was $ 2.6 million.

The Bayshire lease provides for a rent deferral of $ 0.4 million in the first year to be repaid in 15 installments beginning in year two.

Amended Eduro Lease and Amended Ensign Lease.

On March 1, 2024, operations of two SNFs in Colorado operated by affiliates of Eduro Healthcare, LLC (“Eduro”) were transferred to subsidiaries of The Ensign Group, Inc.

In connection with the transfer, the Company partially terminated the Eduro master lease and amended one existing triple-net master lease with Ensign to include the two SNFs and extended the initial lease term by 15 years.

The applicable Ensign master lease, as amended, had a remaining term at the date of amendment of approximately 20 years with two five-year renewal options and CPI-based rent escalators.

Annual cash rent under the applicable Ensign master lease, as amended, increased by approximately $ 2.1 million and annual cash rent under the Eduro master lease, as amended, decreased by the same amount.

New Embassy Lease and Hillstone Lease Termination.

1 unchanged sentence

(“Hillstone”).

Effective January 1, 2024, in connection with the December 31, 2023 lease termination, one SNF was removed from the Hillstone master lease and was subsequently classified as held for sale as of March 31, 2024.

Effective January 1, 2024, in connection with the December 31, 2023 lease termination, one SNF was removed from the Hillstone master lease, was classified as held for sale as of March 31, 2024 and was sold during the three months ended June 30, 2024.

See Note 4, Impairment of Real Estate Investments, Assets Held for Sale and Asset Sales , for additional information.

3 unchanged sentences

Initial annual cash rent under the lease is approximately $ 0.6 million and the master lease provides Embassy with a partial rent abatement until required authorizations with respect to the ALF portion of the facility are obtained and occupancy levels reach a certain percentage.

Amended Eduro Lease and Amended Ensign Lease.

On March 1, 2024, operations of two SNFs in Colorado operated by affiliates of Eduro Healthcare, LLC (“Eduro”) were transferred to subsidiaries of The Ensign Group, Inc.

The applicable Ensign master lease, as amended, had a remaining term at the date of amendment of approximately 20 years with two five-year renewal options and CPI-based rent escalators.

Noble VA Lease Termination and New Pennant Lease.

5 unchanged sentences

Annual cash rent under the new lease was approximately $ 0.8 million and the master lease provides Pennant with three months deferred rent to be repaid before the expiration or termination of the lease.

IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE AND ASSET SALES

Impairment of Real Estate Investments Held for Sale

During the three months ended March 31, 2024, the Company recognized aggregate impairment charges of $ 2.7 million related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated income statements.

During the three months ended March 31, 2023, the Company recognized aggregate impairment charges of $ 1.9 million related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated income statements.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

As of March 31, 2024, there were 13 facilities classified as held for sale, all of which have been marked down to fair value less estimated costs to sell.

IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE AND ASSET SALES

Impairment of Real Estate Investments Held for Sale

During the three and six months ended June 30, 2024, the Company recognized aggregate impairment charges of $ 25.7 million and $ 28.5 million, respectively, related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated statements of operations.

During the three and six months ended June 30, 2023, the Company recognized aggregate impairment charges of $ 21.4 million and $ 23.3 million, respectively, related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated statements of operations.

As of June 30, 2024, there were 20 facilities classified as held for sale, all of which have been marked down to fair value less estimated costs to sell.

The fair values of the assets held for sale were based on estimated sales prices, which are considered to be Level 3 measurements within the fair value hierarchy.

2 unchanged sentences

There are inherent uncertainties in making these assumptions.

For the Company’s impairment calculations during the three months ended March 31, 2024, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $ 12,000 to $ 36,000 , with a weighted average price per unit of $ 16,000 .

For the Company’s impairment calculations during the six months ended June 30, 2024, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $ 11,000 to $ 46,000 , with a weighted average price per unit of $ 24,000 .

One property, with no bed rights, was reclassified to held for sale during the three months ended March 31, 2024.

The Company plans to dispose of this facility and does not expect to receive a material amount upon disposition.

For the Company’s impairment calculations during the three months ended March 31, 2023, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $ 20,000 to $ 85,000 , with a weighted average price per unit of $ 32,000 .

The Company disposed of this facility during the three months ended June 30, 2024 and recorded a gain on sale of approximately $ 21,000 .

For the Company’s impairment calculations during the six months ended June 30, 2023, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $ 18,000 to $ 35,000 , with a weighted average price per unit of $ 21,000 .

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Asset Sales and Held for Sale Reclassifications

The following table summarizes the Company’s dispositions for the three months ended March 31, 2024 and 2023 (dollars in thousands):

Three Months Ended March 31,

The following table summarizes the Company’s dispositions for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Number of facilities 1 3 3 4

2 unchanged sentences

Net carrying value 73 11,206 1,108 14,506

Net gain (loss) on sale $ 11 $ ( 70 )

(1) Net sales proceeds includes $ 1.0 million of seller financing in connection with the sale of one ALF in January 2024.

