CareTrust REIT, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking Statements Certain statements in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including, but not limited to, statements regarding: future financing plans, business strategies, growth prospects and operating and financial performance; expectations regarding the making of distributions and the payment of dividends; and compliance with and changes in governmental regulations. Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These 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 we believe that the assumptions underlying the forward-looking statements are reasonable, 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 our expectations include, but are not limited to: (i) the ability of our tenants, managers, and borrowers to successfully operate our properties and to meet and/or perform their obligations under the agreements we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the impact of unstable market and economic conditions; (iii) the impact of healthcare reform legislation, including reimbursement rates and potential minimum staffing level requirements, on the operating results and financial conditions of our tenants, managers, and borrowers; (iv) the consequences of bankruptcy, insolvency or financial deterioration of our tenants, managers and borrowers; (v) the ability and willingness of our tenants, managers and borrowers to renew their agreements with us, and our 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 or manager; (vi) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (vii) the impact of public health crises; (viii) the availability of and the ability to identify (a) tenants and managers who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants and managers on favorable terms; (ix) the intended benefits of our acquisition of Care REIT plc (“Care REIT”) may not be realized, and the additional risks we will be subject to from our investment in Care REIT and any other international investments; (x) the additional operational and legal risks associated with our properties managed in a RIDEA (as defined below) structure; (xi) the impact of the unfavorable resolution of litigation or disputes and rising liability and insurance costs as a result thereof or other market factors; (xii) the ability to retain our key management personnel; (xiii) the ability to maintain our status as a real estate investment trust (“REIT”); (xiv) changes in the United States (“U.S.”) and United Kingdom (“U.K.”) tax law and other state, federal or local laws, whether or not specific to REITs; (xv) the ability to generate sufficient cash flows to service our outstanding indebtedness; (xvi) access to debt and equity capital markets; (xvii) fluctuating interest and currency rates; and (xviii) any additional factors included under Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the date of this report. Except in the normal course of our public disclosure obligations, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any statement is based. Overview CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, senior housing and other healthcare-related properties. We operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held through CTR Partnership, L.P. (the “Operating Partnership”). The Operating Partnership is managed by CareTrust REIT’s wholly-owned subsidiary, CareTrust GP, LLC, which is the sole general partner of the Operating Partnership. As of March 31, 2026, we owned, directly or indirectly in consolidated joint ventures, and leased to independent operators, 417 skilled nursing facilities (each, a “SNF”), senior housing communities and other properties consisting of 38,512 operational beds and units located in 32 states and the United Kingdom with the highest concentration of properties by rental income located in California, the U.K., Texas, and Tennessee. As of March 31, 2026, we also had other real estate related investments consisting of four preferred equity investments, 17 real estate secured loans receivable and five mezzanine loans receivable with a carrying value of $931.5 million and one financing receivable with a carrying value of $92.5 million. 31 Table of Contents During the fourth quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008 in connection with the establishment of a senior housing operating portfolio (“SHOP”) and completed our first SHOP acquisition in December 2025. As of March 31, 2026, CareTrust REIT also owned, indirectly in consolidated joint ventures, the properties and operations of three senior housing communities consisting of 270 units in Texas that are operated on our behalf by independent managers pursuant to the terms of separate management agreements under our SHOP platform. Recent Developments Market Trends and Uncertainties Recent macroeconomic conditions, particularly market uncertainty, immigration restrictions and changes to immigration enforcement policy, changes to the U.S. healthcare system, shutdown of the federal government, inflation (including higher supply costs and shortages), effects of global tariffs, elevated interest rates and related changes to consumer spending, have adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us. Higher interest rates and market volatility have also increased our costs of capital to finance acquisitions and increased our borrowing costs. We continue to monitor changes in the interest rate environment and the effect of changing rates on our business. In addition, current macroeconomic conditions and the resulting market volatility may adversely impact our ability to sell properties on acceptable terms, if at all, which could result in additional impairment charges. As a result of impacts experienced by our operators due to recent market trends and uncertainties, the ability of some of our tenants and borrowers to meet their financial obligations to us in full may be negatively impacted. From time to time in the past, we have taken actions to reposition one or more properties with a