PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Community Healthcare Trust Incorporated as of June 30, 2019 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to **$490.5 million** from **$426.6 million** at year-end 2018, driven by real estate and increased debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total real estate properties, net** | $445,738 | $389,632 | | **Total assets** | $490,500 | $426,570 | | **Debt, net** | $198,176 | $147,766 | | **Total liabilities** | $211,380 | $154,911 | | **Total stockholders' equity** | $279,120 | $271,659 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Revenues increased due to acquisitions, but higher operating and interest expenses led to a decrease in net income for both periods Income Statement Summary (in thousands) | Period | Metric | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | Total Revenues | $14,316 | $12,402 | | | Net Income | $2,066 | $2,417 | | | Diluted EPS | $0.09 | $0.12 | | **Six Months Ended June 30** | Total Revenues | $27,757 | $23,831 | | | Net Income | $3,516 | $4,289 | | | Diluted EPS | $0.16 | $0.22 | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) The company reported a comprehensive loss for Q2 and H1 2019, primarily due to unrealized losses on cash flow hedges - For the six months ended June 30, 2019, the company recorded a net income of **$3.5 million** but a comprehensive loss of **$1.9 million**. The difference was driven by a **$5.4 million** loss in other comprehensive income, mainly from the change in fair value of cash flow hedges[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased to **$279.1 million** from stock issuance and net income, offset by dividends and comprehensive loss - Key changes in stockholders' equity for the six months ended June 30, 2019 include net proceeds from common stock issuance of **$23.0 million**, net income of **$3.5 million**, and dividends paid of **$15.4 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash increased to **$14.4 million**, with **$64.8 million** used for acquisitions, funded by **$57.3 million** from financing Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $14,383 | $13,028 | | **Net cash used in investing activities** | ($64,783) | ($30,653) | | **Net cash provided by financing activities** | $57,273 | $17,279 | - The significant increase in cash used for investing activities in H1 2019 (**$64.8M** vs **$30.7M** in H1 2018) was primarily due to a higher volume of real estate acquisitions (**$63.4M** vs **$20.1M**)[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's healthcare REIT business, portfolio, acquisitions, credit, derivatives, and subsequent events - As of June 30, 2019, the Company's portfolio consisted of 108 real estate properties in 30 states, with an investment value of approximately **$511.6 million**[19](index=19&type=chunk)[37](index=37&type=chunk) - During the first six months of 2019, the Company acquired five real estate properties for an aggregate purchase price of approximately **$64.6 million**[44](index=44&type=chunk)[45](index=45&type=chunk) - On March 29, 2019, the Company amended its credit facility, adding a new **$75.0 million** term loan (A-3 Term Loan) maturing in 2026[50](index=50&type=chunk) - Subsequent to quarter-end, the Company acquired three additional properties for approximately **$52.6 million** and declared a quarterly dividend of **$0.4125 per share**[89](index=89&type=chunk)[90](index=90&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, acquisition pipeline, liquidity, capital resources, and FFO reconciliation [Trends and Matters Impacting Operating Results](index=22&type=section&id=Trends%20and%20Matters%20Impacting%20Operating%20Results) Operating results are driven by acquisitions, with **$64.6 million** in H1 2019 and a **$102.8 million** pipeline, maintaining **90.1%** occupancy - The company has a significant acquisition pipeline with nine properties under definitive purchase agreements for an aggregate expected price of approximately **$102.8 million** (**$15.8 million** expected in Q3 2019 and **$87.0 million** through 2020)[101](index=101&type=chunk)[102](index=102&type=chunk) - As of June 30, 2019, the real estate portfolio was approximately **90.1% leased**[104](index=104&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Revenue increased due to acquisitions, but higher expenses led to decreased net income, with FFO reconciliation provided FFO Reconciliation (in thousands) | Period | Metric | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | Net Income | $2,066 | $2,417 | | | Funds from Operations | $7,406 | $7,041 | | | FFO per Share-Diluted | $0.40 | $0.40 | | **Six Months Ended June 30** | Total Revenues | $27,757 | $23,831 | | | Net Income | $3,516 | $4,289 | | | Funds from Operations | $14,138 | $13,824 | | | FFO per Share-Diluted | $0.76 | $0.78 | - The increase in revenues for Q2 2019 (**$1.9 million** or **15.4%**) and H1 2019 (**$3.9 million** or **16.5%**) compared to the same periods in 2018 was mainly due to acquisitions of real estate[117](index=117&type=chunk)[125](index=125&type=chunk) - Interest expense increased significantly by **43.3%** in Q2 and **51.6%** in H1 2019 year-over-year, primarily due to additional Term Loan borrowings to fund acquisitions[122](index=122&type=chunk)[130](index=130&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity from operations, credit, and equity issuances supports acquisitions and dividends, with **$131.0 million** borrowing capacity - As of June 30, 2019, the company had approximately **$131.0 million** of borrowing capacity remaining under its Revolving Credit Facility[140](index=140&type=chunk) - During the first six months of 2019, the company issued **641,053 shares** through its ATM Program, receiving proceeds of approximately **$23.2 million**[148](index=148&type=chunk) - The company's debt to total capitalization ratio was approximately **36.5%** at June 30, 2019[140](index=140&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk on borrowings using derivative instruments like interest rate swaps, not for speculation - The company's main market risk is **interest rate risk** associated with its borrowings[157](index=157&type=chunk) - To manage interest rate risk, the company uses derivative instruments, such as **interest rate swaps**, to hedge its exposure[157](index=157&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[158](index=158&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[159](index=159&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material pending or threatened litigation - The Company is not aware of any pending or threatened litigation that would have a **material adverse effect** on its financial condition or results[160](index=160&type=chunk) [Risk Factors](index=29&type=page&id=Item%201A.