Net gain on sale $ 21 $ 2,028 $ 32 $ 1,958

(1) Net sales proceeds for the six months ended June 30, 2024 includes $ 1.0 million of seller financing in connection with the sale of one ALF in January 2024.

Net sales proceeds for the three and six months ended June 30, 2023 includes $ 2.0 million of seller financing in connection with the sale of one ALF in June 2023.

The following table summarizes the Company’s assets held for sale activity for the periods presented (dollars in thousands):

4 unchanged sentences

Impairment of real estate held for sale ( 28,455 ) —

March 31, 2024 $ 12,483 13

June 30, 2024 $ 28,753 20

December 31, 2022 $ 12,291 5

2 unchanged sentences

Impairment of real estate held for sale ( 23,278 ) —

March 31, 2023 $ 17,479 6

June 30, 2023 $ 21,554 15

CARETRUST REIT, INC.

1 unchanged sentence

OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS

As of March 31, 2024 and December 31, 2023, the Company’s other real estate related investments consisted of the following (dollar amounts in thousands):

Facility Count and Type As of March 31, 2024

As of June 30, 2024 and December 31, 2023, the Company’s other real estate related investments consisted of the following (dollar amounts in thousands):

Facility Count and Type As of June 30, 2024

Loans Receivable, at Fair Value:

SNF Campus ALF ILF Principal Balance as of March 31, 2024

Fair Value as of March 31, 2024

SNF Campus ALF ILF Principal Balance as of June 30, 2024

Fair Value as of June 30, 2024

Fair Value as of December 31, 2023

Weighted Average Contractual Interest Rate Maturity Date

Weighted Average Contractual Interest Rate (1), (2)

Maturity Date

Mortgage secured loans receivable 38 4 4 1 $ 357,872 $ 348,552 $ 156,769 9.1 % 5/31/2025 - 6/29/2033

5/31/2024 - 6/29/2033

Mezzanine loans receivable 40 3 2 — 77,165 74,099 21,799 12.8 % 7/25/2027 - 6/30/2032

$ 435,037 $ 422,651 $ 178,568

$ 243,362 $ 231,541 $ 178,568

(1) Rates are net of subservicing fee, if applicable.

(2) Two mortgage secured loans receivable and two mezzanine loans receivable use term secured overnight financing rate (“SOFR”), which are subject to a floor for certain of the loans.

Term SOFR used as of March 31, 2024 was 5.33 %.

Facility Count and Type As of March 31, 2024

(2) Three mortgage secured loans receivable and two mezzanine loans receivable use term secured overnight financing rate (“SOFR”), which are subject to a floor for certain of the loans.

Term SOFR used as of June 30, 2024 was 5.34 %.

Facility Count and Type As of June 30, 2024

Other Investments:

SNF Campus ALF ILF Principal Balance as of March 31, 2024

Book Value as of March 31, 2024

SNF Campus ALF ILF Principal Balance as of June 30, 2024

Book Value as of June 30, 2024

Book Value as of December 31, 2023

2 unchanged sentences

Total $ 10,782 $ 10,881 $ 1,801

The following table summarizes the Company’s other real estate related investments activity for the three months ended March 31, 2024 and 2023 (dollars in thousands):

Three Months Ended March 31,

The following table summarizes the Company’s other real estate related investments activity for the six months ended June 30, 2024 and 2023 (dollars in thousands):

Six Months Ended June 30,

Origination of other real estate related investments $ 253,840 $ 28,243

Accrued interest, net 1,813 ( 184 )

Unrealized losses on other real estate related investments, net ( 612 ) ( 454 )

Unrealized loss on other real estate related investments, net ( 2,489 ) ( 2,605 )

Prepayments of other real estate related investments — ( 15,000 )

20 unchanged sentences

The Company elected the fair value option for the mezzanine loan.

On February 2, 2024, the Company extended a $ 35.0 million mezzanine loan for a portfilio of 15 SNFs located in Virginia secured by a pledge of membership interests in an up-tier holding company of the borrower group.

On February 2, 2024, the Company extended a $ 35.0 million mezzanine loan for a portfolio of 15 SNFs located in Virginia secured by a pledge of membership interests in an up-tier holding company of the borrower group.

The Company participated in the loan alongside a co-lender pursuant to a participation agreement entered into between the Company and the co-lender.

5 unchanged sentences

The Company elected the fair value option for the mezzanine loan.

On May 1, 2024, the Company extended a $ 26.7 million mortgage loan to a skilled nursing real estate owner.

The mortgage loan is secured by two SNFs and bears interest at a rate of 9.1 %, payable monthly.

The mortgage loan is set to mature on May 1, 2031 and includes a one year extension option.