replacement tenant or sell the property and, in certain cases, we have also restructured tenants’ long-term obligations. During the three months ended March 31, 2026, we collected approximately 100% of contractual rents and interest due from our operators and borrowers. In the event our tenants or borrowers are unable to satisfy their obligations to us and we are unable to effect these actions on terms that are as favorable to us as those currently in place, our rental and interest income would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges or fair value adjustments. Regulatory Updates The Centers for Medicare and Medicaid Services (“CMS”) issued a final rule on July 31, 2025, updating Medicare payment policies and rates for SNFs for fiscal year 2026. This update provides for a net increase of 3.2% in Medicare Part A payments to SNFs. This increase is expected to partially offset some of our tenants’ and borrowers’ higher operating costs. In April 2026, CMS proposed a payment rate update to SNF reimbursements for fiscal 2027, which includes a net increase of 2.4% in Medicare Part A payments to SNFs. This increase, if finalized, is expected to partially offset some of our tenants’ and borrowers’ higher operating costs. In connection with the fiscal year 2027 proposed rule, CMS issued a Request for Information (“RFI”) seeking input on methodologies to quantify and address potential "case-mix creep" under the Patient-Driven Payment Model (“PDPM”). While the RFI does not propose specific rate changes, it indicates CMS may pursue future recalibrations to PDPM that could reduce per-beneficiary Medicare payments to SNFs in fiscal years beyond fiscal year 2027. Comments are due June 1, 2026. In the same proposed rule, CMS proposed updates to the SNF Quality Reporting Program, including the removal of two COVID-19 vaccination measures, shorter data submission deadlines, and, beginning with the fiscal year 2031 program year, a requirement that SNFs submit Minimum Data Set assessments for all residents receiving skilled care regardless of payer (estimated by CMS to increase aggregate SNF compliance costs by approximately $88 million annually). If adopted, these expanded obligations would broaden the conduct that triggers the existing 2-percentage-point reduction to a SNF’s annual market basket update for noncompliance, which could adversely affect our tenants’ and borrowers’ financial condition and ability to meet their obligations to us. In April 2026, CMS issued revised guidance updating Chapters 5 and 7 of the State Operations Manual, including updates to survey procedures and revisit protocols, strengthened Civil Money Penalty enforcement (with per-instance and per-day fines and public posting of certain penalties on Nursing Home Care Compare beginning June 24, 2026), and refined Immediate Jeopardy definitions. Non-compliance could harm operators’ reputations and ability to attract patients. In addition, increased compliance burdens or enforcement actions against our tenants or borrowers could adversely affect their financial condition and, in turn, their ability to meet their obligations to us. California Senate Bill No. 525 (“SB 525”), signed into law on October 13, 2023 and effective October 16, 2024, requires substantial minimum wage increases for workers at certain health care facilities (including licensed SNFs) operating in 32 Table of Contents California. The current $21 per hour minimum wage for covered health care employees, in effect since June 1, 2024, is scheduled to increase to $22 or $23 per hour (depending on property type) on June 1, 2026, with a further increase to $25 per hour on June 1, 2028. The upcoming June 2026 step-up may further pressure operating costs for our California-based tenants and borrowers, which could adversely affect their financial condition and ability to meet their obligations to us. Recent Investments The following table summarizes our acquisitions from January 1, 2026 through March 31, 2026 (dollars in thousands): Type of Property Purchase Price (1) Initial Annual Cash Rent (2) Number of Properties Number of Beds/Units (3) Skilled nursing triple-net $ 141,205 $ 12,750 6 532 Senior housing triple-net 70,724 6,193 4 358 Total $ 211,929 $ 18,943 10 890 (1) Purchase price includes capitalized acquisition costs. (2) Initial annual cash rent represents initial cash rent for the first 12 months. (3) The number of beds/units includes operating beds/units at acquisition date. The following table summarizes our other real estate related investments from January 1, 2026 through March 31, 2026 (dollars in thousands): Investment Type Investment (1) Interest Rate Number of Properties (2) Maturity Date Mortgage secured loans receivable $ 30,549 8.7 % 1 1/19/2027 - 5/31/2035 Total $ 30,549 8.7 % 1 (1) Loans originated in British Pound are converted at the spot rate on date of investment. (2) Includes an additional funding on an existing mortgage secured loan receivable. At-The-Market Offering of Common Stock On February 17, 2026, we entered into a new equity distribution agreement to issue and sell, from time to time, up to $1.0 billion in aggregate offering price of our common stock through an “at-the-market” equity offering program (the “New ATM Program”) and terminated our previous $750.0 million “at-the-market” equity offering program (together, with all previous at-the-market equity offering programs, the “Previous ATM Programs” 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 shares of our common stock under the ATM Program. We expect to fully physically settle ATM forward contracts entered into under the ATM program by delivery of shares of common stock to the forward purchaser and receipt of 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 we 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 we 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. As of March 31, 2026, 9.5 million shares remained unsettled under forward contracts, representing approximately $363.6 million in gross proceeds. The following table summarizes the ATM Program activity for the three months ended March 31, 2026 and 2025 (in thousands, except per share amounts): Three Months Ended March 31, 2026 2025 Number of shares 3,500 553 Average sales price per share $ 37.00 $ 28.87 Gross proceeds (1) $ 129,500 $ 15,964 (1) Total gross proceeds is before $1.0 million and $0.2 million of commissions paid to sales agents and forward adjustments during the three months ended March 31, 2026 and 2025, respectively, under the ATM Program. As of March 31, 2026, we had $879.0 million available for future issuances under the New ATM Program. 