%20Risk%20Factors) The company will become a large accelerated filer, increasing compliance requirements and costs, including auditor attestation - The company will no longer qualify as an **emerging growth company** after December 31, 2019, and will be deemed a **large accelerated filer**[161](index=161&type=chunk)[163](index=163&type=chunk) - As a large accelerated filer, the company will face increased compliance requirements, including an **auditor attestation** on the effectiveness of internal control over financial reporting, which is expected to increase compliance costs[163](index=163&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the period - None[172](index=172&type=chunk) [Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the period - None[173](index=173&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[174](index=174&type=chunk) [Other Information](index=31&type=section&id=Item%205.%20Other%20Information) No other information to report for the period - None[175](index=175&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL data files - The exhibits required by Item 601 of Regulation S-X are filed with the report and listed in the Exhibit Index[176](index=176&type=chunk)

Community Healthcare Trust Inc. (NYSE:CHCT) Q1 2019 Results Earnings Conference Call May 8, 2019 10:00 AM ET Company Participants Timothy Wallace - Chairman, CEO & President Page Barnes - Chief Operating Officer Leigh Ann Stach - Chief Accounting Officer Dave Dupay - Chief Financial Officer Conference Call Participants Sheila McGrath - Evercore ISI Barry Oxford - D.A. Davidson Drew Babin - Baird Alexander Goldfarb - Sandler O'Neill Rob Stevenson - Janney Nate Crossett - Berenberg Bryan Maher - B. Riley FBR ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number: 001-37401 Community Healthcare Trust Incorporated (Exact Name of Registrant as Specified in Its Charter) Maryland (State or Other J ...

Financial Data and Key Metrics Changes - Total revenues for Q4 2018 were approximately $12.2 million, an increase from $11 million in Q4 2017 [20] - Total revenues for 2018 were $48.6 million, compared to $37.3 million in 2017 [21] - The company reported a net loss of $1.885 million for Q4 2018, compared to a net income of $1.552 million in Q4 2017 [25] - Funds from operations (FFO) for Q4 2018 were $2.9 million, impacted by Highland's rent not recognized [26][27] - Adjusted funds from operations (AFFO) for Q4 2018 were $7.2 million or $0.41 per share diluted, compared to $6.6 million or $0.37 per share for the same period in 2017 [27][28] Business Line Data and Key Metrics Changes - Rental and investment interest revenues for Q4 2018 were $10.5 million, up from $9.5 million in Q4 2017 [21] - The real estate portfolio was approximately 89% leased, with a pro forma total of $10.8 million in rental and interest revenues if all Q4 acquisitions had occurred at the start of the quarter [22] Market Data and Key Metrics Changes - The company acquired 11 properties in Q4 2018 for approximately $24.1 million, with anticipated annual returns of 9.04% to 9.51% [14] - Two properties were acquired in early 2019 for approximately $32.7 million, with anticipated annual returns of 9% to 9.3% [15] Company Strategy and Development Direction - The company plans to continue utilizing its ATM program to access equity markets opportunistically [17] - The company aims to maintain debt below 40% of the book-to-total cap, with a long-term goal of 35% [57] - The management is focused on building a future pipeline of acquisitions to ensure visibility into future growth [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in collecting previously unrecognized amounts from Highland's rent and interest, citing strong cash flow from the facility [46] - The company anticipates occupancy levels to begin increasing in 2019, despite a recent decline [48][49] Other Important Information - The company declared a dividend of $40.75 per common share for Q4 2018, marking a continuous increase since its IPO [18] - The company has a signed lease with a new operator for the Highlands facility, expected to provide similar cash flow as before [10] Q&A Session Summary Question: Impact of operator situation on Q1 earnings - Management indicated that the transition agreement is in place and expects minimal impact on Q1 earnings, with payments being received [30] Question: Acquisition volume comparison to last year - Management noted that the acquisition volume is significantly higher this year due to a developed pipeline and ongoing opportunities [31][34] Question: Update on restructured tenant - Management reported positive performance from the restructured tenant and anticipates a good year ahead, with potential for significant paydown of the loan [38] Question: Concerns about other tenants - Management stated that while there are over 300 tenants, none are of significant concern at this time [42] Question: Expected trends in lease percentage - Management expects lease percentages to rise throughout 2019, with improved metrics compared to previous years [48][49] Question: General and administrative expenses outlook - Management anticipates a 5% to 10% increase in G&A expenses due to potential new hires [56]