The mortgage loan may not be prepaid prior to July 31, 2029, subject to certain limited exceptions.

The mortgage loan includes a purchase option with an exercise window that opens during the initial 90-day period of each of the 4th, 5th and 6th loan years, with the purchase option price for the facilities being calculated by dividing the amount of the then annual base rent by an agreed upon lease yield.

The Company elected the fair value option for the mortgage loan.

On June 3, 2024, the Company extended a $ 165.0 million mortgage loan to a regional health care real estate owner.

The mortgage loan is secured by eight SNFs located in North Carolina and bears interest at a rate of SOFR plus 4.25 %, with a term SOFR floor of 5.15 %, payable monthly and net of a 0.25 % subservicing fee.

Commencing on June 1, 2027, monthly principal payments will be due.

The mortgage loan is set to mature on June 1, 2029, and includes two six-month extension options.

The mortgage loan may not be prepaid prior to June 1, 2026, subject to certain limited exceptions.

The Company elected the fair value option for the mortgage loan.

Concurrently with closing, KeyBank National Association purchased a $ 75.0 million participation in the mortgage loan from the Company.

See Note 7, Debt , for additional information.

In addition, on June 3, 2024, the Company funded a $ 9.0 million preferred equity investment in an uptier parent entity of the borrower under the $ 165.0 million mortgage loan described above.

The Company's initial contractual yield on its preferred equity investment is 11 %.

Prepayment of the preferred equity investment is restricted, subject to certain carveouts, prior to the senior mortgage loan being paid off in full.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Other Loans Receivables

As of March 31, 2024 and December 31, 2023, the Company’s other loans receivable, included in prepaid expenses and other assets, net on the Company’s condensed consolidated balance sheets, consisted of the following (dollars in thousands):

As of March 31, 2024

Investment Principal Balance as of March 31, 2024

Book Value as of March 31, 2024

As of June 30, 2024 and December 31, 2023, the Company’s other loans receivable, included in prepaid expenses and other assets, net on the Company’s condensed consolidated balance sheets, consisted of the following (dollars in thousands):

As of June 30, 2024

Investment Principal Balance as of June 30, 2024

Book Value as of June 30, 2024

Book Value as of December 31, 2023

3 unchanged sentences

Total $ 18,079 $ 16,051 $ 15,062

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

The following table summarizes the Company’s other loans receivable activity for the three months ended March 31, 2024 and 2023 (dollars in thousands):

Three Months Ended March 31,

The following table summarizes the Company’s other loans receivable activity for the six months ended June 30, 2024 and 2023 (dollars in thousands):

Six Months Ended June 30,

Origination of loans receivable $ 985 $ 1,019

Principal payments — ( 287 )

1 unchanged sentence

Net change in other loans receivable $ 989 $ 733

Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated income statements.

During both the three months ended March 31, 2024 and 2023, the Company had no additional expected credit loss and did not consider any loan receivable investments to be impaired.

The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the three months ended March 31, 2024 and 2023 (dollars in thousands):

For the Three Months Ended March 31,

Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated statements of operations.

During both the six months ended June 30, 2024 and 2023, the Company had no additional expected credit loss and did not consider any loan receivable investments to be impaired.

The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Investment 2024 2023 2024 2023

3 unchanged sentences

Other loans receivable 338 160 669 316

4,964 191 8,466 191

Total $ 13,484 $ 3,808 $ 23,052 $ 8,251

5 unchanged sentences

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

4 unchanged sentences

The Company does not expect that changes in classifications between levels will be frequent.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Items Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s assets measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):

Level 1 Level 2 Level 3 Balance as of March 31, 2024

The following table presents information about the Company’s assets measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):

Level 1 Level 2 Level 3 Balance as of June 30, 2024

Mortgage secured loans receivable $ — $ — $ 348,552 $ 348,552

11 unchanged sentences

Accrued interest, net 1,147 585

Unrealized losses on other real estate related investments, net ( 311 ) ( 301 )

Balance as of March 31, 2024

Unrealized loss on other real estate related investments, net ( 2,039 ) ( 450 )

Balance as of June 30, 2024

$ 348,552 $ 74,099

Real estate secured and mezzanine loans receivable:

The fair value of the secured and mezzanine loans receivables were estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements.

The fair values of the secured and mezzanine loans receivables were estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements.

As such, the Company classifies each instrument as Level 3 due to the significant unobservable inputs used in determining market interest rates for investments with similar terms.

During the three months ended March 31, 2024, the C ompany recorded an unrealized loss of $ 0.8 million on the Company’s secured and mezzanine loans receivable due to rising interest rates, partially offset by unrealized gains of $ 0.2 million due to increases in expected cash flows on floating rate loans.

