CareTrust REIT(CTRE) - 2024 Q3 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited condensed consolidated financial statements are presented, covering balance sheets, income statements, equity, cash flows, and detailed explanatory notes Condensed Consolidated Balance Sheets Total assets and equity significantly increased from December 2023 to September 2024, driven by real estate investments and paid-in capital, while liabilities decreased | Metric | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :-------------------------------- | :------------------------------- | | Real estate investments, net | $1,749,139 | $1,567,119 | | Other real estate related investments | $740,730 | $180,368 | | Total assets | $2,920,879 | $2,084,838 | | Senior unsecured term loan, net | $— | $199,559 | | Total liabilities | $496,143 | $666,121 | | Additional paid-in capital | $2,950,802 | $1,883,147 | | Total stockholders' equity | $2,422,196 | $1,416,819 | Condensed Consolidated Income Statements Net income substantially increased for both the three and nine months ended September 30, 2024, driven by higher rental and interest income, despite increased impairment charges and operating expenses | Metric | 3 Months Ended Sep 30, 2024 (in thousands) | 3 Months Ended Sep 30, 2023 (in thousands) | 9 Months Ended Sep 30, 2024 (in thousands) | 9 Months Ended Sep 30, 2023 (in thousands) | | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Total revenues | $77,381 | $55,877 | $209,342 | $158,036 | | Rental income | $57,153 | $51,218 | $166,062 | $145,126 | | Interest and other income | $20,228 | $4,659 | $43,280 | $12,910 | | Impairment of real estate investments | $8,417 | $8,232 | $36,872 | $31,510 | | Property operating expenses | $3,477 | $1,239 | $4,392 | $2,860 | | Net income attributable to CareTrust REIT, Inc. | $33,441 | $8,696 | $72,945 | $27,439 | | Basic EPS | $0.21 | $0.08 | $0.50 | $0.27 | | Diluted EPS | $0.21 | $0.08 | $0.50 | $0.27 | Condensed Consolidated Statements of Equity Total equity significantly increased from December 2023 to September 2024, primarily due to substantial common stock issuance and net income, partially offset by dividends | Metric | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------------------------------- | :-------------------------------- | :------------------------------- | | Common Shares Outstanding | 171,122,858 | 129,992,796 | | Common Stock Amount | $1,711 | $1,300 | | Additional Paid-in Capital | $2,950,802 | $1,883,147 | | Cumulative Distributions in Excess of Earnings | $(530,317) | $(467,628) | | Total Stockholders' Equity | $2,422,196 | $1,416,819 | | Total Equity | $2,424,736 | $1,418,717 | - Issuance of common stock, net, contributed $1,065,881 thousand to additional paid-in capital during the nine months ended September 30, 2024[10][130] Condensed Consolidated Statements of Cash Flows The company reported a significant net increase in cash for the nine months ended September 30, 2024, driven by strong operating and financing cash flows, despite increased investing activities | Cash Flow Activity | 9 Months Ended Sep 30, 2024 (in thousands) | 9 Months Ended Sep 30, 2023 (in thousands) | | :--------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net cash provided by operating activities | $169,043 | $112,096 | | Net cash used in investing activities | $(828,087) | $(232,305) | | Net cash provided by financing activities | $741,698 | $110,516 | | Net increase (decrease) in cash | $82,654 | $(9,693) | | Cash and cash equivalents, end of period | $377,102 | $3,485 | - Investing activities saw a substantial increase in cash usage, primarily for acquisitions of real estate ($267.4 million), preferred equity investments ($52.0 million), and other real estate related investments and loans receivable ($504.9 million)[12] - Financing activities were significantly boosted by $1,065.9 million in net proceeds from common stock issuance, offsetting the $200.0 million prepayment of the Term Loan and $75.0 million payment on secured borrowing[12] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and breakdowns of financial statement line items, significant accounting policies, and other relevant financial information 1. ORGANIZATION CareTrust REIT, Inc. is a publicly-traded REIT focused on acquiring, financing, developing, and owning real property for lease to third-party healthcare operators - As of September 30, 2024, the Company owned 226 skilled nursing facilities, multi-service campuses, assisted living facilities, and independent living facilities, comprising 24,512 operational beds and units in 31 states[14] - Other real estate related investments, including preferred equity and loans receivable, had a carrying value of $740.7 million as of September 30, 2024[14] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and Article 10 of Regulation S-X - Financial statements are prepared under GAAP for interim information and Article 10 of Regulation S-X, and should be read with the annual 10-K[15] - The company consolidates wholly-owned subsidiaries and Variable Interest Entities (VIEs) where it exercises control, eliminating intercompany transactions[15] 3. REAL ESTATE INVESTMENTS, NET Net real estate investments significantly increased to $1.75 billion as of September 30, 2024, with all owned facilities leased under triple-net agreements | Metric | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :-------------------------------- | :------------------------------- | | Real estate investments, net | $1,749,139 | $1,567,119 | | Buildings and improvements | $1,783,496 | $1,620,014 | - All owned and held-for-investment facilities are leased to various operators under triple-net leases, which contain annual escalators based on CPI or fixed rates[17] | Year | Future Minimum Lease Payments (in thousands) | | :---------- | :----------------------------------------- | | 2024 (3 mos) | $56,317 | | 2025 | $227,486 | | 2026 | $229,235 | | 2027 | $225,377 | | 2028 | $223,304 | | 2029 | $218,920 | | Thereafter | $1,066,803 | | Total | $2,247,442 | - The Company acquired 14 properties for $271.2 million with an initial annual cash rent of $21.9 million during the nine months ended September 30, 2024[22] - Several lease amendments and terminations occurred, including the Ensign lease amendment increasing annual cash rent by $0.6 million and $2.1 million, and new leases with Jaybird and Bayshire[23][24][26] [4. IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE AND ASSET SALES](index=13&type=section&id=4