33 Table of Contents Financing Activity Subsequent to March 31, 2026, we borrowed $350.0 million net on the Third Amended Revolving Facility (as defined below) to fund recent acquisitions. In addition, we settled outstanding forward contracts under the ATM Program for 9.5 million shares and gross proceeds of approximately $363.6 million. Results of Operations Three Months Ended March 31, 2026 Compared to Three Months Ended December 31, 2025: Three Months Ended Increase (Decrease) Percentage Difference (in thousands) March 31, 2026 December 31, 2025 Revenues: Rental income $ 114,196 $ 106,250 $ 7,946 7 % Resident fees and services 3,852 1,225 2,627 * Interest income from financing receivable 2,778 2,891 (113) (4) % Interest income from other real estate related investments and other income 21,957 24,493 (2,536) (10) % Expenses: Depreciation and amortization 29,430 27,142 2,288 8 % Interest expense 11,242 11,378 (136) (1) % Property taxes and insurance 2,453 2,260 193 9 % Senior housing operating expenses 3,106 952 2,154 * Impairment of real estate investments — 2,031 (2,031) (100) % Transaction costs 207 3,820 (3,613) (95) % Property operating expenses (recoveries) 296 (1,460) 1,756 * General and administrative 14,337 15,473 (1,136) (7) % Other income (loss): Other income, net — 4,350 (4,350) (100) % Gain on sale of real estate, net — 27,672 (27,672) (100) % Unrealized gain on other real estate related investments, net 7 8,973 (8,966) (100) % Gain (loss) on foreign currency transactions 57 (103) 160 * Income taxes Income tax expense (2,271) (1,894) (377) 20 % Net income Net (loss) income attributable to noncontrolling interests (705) 971 (1,676) * * Not meaningful Rental income . Rental income increased by approximately $7.9 million as detailed below: Three Months Ended Increase (Decrease) (in thousands) March 31, 2026 December 31, 2025 Contractual cash rent $ 107,956 $ 100,277 $ 7,679 Tenant reimbursements 2,447 2,360 87 Total contractual rent 110,403 102,637 7,766 Straight-line rent 3,843 3,581 262 Amortization of lease incentives (49) (48) (1) Amortization of above and below market leases (1) 80 (81) Total amount in rental income $ 114,196 $ 106,250 $ 7,946 Total contractual rent includes initial contractual 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 34 Table of Contents cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Total contractual rent increased by $7.8 million due to a $7.1 million increase in rental income from real estate investments made after September 30, 2025, a $1.1 million increase in rental rates for our existing tenants, an increase of $0.2 million related to recoveries, and an increase of $0.1 million in tenant reimbursements partially offset by a $0.7 million decrease in rental income related to dispositions. Straight-line rent increased by $0.3 million related to real estate investments. Resident fees and services. The $2.6 million increase in resident fees and services was due to the acquisition of three senior housing communities under the SHOP platform in December 2025. Interest income from financing receivable. Interest income from financing receivable did not change significantly during the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025. Interest income from other real estate related investments and other income. The $2.5 million, or 10%, decrease in interest income from other real estate related investments and other income was primarily due to a decrease of $3.0 million of interest earned on money market funds, a decrease of $0.8 million related to loan payments, a decrease of $0.3 million related to the number of days in the quarter compared to the prior quarter and a decrease of $0.1 million due to origination fees received in the prior quarter, partially offset by $1.7 million of interest income on new investments made after September 30, 2025. Depreciation and amortization. The $2.3 million, or 8%, increase in depreciation and amortization was primarily due to an increase of $3.0 million due to acquisitions and capital improvements made after September 30, 2025, partially offset by a decrease of $0.3 million related to dispositions, a decrease of $0.3 million due to reclassifying assets as held for investment in the quarter ended December 31, 2025 and a decrease of $0.1 million related to assets becoming fully depreciated after September 30, 2025. Interest expense. Interest expense did not change significantly during the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025. Property taxes and insurance. The $0.2 million, or 9%, increase in property taxes and insurance was primarily due to an increase of $0.1 million due to acquisitions made after September 30, 2025 and an increase of $0.1 million due to reassessments. Senior housing operating expenses. The $2.2 million increase in senior housing operating expenses was due to the acquisition of three senior housing communities under the SHOP platform in December 2025. Impairment of real estate investments. During the three months ended March 31, 2026, we did not recognize any impairment charges. During the three months ended December 31, 2025, we recognized impairment charges of $2.0 million related to one property that was sold during the period. Transaction costs. Transaction costs for the three months ended March 31, 2026 and December 31, 2025 are primarily related to integrating the operations of the Care REIT acquisition in the U.K. in 2025. Property operating expenses (recoveries). During the three months ended March 31, 2026, we recognized $0.3 million of property operating expenses related to assets we sold or transitioned to new operators. During the three months ended December 31, 2025, we recognized $1.5 million in recoveries related to assets we have sold. General and administrative. General and administrative expense decreased by $1.1 million as detailed below: Three Months Ended Increase (Decrease) (in thousands) March 31, 2026 December 31, 2025 Incentive compensation $ 4,084 $ 6,772 $ (2,688) Cash compensation 3,579 2,926 653 Share-based compensation 3,448 2,468 980 Professional services 1,528 1,175 353 Other administrative expense 786 845 (59) Taxes and insurance 233 722 (489) Other expenses 679 565 114 General and administrative expense $ 14,337 $ 15,473 $ (1,136) Other income, net. During the three months ended March 31, 2026, we did not record any other income. During the three months ended December 31, 2025, we recorded other income of $5.0 million related to a fee received in connection with the release of a property from a purchase agreement, partially offset by $0.6 million in fees paid in connection with the transaction. 35 Table of Contents Gain on sale of real estate, net. During the three months ended March 31, 2026, we did not record any gain on the sale of real estate. During the three months ended December 31, 2025, we recorded a $27.7 million gain on the sale of real estate related to the sale of one skilled nursing facility and eight senior housing communities. Unrealized gain on other real estate related investments, net. During the three months ended March 31, 2026, we recorded $1.5 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.7 million, to bring the interest rates in line with market rates, and $0.8 million of unrealized foreign currency loss related to two mortgage loans receivable. During the three months ended December 31, 2025, we recorded an unrealized gain of $9.0 million on our secured and mezzanine loans receivable, to bring the interest rates in line with market rates. Gain (loss) on foreign currency transactions. During the three months ended March 31, 2026, we recorded a $0.1 million foreign currency gain related to our cash flow hedges. During the three months ended December 31, 2025, we recorded a $0.1 million loss related to our cash flow hedges. Income tax expense. During the three months ended March 31, 2026, we recorded $2.3 million of income tax expense primarily related to foreign withholding taxes related to taxable income in the U.K. During the three months ended December 31, 2025, we recorded $1.9 million of income tax expense primarily related to foreign withholding taxes related to taxable income in the U.K. Net (loss) income attributable to noncontrolling interests. Net loss attributable to noncontrolling interests increased during the three months ended March 31, 2026 primarily due to other income recognized in the three months ended December 31, 2025. 36 Table of Contents Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025: Three Months Ended Increase (Decrease) Percentage Difference (in thousands) March 31, 2026 March 31, 2025 Revenues: Rental income $ 114,196 $ 71,646 $ 42,550 59 % Resident fees and services 3,852 — 3,852 100 % Interest income from financing receivable 2,778 2,807 (29) (1) % Interest income from other real estate related investments and other income 21,957 22,168 (211) (1) % Expenses: Depreciation and amortization 29,430 17,841 11,589 65 % Interest expense 11,242 6,669 4,573 69 % Property taxes and insurance 2,453 2,065 388 19 % Senior housing operating expenses 3,106 — 3,106 100 % Transaction costs 207 888 (681) (77) % Property operating expenses 296 105 191 * General and administrative 14,337 9,023 5,314 59 % Other income: Gain on sale of real estate, net — 3,876 (3,876) (100) % Unrealized gain on other real estate related investments, net 7 1,287 (1,280) (99) % Gain on foreign currency transactions, net 57 — 57 100 % Income taxes Income tax expense (2,271) — (2,271) (100) % Net income Net loss attributable to noncontrolling interests (705) (609) (96) 16 % * Not meaningful Rental income . Rental income increased by $42.6 million as detailed below: Three Months Ended Increase (Decrease) (in thousands) March 31, 2026 March 31, 2025 Contractual cash rent $ 107,956 $ 68,500 $ 39,456 Tenant reimbursements 2,447 2,276 171 Total contractual rent 110,403 70,776 39,627 Straight-line rent 3,843 (7) 3,850 Amortization of lease incentives (49) (49) — Amortization of above and below market leases (1) 926 (927) Total amount in rental income $ 114,196 $ 71,646 $ 42,550 Total contractual rent includes initial contractual 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. Total contractual rent increased by $39.6 million due to a $35.7 million increase in rental income from real estate investments made after December 31, 2024, a $3.2 million increase in rental rates for our existing tenants, a $1.3 million increase in rental income related to transfers to new operators, and a $0.2 million increase in tenant reimbursements, partially offset by a $0.8 million decrease in rental income related to dispositions made after December 31, 2024. Straight-line rent increased by $3.9 million due to investments made after December 31, 2024. Amortization of above and below market leases decreased $0.9 million primarily due to lease terminations in August 2025, which accelerated the amortization of the applicable below market lease intangibles. Resident fees and services. The $3.9 million increase in resident fees and services was due to the acquisition of three senior housing communities under the SHOP platform in December 2025. 