During the three months ended March 31, 2023, the Company recorded an unrealized loss of $ 1.0 million related to one mezzanine loan receivable due to rising interest rates, partially offset by a reversal of a previously recognized unrealized loss of $ 0.5 million related to the repayment of one mezzanine loan receivable.

During the three and six months ended June 30, 2024, the Company recorded an unrealized loss of $ 2.4 million and $ 3.2 million, respectively, on the Company’s secured and mezzanine loans receivable due to rising interest rates, partially offset by unrealized gains of $ 0.5 million and $ 0.7 million, respectively, due to increases in expected cash flows on floating rate loans.

Future changes in market interest rates or collateral value could materially impact the estimated discounted cash flows that are used to determine the fair value of the secured and mezzanine loans receivable.

As of March 31, 2024 and December 31, 2023, the Company did no t have any loans that were 90 days or more past due.

The following table shows the quantitative information about unobservable inputs related to the Level 3 fair value measurements comprising the investments in secured and mezzanine loans receivables as of March 31, 2024:

Type Book Value as of March 31, 2024

Valuation Technique Unobservable Inputs Range

Mortgage secured loans receivable $ 157,265 Discounted cash flow Discount Rate 9 % - 15 %

Mezzanine loan receivable 74,276 Discounted cash flow Discount Rate 12 % - 15 %

For the three months ended March 31, 2024, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy.

As of June 30, 2024 and December 31, 2023, the Company did no t have any loans that were 90 days or more past due.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Type Book Value as of June 30, 2024

Valuation Technique Unobservable Inputs Range

Mortgage secured loans receivable $ 348,552 Discounted cash flow Discount Rate 9 % - 16 %

Mezzanine loans receivable 74,099 Discounted cash flow Discount Rate 12 % - 16 %

For the six months ended June 30, 2024, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy.

Items Disclosed at Fair Value

1 unchanged sentence

The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments.

A summary of the face value, carrying amount and fair value of the preferred equity investment and the Notes (as defined in Note 7, Debt, below) as of March 31, 2024 and December 31, 2023 is as follows (dollars in thousands):

March 31, 2024 December 31, 2023

A summary of the face value, carrying amount and fair value of the Company’s preferred equity investments and the Notes (as defined in Note 7, Debt, below) as of June 30, 2024 and December 31, 2023 is as follows (dollars in thousands):

June 30, 2024 December 31, 2023

Value Carrying

1 unchanged sentence

Financial assets:

Preferred equity investment 3 $ 1,782 $ 1,805 $ 1,805 $ 1,782 $ 1,801 $ 1,801

Preferred equity investments 3 $ 10,782 $ 10,881 $ 10,881 $ 1,782 $ 1,801 $ 1,801

Financial liabilities:

2 unchanged sentences

The carrying values for these instruments approximate their fair values due to the short-term nature of these instruments.

Preferred equity investment:

The fair value of the preferred equity investment was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements.

The Company utilized a discount rate of 15 % in its fair value calculation.

Preferred equity investments:

The fair value of the preferred equity investments was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements.

The Company utilized discount rates of 11 % to 15 % in its fair value calculation.

As such, the Company classifies these instruments as Level 3.

3 unchanged sentences

The fair values approximate their carrying values as the interest rates are variable and approximate prevailing market interest rates and spreads for similar debt arrangements.

The following table summarizes the balance of the Company’s indebtedness as of March 31, 2024 and December 31, 2023 (dollars in thousands):

March 31, 2024 December 31, 2023

Secured borrowing:

The fair value approximates the carrying value as the interest rates are variable and approximate prevailing market interest rates and spreads for similar debt arrangements.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

The following table summarizes the balance of the Company’s indebtedness as of June 30, 2024 and December 31, 2023 (dollars in thousands):

June 30, 2024 December 31, 2023

Principal Amount Deferred Loan Fees Carrying Amount Principal Amount Deferred Loan Fees Carrying Amount

2 unchanged sentences

Unsecured revolving credit facility (1)

Secured borrowing (2)

75,000 — 75,000 — — —

$ 675,000 $ ( 3,852 ) $ 671,148 $ 600,000 $ ( 4,402 ) $ 595,598

(1) Deferred financing fees are included in deferred financing costs, net on the balance sheet, and not reflected as a reduction to the unsecured revolving credit facility.

(2) See Note 5, Other Real Estate Related and Other Investments , for more information on the secured borrowing.

Senior Unsecured Notes Payable

7 unchanged sentences

The Notes accrue interest at a rate of 3.875 % per annum payable semiannually in arrears on June 30 and December 30 of each year, commencing on December 30, 2021.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

The Issuers may redeem some or all of the Notes at any time prior to March 30, 2028 at a price equal to 100 % of the principal amount of the Notes redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date, plus a “make-whole” premium.