Investment Portfolio - As of December 31, 2018, the company had investments of approximately $444.9 million in 103 real estate properties, totaling approximately 2.2 million square feet, with an occupancy rate of 88.8%[20] - In 2018, the company acquired 19 properties totaling approximately 286,000 square feet for an aggregate purchase price of approximately $55.1 million, with expected returns ranging from 9% to 11%[24] - The company’s real estate portfolio is diversified across various healthcare facility types, including medical office buildings, physician clinics, and surgical centers[36] - Approximately 42.4% of consolidated revenues for the year ended December 31, 2018, were derived from properties located in Illinois (18.9%), Ohio (13.4%), and Florida (10.1%)[22] - Approximately 42.4% of annualized rent comes from properties located in Illinois, Ohio, and Florida, making the company vulnerable to economic downturns in these states[84] Financial Performance and Risks - The company had a debt-to-book capitalization ratio of 35.2% as of December 31, 2018, with $43.0 million outstanding on its revolving credit facility and $100.0 million on term loans[31] - A significant portion of revenue is derived from rent payments, and tenant bankruptcies or financial difficulties could materially impact operating results[75] - The company expects to rely on external capital sources for future needs, which may be challenging if market conditions are unfavorable[85] - The company must distribute at least 90% of its REIT taxable income to maintain its status, limiting retained cash for future investments[86] - The company may face unexpected liabilities from acquisitions, which could adversely affect its financial condition and results of operations[165] Regulatory Environment - The Affordable Care Act continues to evolve, impacting reimbursement models for healthcare providers, which may affect tenants' revenue collection and lease compliance[49] - The healthcare industry is heavily regulated, and changes in laws or reimbursement models could adversely affect tenants' ability to make rent payments[48] - Legislative proposals, including amendments to the Affordable Care Act and quality control reforms for Medicaid and Medicare, could significantly alter healthcare service delivery and reimbursement structures[54] - Section 603 of the Bipartisan Budget Act of 2015 lowered Medicare rates for off-campus outpatient departments, effective January 1, 2017, aligning them with physician-office rates, potentially affecting the financial performance of certain facilities[51] Competition and Market Conditions - Increased competition for healthcare-related real estate may drive up acquisition costs, adversely affecting investment returns[57] - The company relies on off-market or lightly marketed transactions for property acquisitions, which may be hindered by increased competition from larger REITs and investment funds[68] - Uncertain market conditions could lead to potential losses when selling healthcare properties, impacting cash distributions and overall financial performance[134] Management and Governance - The management team has over 30 years of experience in healthcare, real estate, and public REIT management, enhancing the company's competitive position[28] - The company has structured compensation for its board and management to align their interests with stockholders, with 100% of named executive officers' compensation in restricted stock[32] - Conflicts of interest may arise between stockholders and holders of OP units, potentially impeding beneficial business decisions[152] Operational Challenges - The company is facing challenges in completing pending acquisitions due to various conditions, which may adversely affect financial condition and stockholder distributions[73] - The company aims to expand operations into new target submarkets but may encounter difficulties due to unfamiliarity with local conditions and potential competition[74] - The company carries comprehensive liability and property insurance, ensuring coverage for its real estate assets[58] Compliance and Legal Risks - The company is subject to various federal, state, and local environmental laws, which could impact operational costs and liabilities[55] - Compliance with various federal, state, and local laws may incur significant costs, adversely affecting financial results and stockholder distributions[141] - Environmental compliance costs and liabilities could negatively impact the company's financial condition and results of operations[145] - Legal actions against healthcare-related tenants may lead to increased operating costs and uninsured liabilities, affecting their rent payment capabilities[126][128] Debt and Financing - The company incurred significant legal, accounting, insurance, and other expenses as a result of becoming a public company, which are expected to increase after it ceases to be an emerging growth company[164] - The company may not be able to secure favorable terms for refinancing its indebtedness, which could impact its cash flow and ability to make distributions[168] - The company’s financing policy prohibits incurring debt in excess of 40% of total book capitalization, but this policy can be changed by the board without stockholder approval[172] Insurance and Taxation - The company evaluates its insurance coverage annually, but uninsured losses from events like floods or earthquakes could significantly affect its financial condition[137] - The company may face tax liabilities that reduce cash flows, including taxes on undistributed income and certain activities[209] - The company has formed a TRS, which will be subject to federal and state income tax on its taxable income, potentially increasing overall tax liability[218]