37 Table of Contents Interest income from financing receivable. Interest income from financing receivable did not change significantly during the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025. Interest income from other real estate related investments and other income. The $0.2 million decrease in interest and other income was primarily due to a $2.0 million decrease in interest income related to loan repayments made after December 31, 2024, a $1.6 million decrease from interest income earned on escrow deposits, a $0.9 million decrease from interest income on money market funds, and a $0.1 million decrease in interest income due to loan fee amortization, partially offset by a $4.2 million increase related to the origination of loans receivable after December 31, 2024, and a $0.2 million increase from the origination of other loans. Depreciation and amortization. The $11.6 million, or 65%, increase in depreciation and amortization was primarily due to an increase of $12.3 million related to acquisitions and capital improvements made after December 31, 2024 and an increase of $0.1 million related to reclassifying an asset as held for investment, partially offset by a decrease of $0.3 million due to the disposal of assets and a decrease of $0.5 million due to assets becoming fully depreciated or amortized. Interest expense. Interest expense increased by $4.6 million as detailed below: Change in interest expense for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 (in thousands) Increases to interest expense due to: Increase due to new Term Loan Facility $ 5,990 Total increases to interest expense 5,990 Decreases to interest expense due to: Decrease in outstanding borrowing amount for the Third Amended Revolving Facility (1,417) Total decreases to interest expense (1,417) Total change in interest expense $ 4,573 Property taxes and insurance. The $0.4 million, or 19%, increase in property taxes was due to a $0.8 million increase related to acquisitions made after December 31, 2024, partially offset by a decrease of $0.2 million due to properties that were sold after December 31, 2024, a decrease of $0.1 million due to reassessments, and a decrease of $0.1 million due to the transfer of certain properties to new operators that make direct tax payments. Senior housing operating expenses. The $3.1 million increase in senior housing operating expenses was due to the acquisition of three senior housing communities under the SHOP platform in December 2025. Transaction costs. During the three months ended March 31, 2026, we recognized $0.2 million of costs primarily related to integrating the operations of the Care REIT acquisition in the U.K. in 2025. During the three months ended March 31, 2025, we recognized $0.9 million of unsuccessful acquisition pursuit costs that we classify as transaction costs. Property operating expenses. During the three months ended March 31, 2026, we recognized $0.3 million of property operating expenses related to assets we sold or transitioned to new operators. During the three months ended March 31, 2025, we recognized $0.5 million of property operating expenses related to assets we sold, repurposed, or re-tenanted, partially offset by $0.4 million in recoveries. General and administrative. General and administrative expense increased by $5.3 million as detailed below: Three Months Ended Increase/(Decrease) (in thousands) March 31, 2026 March 31, 2025 Incentive compensation $ 4,084 $ 1,225 $ 2,859 Cash compensation 3,579 2,090 1,489 Share-based compensation 3,448 3,909 (461) Professional services 1,528 876 652 Other administrative expense 786 287 499 Taxes and insurance 233 218 15 Other expenses 679 418 261 General and administrative expense $ 14,337 $ 9,023 $ 5,314 38 Table of Contents Gain on sale of real estate, net. During the three months ended March 31, 2026, we did not record any gain on sale of real estate. During the three months ended March 31, 2025, we recorded a $3.9 million gain on sale of real estate related to the sale of three skilled nursing facilities and one senior housing community. Unrealized gain on other real estate related investments, net. During the three months ended March 31, 2026, we recorded $1.5 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.7 million, to bring the interest rates in line with market rates, and an unrealized foreign currency loss of $0.8 million related to two mortgage loans receivable. During the three months ended March 31, 2025, we recorded $1.8 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.5 million, to bring the interest rates in line with market rates. Gain on foreign currency transactions, net. During the three months ended March 31, 2026, we recorded a $0.1 million foreign currency gain related to our cash flow hedges. During the three months ended March 31, 2025, we did not record any gain on foreign currency transactions. Income tax expense. During the three months ended March 31, 2026, we recorded $2.3 million of income tax expense primarily related to foreign withholding taxes related to taxable income in the U.K. We did not record income tax expense during the three months ended March 31, 2025. Net loss attributable to noncontrolling interests. The $0.1 million increase in net loss attributable to noncontrolling interests was primarily due to investments entered into subsequent to December 31, 2024. Liquidity and Capital Resources To qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, to our stockholders on an annual basis. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly dividends to common stockholders from cash flow from operating activities. All such dividends are at the discretion of our board of directors. Our short-term liquidity requirements consist primarily of operating and interest expenses directly associated with our properties, including: • interest expense and scheduled debt maturities on outstanding indebtedness; • general and administrative expenses; • dividend plans; • property operating expenses; • operating lease obligations; and • capital expenditures for improvements to our properties . Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions and other investments (including mortgage and mezzanine loan originations), capital expenditures, and scheduled debt maturities. We intend to invest in and/or develop additional healthcare and senior housing communities as suitable opportunities arise and so long as adequate sources of financing are available. We expect that future investments in and/or development of properties, including any improvements or renovations of current or newly-acquired properties, will depend on and will be financed by, in whole or in part, our existing cash, borrowings available to us un der the Third Amended Revolving Facility (as defined below), future borrowings or the proceeds from sales of shares of our common stock pursuant to our ATM Program or additional issuances of common stock or other securities. In addition, we may seek financing from U.S. government agencies, including through Fannie Mae and the U.S. Department of Housing and Urban Development, in appropriate circumstances in connection with acquisitions and refinancing of existing mortgage loans. We believe that our expected operating cash flow from rent collections, resident fees and services and interest payments on our other real estate related investments, together with our cash balance, available borrowing capacity under the Third Amended Revolving Facility and availability under the ATM Program will be sufficient to meet ongoing debt service requirements, dividend plans, property operating expenses, operating lease obligations, capital expenditures, working capital requirements, and other needs for at least the next 12 months. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements. While we may from time to time sell properties as part of our hold / investment strategy on an investment-by-investment basis, we currently do not expect to sell any of our properties to meet liquidity needs. Our quarterly cash dividend and any failure of our tenants to pay rent or of our borrowers to make interest or principal payments may impact our available capital resources. We have filed an automatic shelf registration statement with the SEC that expires in February 2029 and at or prior to such time we expect to file a new shelf registration statement. The shelf registration statement allows us or certain of our subsidiaries, as applicable, to offer and sell shares of common stock, preferred stock, warrants, rights, units and debt securities 39 Table of Contents through underwriters, dealers or agents or directly to purchasers, in one or more offerings on a continuous or delayed basis, in amounts, at prices and on terms we determine at the time of the offering. On February 17, 2026, we entered into the New ATM Program. In addition to the issuance and sale of shares of our common stock, we from time to time enter into one or more ATM forward contracts with sales agents for the sale of shares of our common stock under the ATM Program. See “At-The-Market Offering of Common Stock” above for information regarding activity under the ATM Program. Although we are subject to restrictions on our ability to incur indebtedness, we expect that we will be able to refinance existing indebtedness or incur additional indebtedness for acquisitions or other purposes, if needed. However, there can be no assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing common stock or other debt or equity securities, on terms that are acceptable to us or at all. As of March 31, 2026, we are in compliance with all debt covenants on our outstanding indebtedness. Cash Flows The following table presents selected data from our condensed consolidated statements of cash flows for the periods presented (dollars in thousands): For the Three Months Ended March 31, 2026 2025 Net cash provided by operating activities $ 90,365 $ 71,382 Net cash used in investing activities (105,249) (35,910) Net cash provided by financing activities 40,530 383,216 Effect of foreign currency translation (481) — Net increase in cash and cash equivalents 25,165 418,688 Cash and cash equivalents as of the beginning of period 198,042 213,822 Cash and cash equivalents as of the end of period $ 223,207 $ 632,510 Net cash provided by operating activities increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Operating cash inflows are derived primarily from the rental payments received under our lease agreements, resident fees and services, and interest income received on our other real estate related investments, including as a result of new investments. Operating cash outflows consist primarily of interest expense on our borrowings and general and administrative expenses. The net increase of $19.0 million in cash provided by operating activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is primarily due to an increase in rental income received, partially offset by an increase in cash paid for interest expense and general and administrative expense. Cash used in investing activities for the three months ended March 31, 2026 was primarily comprised of $102.4 million in acquisitions of real estate, investment in real estate related investments and escrow deposits for potential acquisitions of real estate, and $3.2 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $0.4 million in principal payments received from our other real estate related investments and other loans receivable. Cash used in investing activities for the three months ended March 31, 2025 was primarily comprised of $82.6 million in acquisitions of real estate, investment in real estate related investments and escrow deposits for potential acquisitions of real estate and $2.3 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $44.4 million in net proceeds from the sale of real estate and $4.6 million in principal payments received from our other real estate related investments and other loans receivable. Our cash flows provided by financing activities for the three months ended March 31, 2026 were primarily comprised of $127.9 million in net proceeds from the issuance of common stock, and $0.1 million in contributions from noncontrolling interests, partially offset by $74.8 million in dividends paid, a $10.5 million net settlement adjustment on restricted stock, and $2.2 million in distributions to noncontrolling interests. Our cash flows provided by financing activities for the three months ended March 31, 2025 were primarily comprised of $425.0 million in borrowings under our Third Amended Revolving Facility, $15.5 million in net proceeds from the issuance of common stock and $1.4 million in contributions from noncontrolling interests, partially offset by $54.4 million in dividends paid, a $3.3 million net settlement adjustment on restricted stock, $0.9 million in distributions to noncontrolling interests, and a $0.1 million payment of deferred financing costs. 