At any time on or after March 30, 2028, the Issuers may redeem some or all of the Notes at a redemption price equal to 100 % of the principal amount of the Notes redeemed plus accrued interest on the Notes, if any, to, but not including, the redemption date.

In addition, at any time on or prior to June 30, 2024, up to 40 % of the aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings at a redemption price of 103.875 % of the aggregate principal amount of Notes to be redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date.

If certain changes of control of the Company occur, the Issuers will be required to make an offer to holders of the Notes to repurchase their Notes at a price of 101 % of their principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date.

12 unchanged sentences

The indenture governing the Notes also contains customary events of default.

As of March 31, 2024, the Company was in compliance with all applicable financial covenants under the indenture governing the Notes.

As of June 30, 2024, the Company was in compliance with all applicable financial covenants under the indenture governing the Notes.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Unsecured Revolving Credit Facility and Term Loan

6 unchanged sentences

The interest rates applicable to loans under the Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10 % to 0.55 % per annum or Adjusted Term SOFR or Adjusted Daily Simple SOFR (each as defined in the Second Amended Credit Agreement) plus a margin ranging from 1.10 % to 1.55 % per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt).

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

a margin ranging from 1.50 % to 2.20 % per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt).

The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50 % to 1.20 % per annum or Adjusted Term SOFR or Adjusted Daily Simple SOFR plus a margin ranging from 1.50 % to 2.20 % per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt).

In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Revolving Facility ranging from 0.15 % to 0.35 % per annum, based on the debt to asset value ratio of the Company and its consolidated subsidiaries (unless the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt and the Operating Partnership elects to decrease the applicable margin as described above, in which case the Operating Partnership will pay a facility fee on the revolving commitments ranging from 0.125 % to 0.30 % per annum based on the credit ratings of the Company’s senior long-term unsecured debt).

As of March 31, 2024, the Operating Partnership had $ 200.0 million of borrowings outstanding under the Term Loan and no borrowings outstanding under the Revolving Facility.

As of June 30, 2024, the Operating Partnership had $ 200.0 million of borrowings outstanding under the Term Loan and no borrowings outstanding under the Revolving Facility.

The Revolving Facility has a maturity date of February 9, 2027, and includes, at the sole discretion of the Operating Partnership, two six-month extension options.

4 unchanged sentences

The Second Amended Credit Agreement also contains certain customary events of default, including the failure to make timely payments under the Second Amended Credit Facility or other material indebtedness, the failure to satisfy certain covenants (including the financial maintenance covenants), the occurrence of change of control and specified events of bankruptcy and insolvency.

As of March 31, 2024, the Company was in compliance with all applicable financial covenants under the Second Amended Credit Agreement.

At-The-Market Offering —On September 15, 2023, the Company entered into a new equity distribution agreement to issue and sell, from time to time, up to $ 500.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “New ATM Program”) and terminated its previous $ 500.0 million “at-the-market” equity offering program (the “Previous ATM Program” and together with the New ATM Program, the “ATM Program”).

In addition to the issuance and sale of shares of its common stock, the ATM Program also provides for the ability to enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of the Company’s shares of common stock under the ATM Program.

As of June 30, 2024, the Company was in compliance with all applicable financial covenants under the Second Amended Credit Agreement.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Secured Borrowing

On June 3, 2024, KeyBank National Association purchased a $ 75.0 million undivided participation interest in a $ 165.0 million mortgage loan from the Company (see Note 5, Other Real Estate Related and Other Investments , for additional information), which bears interest at a rate of SOFR, with a term SOFR floor of 3.00 %, plus 2.5 % or 2.25 %, depending on the debt yield of the loan, and payable monthly.

As the transaction did not qualify as a sale in accordance with GAAP, the Company recorded the participation interest as a secured borrowing in the amount of $ 75.0 million in the condensed consolidated balance sheet.

The participating interest may be prepaid in whole before the maturity date for an exit fee of up to 0.50 % of the loan plus unpaid interest .

The participation interest provides for a put option, subject to certain restrictions, and a call option for the then-outstanding loan amount plus accrued and unpaid interest.

As of June 30, 2024, the interest rate in effect for the secured borrowing was 7.83 %.

On July 30, 2024, the Company exercised the call option on the $ 75.0 million secured borrowing.

See Note 14, Subsequent Events , for additional information.

At-The-Market Offering —On May 6, 2024, the Company entered into a new equity distribution agreement to issue and sell, from time to time, up to $ 500.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “New ATM Program”) and terminated its previous $ 500.0 million “at-the-market” equity offering program (the “Previous ATM Program” and together with the New ATM Program, the “ATM Program”).

In the event the Company enters into an ATM forward contract to sell shares of common stock pursuant to the ATM Program, the Company would expect to fully physically settle forward equity sales by delivery of shares of common stock to the forward purchaser and receive cash proceeds upon one or more settlement dates, which are typically a one-year term, at the Company’s discretion, prior to the final settlement date, at which time the Company would expect to receive aggregate net cash proceeds at settlement equal to the number of shares sold on a forward basis multiplied by the relevant forward price per share.