40 Table of Contents Material Cash Requirements Our material cash requirements from known contractual and other obligations include: 3.875% Senior Unsecured Notes due 2028 On June 17, 2021, our operating subsidiary, CTR Partnership, L.P. (the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp. (together with the Operating Partnership, the “Issuers”), completed a private offering of $400.0 million aggregate principal amount of 3.875% Senior Notes due 2028 (the “Notes”). The Notes mature on June 30, 2028. 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. The obligations under the Notes are guaranteed, jointly and severally, on an unsecured basis, by us and all of our subsidiaries (other than the Issuers) that guarantee obligations under the Third Amended Credit Facility (as defined below). As of March 31, 2026, we were in compliance with all applicable financial covenants under the indenture governing the Notes. See Note 8, Debt, to our condensed consolidated financial statements included in this report for further information about the Notes. Unsecured Revolving Credit Facility and Term Loan On December 18, 2024, we, together with certain of our subsidiaries, entered into a third amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender, and the lenders party thereto (as amended from time to time, the “Third Amended Credit Agreement”). The Third Amended Credit Agreement, which amended and restated our prior credit agreement, provides for an unsecured revolving credit facility (the “Third Amended Revolving Facility”) with revolving commitments in an aggregate principal amount of $1.2 billion, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments. Future borrowings under the Third Amended Credit Facility (as defined below) will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes. The Third Amended Credit Agreement also provides that, subject to customary conditions, including obtaining lender commitments and pro forma compliance with financial maintenance covenants under the Third Amended Credit Agreement, the Operating Partnership may seek to increase the aggregate principal amount of the revolving commitments and/or establish one or more new tranches of term loans under the Third Amended Credit Facility in an aggregate amount not to exceed $800.0 million. On May 30, 2025, we entered into the First Amendment to the Third Amended Credit Agreement. The First Amendment to the Third Amended Credit Agreement provides for an unsecured term loan facility (the "Term Loan Facility" and together with the Third Amended Revolving Facility, the "Third Amended Credit Facility") with term loan commitments in an aggregate principal amount of $500.0 million in addition to the Third Amended Revolving Facility. On January 14, 2026, we entered into the Second Amendment to the Third Amended Credit Agreement. The Second Amendment to the Third Amended Credit Agreement amended the definition of Permitted Encumbrances to include liens on assets located in the U.K. or on equity interests of any person owning such assets, in each case, securing intercompany loans. As of March 31, 2026, we had $500.0 million of borrowings outstanding under the Term Loan Facility and no borrowings outstanding under the Third Amended Revolving Facility. Subsequent to March 31, 2026, we borrowed $350.0 million net under the Third Amended Revolving Facility to fund recent acquisitions. The Third Amended Revolving Facility has a maturity date of February 9, 2029, and includes, at our sole discretion, two six-month extension options. The Term Loan Facility has a maturity date of May 30, 2030. The interest rates applicable to loans under the Third Amended Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.05% to 0.55% per annum or Term SOFR or Daily Simple SOFR (each as defined in the Third Amended Credit Agreement) plus a margin ranging from 1.05% to 1.55% per annum based on the debt to asset value ratio of the Company and our consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if we obtain certain specified investment grade ratings on our senior long-term unsecured debt). In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Third Amended Credit Facility ranging from 0.15% to 0.35% per annum, based on the debt to asset value ratio of the Company and our consolidated subsidiaries (unless we obtain certain specified investment grade ratings on our 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 off the credit ratings of the Company’s senior long-term unsecured debt). The interest rates applicable to loans under the Term Loan Facility 41 Table of Contents are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.80% per annum or Term SOFR or Daily Simple SOFR (each as defined in the Third Amended Credit Agreement) plus a margin ranging from 1.10% to 1.80% per annum based on the debt to asset value ratio of the Company and our consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if we obtain certain specified investment grade ratings on our senior long-term unsecured debt). The First Amendment to the Third Amended Credit Agreement also removed the SOFR credit spread adjustment applicable to loans under the Third Amended Credit Facility bearing interest at Term SOFR or Daily Simple SOFR. As of March 31, 2026, we were in compliance with all applicable financial covenants under the Third Amended Credit Agreement. See Note 8, Debt, to our condensed consolidated financial statements included in this report for further information about the Third Amended Credit Agreement. Capital Expenditures As of March 31, 2026, we had committed to fund expansions, construction, capital improvements and environmental, social and governance incentives, which provides eligible triple-net tenants with monetary inducements to make sustainable improvements to our properties, at certain triple-net leased properties totaling $5.6 million, of which $4.1 million is subject to rent increase at the time of funding. We expect to fund the capital expenditures in the next one to two years. See Note 15, Commitments and Contingencies , to our condensed consolidated financial statements included in this report for further information regarding our obligation to finance certain capital expenditures under our triple-net leases. Earn-out Obligations As of March 31, 2026, we are party to purchase and sale agreements that provide for earn‑out obligations totaling up to $45.1 million related to the acquisition of skilled nursing facilities and U.K. Care Homes. This includes an earn‑out obligation of up to $10.0 million for one SNF in Virginia acquired in 2024, which becomes available upon the operator’s achievement of specified performance thresholds from October 2025 through October 2026. In addition, we have an earn‑out obligation of up to $32.5 million under a purchase and sale agreement for five SNFs in Virginia, North Carolina, and Maryland acquired in 2025, which becomes available upon the operator’s achievement of specified performance thresholds from December 2026 through December 2028. Dividend Plans We are required to pay dividends in order to maintain our REIT status and we expect to make quarterly dividend payments in cash with the annual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. See Note 9, Equity and Redeemable Non controlling Interests, to our condensed consolidated financial statements included in this report for a summary of the cash dividends per share of our common stock declared by our board of directors for the three months ended March 31, 2026 . Subsidiary Issuer and Guarantor Financial Information CareTrust REIT and the Operating Partnership have filed a registration statement to registe r the offer and sale of, among other securities, debt securities of CareTrust REIT and/or the Operating Partnership. Debt securities offered by the Operating Partnership will be fully and unconditionally guaranteed by CareTrust REIT. Debt securities offered by CareTrust REIT will be fully and unconditionally guaranteed by the Operating Partnership. CareTrust REIT owns substantially all of its assets and properties and conducts its operations through the Operating Partnership. The Operating Partnership invests both directly and indirectly through its subsidiaries in real estate and real estate related assets. CareTrust REIT’s other subsidiaries, including, but not limited to, subsidiaries wholly or partially owned by the Operating Partnership that directly own our other real estate and real estate-related assets (collectively, the “non-guarantor subsidiaries”) will not provide a guarantee of any registered debt securities that may be issued by CareTrust REIT or the Operating Partnership. Although the Operating Partnership’s cash flow and ability to service any guaranteed registered debt securities does not rely solely on the cash flow generated by non-guarantor subsidiaries and their ability to make cash available to CareTrust REIT or the Operating Partnership, by dividend or otherwise, in the event that the earnings or available assets of CareTrust REIT or the Operating Partnership are insufficient, their ability to satisfy their obligations with respect to any registered debt securities could be dependent on the cash flow generated by the non-subsidiary guarantors and their ability to make cash available to the Operating Partnership. However, holders of the guaranteed registered debt securities will have a direct claim only against CareTrust REIT or the Operating Partnership, as applicable. In accordance with Regulation S-X, the following tables include summarized financial information for CareTrust REIT and the Operating Partnership, presented on a combined basis, excluding (i) intercompany balances and transactions 42 Table of Contents between CareTrust REIT and the Operating Partnership and (ii) investments in and equity in the earnings of non-guarantor subsidiaries. As of (in thousands) March 31, 2026 December 31, 2025 Assets: Cash and cash equivalents $ 199,547 $ 159,343 Other assets 2,411,101 2,414,686 Intercompany receivables from non-guarantor subsidiaries 648,349 649,032 Total assets $ 3,258,997 $ 3,223,061 Liabilities: Senior unsecured notes payable, net (1) $ 398,038 $ 397,816 Senior unsecured term loan, net (1) 496,608 496,404 Other liabilities 140,471 148,136 Total liabilities $ 1,035,117 $ 1,042,356 (1) The senior unsecured notes and senior unsecured term loan are obligations of the Operating Partnership and are guaranteed, jointly and severally, on an unsecured basis, by CareTrust REIT and substantially all of its other subsidiaries. Three Months Ended (in thousands) March 31, 2026 March 31, 2025 Total revenues $ 62,156 $ 51,219 Total expenses 36,636 23,946 Total gain 868 5,163 Net income $ 26,388 $ 32,436 Net intercompany interest income $ 11,310 $ — Critical Accounting Policies and Estimates Our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information set forth in the Accounting Standards Codification, as published by the Financial Accounting Standards Board. GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Please refer to “Critical Accounting Estimates” in the “Management’s Discussion and Analysis of Financial Condition and Results of Ope rations” section of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 12, 2026, for further information regarding the critical accounting policies that affect our more significant estimates and judgments used in the preparation of our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. There have been no material changes in such critical accounting policies during the three months ended March 31, 2026.