The weighted average forward sale price that the Company would expect to receive upon physical settlement would be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends through the settlement.

There were no outstanding ATM forward contracts that had not settled as of March 31, 2024.

There was no ATM Program activity (or activity under any predecessor at-the-market equity offering programs) for the three months ended March 31, 2023.

The following table summarizes the ATM Program activity for the three months ended March 31, 2024 (in thousands, except per share amounts):

For the Three Months Ended

March 31, 2024

The following table summarizes the ATM Program activity for the three and six months ended June 30, 2024 (in thousands, except per share amounts):

For the Three Months Ended For the Six Months Ended

June 30, 2024

Number of shares 12,145 23,745

1 unchanged sentence

Gross proceeds (1)

(1) Total gross proceeds is before $ 3.4 million of commissions paid to the sales agents during the three months ended March 31, 2024, under the ATM Program.

As of March 31, 2024, the Company had $ 0.9 million available for future issuances under the New ATM Program.

Dividends on Common Stock — The following table summarizes the cash dividends per share of common stock declared by the Company’s board of directors for the first three months of 2024 (dollars in thousands, except per share amounts):

$ 306,534 $ 579,767

(1) Total gross proceeds is before $ 3.8 million and $ 7.2 million of commissions paid to the sales agents during the three and six months ended June 30, 2024, respectively, under the ATM Program.

During the three and six months ended June 30, 2023, the Company executed forward equity sales under the ATM Program with a financial institution acting as a forward purchaser to sell 6,736,089 shares of common stock at a weighted average sales price of $ 19.71 per share before commissions and offering expenses.

The Company did not receive any proceeds from the sales of its shares of common stock by the forward sellers.

As of June 30, 2023, the Company had not settled any portion of these forward equity sales.

No forward equity sales were executed or settled under the ATM Program during the three and six months ended June 30, 2024, and there were no outstanding ATM forward contracts that had not settled as of June 30, 2024.

As of June 30, 2024, the Company had $ 193.5 million available for future issuances under the New ATM Program.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Dividends on Common Stock — The following table summarizes the cash dividends per share of common stock declared by the Company’s board of directors for the first six months of 2024 (dollars in thousands, except per share amounts):

For the Three Months Ended

March 31, 2024

March 31, 2024 June 30, 2024

Dividends declared per share $ 0.29 $ 0.29

Dividends payment date April 15, 2024

Dividends payment date April 15, 2024 July 15, 2024

Dividends payable as of record date $ 41,192 $ 44,721

Dividends record date March 28, 2024

Dividends record date March 28, 2024 June 28, 2024

STOCK-BASED COMPENSATION

4 unchanged sentences

Under the Plan, 5,000,000 shares have been authorized for awards.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Under the Plan, restricted stock awards (“RSAs”) vest in equal annual installments over a three year period for the RSAs granted after 2020 and a four year period for the RSAs granted in 2020.

6 unchanged sentences

The vesting of certain awards may accelerate, as defined in the grant agreement, upon retirement, a change in control or other events.

The following table summarizes the status of the restricted stock award and performance award activity for the three months ended March 31, 2024:

The following table summarizes the status of the restricted stock award and performance award activity for the six months ended June 30, 2024:

Shares Weighted Average Share Price

Unvested balance at December 31, 2023 510,596 $ 21.01

Board Awards 21,712 23.95

Vested ( 169,811 ) 20.67

Forfeited ( 35,161 ) 20.48

Unvested balance at March 31, 2024 330,392 $ 21.12

As of March 31, 2024, the weighted-average remaining vesting period of such awards w as 1.9 years.

Unvested balance at June 30, 2024 327,336 $ 21.43

As of June 30, 2024, the weighted-average remaining vesting period of such awards w as 1.7 years.

The following table summarizes the stock-based compensation expense recognized for the periods presented (dollars in thousands):

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2024 2023 2024 2023

Stock-based compensation expense $ 1,406 $ 924 $ 3,526 $ 1,860

For the three months ended March 31, 2023, approximately $ 0.9 million of previously recognized stock-based compensation expense was reversed due to forfeitures of stock awards.

As of March 31, 2024, there was $ 7.9 million of unamortized stock-based compensation expense related to the unvested RSAs and TSR Units.

For the three and six months ended June 30, 2023, approximately $ 0.6 million of previously recognized stock-based compensation expense related to the PSAs was reversed as the awards were not expected to meet the performance

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

EARNINGS PER COMMON SHARE

The following table presents the calculation of basic and diluted earnings per common share attributable to CareTrust REIT, Inc.

(“EPS”) for the Company’s common stock for the three months ended March 31, 2024 and 2023, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS (amounts in thousands, except per share amounts):

For the Three Months Ended March 31,

Net income attributable to CareTrust REIT, Inc.

For the six months ended June 30, 2023, approximately $ 0.9 million of previously recognized stock-based compensation expense was reversed due to forfeitures of stock awards.

As of June 30, 2024, there was $ 7.4 million of unamortized stock-based compensation expense related to the unvested RSAs and TSR Units.

EARNINGS (LOSS) PER COMMON SHARE

The following table presents the calculation of basic and diluted earnings (loss) per common share attributable to CareTrust REIT, Inc.

(“EPS”) for the Company’s common stock for the three and six months ended June 30, 2024 and 2023, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS (amounts in thousands, except per share amounts):

For the Three Months Ended June 30, For the Six Months Ended June 30,

2024 2023 2024 2023

Net income (loss) attributable to CareTrust REIT, Inc.

$ 10,758 $ ( 484 ) $ 39,504 $ 18,743

Net income allocated to participating securities ( 95 ) ( 89 ) ( 191 ) ( 178 )

2 unchanged sentences

Dilutive potential common shares - TSR Units 363 — 364 90

Dilutive potential common shares - forward equity agreements — — — 14

Weighted-average diluted common shares outstanding 145,258 99,117 139,230 99,194

Earnings per common share attributable to CareTrust REIT, Inc., basic $ 0.22 $ 0.19

Earnings per common share attributable to CareTrust REIT, Inc., diluted $ 0.22 $ 0.19

Earnings (loss) per common share attributable to CareTrust REIT, Inc., basic $ 0.07 $ ( 0.01 ) $ 0.28 $ 0.19

Earnings (loss) per common share attributable to CareTrust REIT, Inc., diluted $ 0.07 $ ( 0.01 ) $ 0.28 $ 0.19

Antidilutive unvested RSAs, TSR Units and PSAs excluded from the computation (1)

(1) For the three months ended March 31, 2024, RSAs are antidilutive.

For the three months ended March 31, 2023, certain TSR Units and RSAs are antidilutive.

327 500 327 316

(1) For the three and six months ended June 30, 2024, RSAs are antidilutive.

For the three months ended June 30, 2023, RSAs and TSR Units are antidilutive.

For the six months ended June 30, 2023, certain TSR Units and RSAs are antidilutive.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

VARIABLE INTEREST ENTITIES

3 unchanged sentences

The JV partner contributes the remaining 2.5 % of the JV’s total investment amount in exchange for a 50 % common ownership interest in the JV.

As of March 31, 2024, the Company held three SNFs and one ALF in multiple VIEs.

As of June 30, 2024, the Company held three SNFs, two multi-service campuses and one ALF in multiple VIEs.

On January 3, 2024, the Company entered into a JV, pursuant to which the Company contributed $ 10.8 million into the JV that purchased one ALF located in California for $ 11.0 million.

The JV partner contributed the remaining $ 0.2 million of the total investment.

On April 1, 2024, the Company entered into a JV, pursuant to which the Company contributed $ 28.1 million into the JV that purchased two multi-service campuses located in California for $ 28.8 million.

The JV partner contributed the remaining $ 0.7 million of the total investment.

Total assets and total liabilities include VIE assets and liabilities as follows (dollars in thousands):

March 31, 2024 December 31, 2023

June 30, 2024

December 31, 2023

Real estate investments, net $ 106,439 $ 68,106

Cash and cash equivalents 1,013 —

Accounts and other receivables 246 —

Prepaid and other assets — 2,800

2 unchanged sentences

Total liabilities $ 6,775 $ 7,239

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

COMMITMENTS AND CONTINGENCIES

6 unchanged sentences

The Company’s Tenant Code of Conduct and Corporate Responsibility policy (the “Tenant ESG Program”) provides eligible triple-net tenants of the Company with monetary inducements to make sustainable improvements to the Company’s properties.

Incentive options include a wide variety of opportunities for tenants to upgrade everything from energy and environmental systems to water-saving landscaping and more.

Incentive options include a wide variety of opportunities for tenants to

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

upgrade everything from energy and environmental systems to water-saving landscaping and more.

The Company’s board of directors has authorized annual allocations of up to $ 500,000 to fund the Tenant ESG Program.

The table below summarizes the Company’s existing, known commitments and contingencies as of March 31, 2024 (in thousands):

The table below summarizes the Company’s existing, known commitments and contingencies as of June 30, 2024 (in thousands):

Remaining Commitment

1 unchanged sentence

Mortgage loans (2)

(1) As of March 31, 2024, the Company had committed to fund expansions, construction, capital improvements and ESG incentives at certain triple-net leased facilities totaling $ 13.1 million, of which $ 4.9 million is subject to rent increase at the time of funding.

Other loans receivable (3)

(1) As of June 30, 2024, the Company had committed to fund expansions, construction, capital improvements and ESG incentives at certain triple-net leased facilities totaling $ 14.3 million, of which $ 6.5 million is subject to rent increase at the time of funding.

(2) One mortgage loan includes an earnout advance upon satisfaction of certain conditions.

(3) Represents working capital loan commitments.

CONCENTRATION OF RISK

Concentrations of credit risk arise when one or more tenants, operators, or obligors related to the Company’s investments are engaged in similar business activities or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Major operator concentration - The Company has operators from which it derived 10% or more of its revenue for the three months ended March 31, 2024 and 2023.

The following table sets forth information regarding the Company’s major operators as of March 31, 2024 and 2023:

Major operator concentration – The Company has operators from which it derived 10% or more of its revenue for the three and six months ended June 30, 2024 and 2023.

The following table sets forth information regarding the Company’s major operators as of June 30, 2024 and 2023:

Number of Facilities Number of Beds/Units Percentage of Total Revenue

Operator SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended

March 31, 2024 (1)

Operator SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended Six Months Ended

June 30, 2024 (1)

87 8 7 9,290 997 661 29 % 29 %

Priority Management Group 13 2 — 1,742 402 — 13 % 13 %

March 31, 2023 (2)

June 30, 2023 (2)

83 8 7 8,741 997 661 36 % 36 %

5 unchanged sentences

The Company has not verified this information through an independent investigation or otherwise.

Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which the Company derived 10% or more of its revenue for the three months ended March 31, 2024 and 2023:

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Number of Facilities Number of Beds/Units Percentage of Total Revenue

State SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended

March 31, 2024 (1)

State SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended Six Months Ended

June 30, 2024 (1)

CA 42 12 9 5,000 2,008 734 30 % 30 %

TX 41 4 2 5,193 630 212 20 % 20 %

March 31, 2023 (2)

June 30, 2023 (2)

CA 29 9 5 3,307 1,527 437 28 % 28 %

5 unchanged sentences

The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued.

CARETRUST REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —

Recent Acquisitions and Investment

On April 1, 2024, the Company contributed $ 28.0 million to a JV that purchased two multi-service campuses located in California for $ 28.8 million.

In exchange, the Company holds 100 % of the preferred equity interests in the JV and 50 % of the common equity interest in the JV.

The JV partner contributed the remaining $ 0.8 million of the total investment in exchange for 50 % of the common equity interest in the JV.

In connection with the acquisition of the facilities, the Company entered into a new master lease with affiliates of Bayshire, LLC (“Bayshire”).

The new lease has an initial term of approximately 15 years, with two five-year renewal options.

Initial annual cash rent under the lease is approximately $ 2.7 million, increasing to approximately $ 2.9 million in the second year and $ 3.1 million in the third year, with 2 % fixed annual escalators thereafter.

The master lease provides for deferred rent in the first year of approximately $ 0.8 million.

On April 1, 2024, the Company acquired one multi-service campus located in California for approximately $ 32.3 million, which includes estimated capitalized acquisition costs.

In connection with the acquisition of the facility, the Company amended an existing master lease with affiliates of Bayshire.

The Bayshire lease, as amended, has a remaining initial term of approximately 10 years, with two five-year renewal options.

Annual cash rent under the amended lease increased by approximately $ 2.6 million, increasing to approximately $ 3.0 million in the second year with CPI-based annual escalators thereafter.

On May 1, 2024, the Company extended a $ 26.7 million mortgage loan to a skilled nursing real estate owner.

The mortgage loan is secured by two SNFs and bears interest at a rate of 9.1 %, payable monthly.

The mortgage loan is set to mature on May 1, 2031 and includes a one year extension option.

The mortgage loan may (subject to certain limited exceptions) not be prepaid prior to July 31, 2029.

Recent Investments

On August 1, 2024, the Company extended a $ 260.0 million mortgage loan to a skilled nursing real estate owner.

The loan is secured by a first priority mortgage lien on a real estate portfolio of 37 SNFs, ALFs and multi-service campuses located in various states and bears interest at a fixed rate of 8.40 %, payable monthly.

The mortgage loan is set to mature on August 1, 2029 and has a 24-month lockout period on prepayment subject to certain exceptions.

The mortgage loan may otherwise be prepaid in part or in whole after the 24-month lockout period with agreed upon exit fees, as applicable.

In addition, on August 1, 2024, the Company funded a $ 43.0 million preferred equity investment in an uptier holding company of the 37 -property skilled nursing and assisted living portfolio.

The Company's initial contractual yield on its preferred equity investment is 11 %.

Secured Borrowing

On July 30, 2024, the Company exercised the call option on the $ 75.0 million secured borrowing at a call purchase price equal to the principal amount plus accrued and unpaid interest and a prepayment penalty of $ 0.4 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements