Summarized Condensed Consolidating Information

9 Months Ended

Sep. 30, 2019

Summarized Condensed Consolidating Information [Abstract]

Summarized Condensed Consolidating Information

SUMMARIZED CONDENSED CONSOLIDATING INFORMATION

The Notes issued by the Operating Partnership and CareTrust Capital Corp. on May 10, 2017 are jointly and severally, fully and unconditionally, guaranteed by CareTrust REIT, Inc., as the parent guarantor (the “Parent Guarantor”), and the wholly owned subsidiaries of the Parent Guarantor other than the Issuers (collectively, the “Subsidiary Guarantors” and, together with the Parent Guarantor, the “Guarantors”), subject to automatic release under certain customary circumstances, including if the Subsidiary Guarantor is sold or sells all or substantially all of its assets, the Subsidiary Guarantor is designated “unrestricted” for covenant purposes under the indenture governing the Notes, the Subsidiary Guarantor’s guarantee of other indebtedness which resulted in the creation of the guarantee of the Notes is terminated or released, or the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied.

The following provides information regarding the entity structure of the Parent Guarantor, the Issuers and the Subsidiary Guarantors:

CareTrust REIT, Inc. – The Parent Guarantor was formed on October 29, 2013 in anticipation of the separation of Ensign’s healthcare business and its real estate business into two separate and independently publicly traded companies (the “Spin-Off”) and was a wholly owned subsidiary of Ensign prior to the effective date of the Spin-Off on June 1, 2014. The Parent Guarantor did not conduct any operations or have any business prior to the date of the consummation of the Spin-Off related transactions.

CTR Partnership, L.P. and CareTrust Capital Corp. – The Issuers, each of which is a wholly owned subsidiary of the Parent Guarantor, were formed on May 8, 2014 and May 9, 2014, respectively, in anticipation of the Spin-Off and the related transactions. The Issuers did not conduct any operations or have any business prior to the date of the consummation of the Spin-Off related transactions.

Subsidiary Guarantors – The Subsidiary Guarantors consist of all of the subsidiaries of the Parent Guarantor other than the Issuers.

Pursuant to Rule 3-10 of Regulation S-X, the following summarized consolidating information is provided for the Parent Guarantor, the Issuers, and the Subsidiary Guarantors. There are no subsidiaries of the Company other than the Issuers and the Subsidiary Guarantors. This summarized financial information has been prepared from the financial statements of the Company and the books and records maintained by the Company.

CONDENSED CONSOLIDATING BALANCE SHEETS

SEPTEMBER 30, 2019

(in thousands, except share and per share amounts)

	Parent Guarantor			Issuers		Combined Subsidiary Guarantors		Elimination			Consolidated
Assets:
Real estate investments, net	$	—		$	878,848	$	525,176	$	—		$	1,404,024
Other real estate investments, net	—			41,728		3,080		—			44,808
Assets held for sale, net	—			34,590		—		—			34,590
Cash and cash equivalents	—			5,749		—		—			5,749
Accounts and other receivables, net	—			2,104		21		—			2,125
Prepaid expenses and other assets	—			30,198		4		—			30,202
Deferred financing costs, net	—			3,268		—		—			3,268
Investment in subsidiaries	949,133			524,410		—		(1,473,543		)	—
Intercompany	—			3,108		—		(3,108		)	—
Total assets	$	949,133		$	1,524,003	$	528,281	$	(1,476,651	)	$	1,524,766
Liabilities and Equity:
Senior unsecured notes payable, net	$	—		$	295,721	$	—	$	—		$	295,721
Senior unsecured term loan, net	—			198,661		—		—			198,661
Unsecured revolving credit facility	—			65,000		—		—			65,000
Accounts payable and accrued liabilities	—			15,488		763		—			16,251
Dividends payable	21,647			—		—		—			21,647
Intercompany	—			—		3,108		(3,108		)	—
Total liabilities	21,647			574,870		3,871		(3,108		)	597,280
Equity:
Common stock, $0.01 par value; 500,000,000 shares authorized, 95,103,270 shares issued and outstanding as of September 30, 2019	951			—		—		—			951
Additional paid-in capital	1,162,047			795,857		321,761		(1,117,618		)	1,162,047
Cumulative distributions in excess of earnings	(235,512		)	153,276		202,649		(355,925		)	(235,512		)
Total equity	927,486			949,133		524,410		(1,473,543		)	927,486
Total liabilities and equity	$	949,133		$	1,524,003	$	528,281	$	(1,476,651	)	$	1,524,766

CONDENSED CONSOLIDATING BALANCE SHEETS

DECEMBER 31, 2018

(in thousands, except share and per share amounts)

	Parent Guarantor			Issuers		Combined Subsidiary Guarantors		Elimination			Consolidated
Assets:
Real estate investments, net	$	—		$	887,921	$	328,316	$	—		$	1,216,237
Other real estate investments, net	—			12,299		5,746		—			18,045
Cash and cash equivalents	—			36,792		—		—			36,792
Accounts and other receivables, net	—			9,359		2,028		—			11,387
Prepaid expenses and other assets	—			8,666		2		—			8,668
Deferred financing costs, net	—			633		—		—			633
Investment in subsidiaries	786,030			484,955		—		(1,270,985		)	—
Intercompany	—			—		151,242		(151,242		)	—
Total assets	$	786,030		$	1,440,625	$	487,334	$	(1,422,227	)	$	1,291,762
Liabilities and Equity:
Senior unsecured notes payable, net	$	—		$	295,153	$	—	$	—		$	295,153
Senior unsecured term loan, net	—			99,612		—		—			99,612
Unsecured revolving credit facility	—			95,000		—		—			95,000
Accounts payable and accrued liabilities	—			13,588		2,379		—			15,967
Dividends payable	17,783			—		—		—			17,783
Intercompany	—			151,242		—		(151,242		)	—
Total liabilities	17,783			654,595		2,379		(151,242		)	523,515
Equity:
Common stock, $0.01 par value; 500,000,000 shares authorized, 85,867,044 shares issued and outstanding as of December 31, 2018	859			—		—		—			859
Additional paid-in capital	965,578			661,686		321,761		(983,447		)	965,578
Cumulative distributions in excess of earnings	(198,190		)	124,344		163,194		(287,538		)	(198,190		)
Total equity	768,247			786,030		484,955		(1,270,985		)	768,247
Total liabilities and equity	$	786,030		$	1,440,625	$	487,334	$	(1,422,227	)	$	1,291,762

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

(in thousands)

	Parent Guarantor			Issuers			Combined Subsidiary Guarantors		Elimination			Consolidated
Revenues:
Rental income	$	—		$	11,702		$	19,875	$	—		$	31,577
Independent living facilities	—			—			929		—			929
Interest and other income	—			808			—		—			808
Total revenues	—			12,510			20,804		—			33,314
Expenses:
Depreciation and amortization	—			7,756			5,664		—			13,420
Interest expense	—			7,064			—		—			7,064
Property taxes	—			972			53		—			1,025
Independent living facilities	—			—			806		—			806
Impairment of real estate investments	—			16,692			—		—			16,692
Provision for loan losses	—			1,076			—		—			1,076
General and administrative	1,095			2,407			—		—			3,502
Total expenses	1,095			35,967			6,523		—			43,585
Gain on sale of real estate	—			217			—		—			217
(Loss) income in Subsidiary	(8,959		)	14,281			—		(5,322		)	—
Net (loss) income	$	(10,054	)	$	(8,959	)	$	14,281	$	(5,322	)	$	(10,054	)

CONDENSED CONSOLIDATING INCOME STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018

(in thousands)

	Parent Guarantor		Issuers		Combined Subsidiary Guarantors		Elimination			Consolidated
Revenues:
Rental income	$	—	$	20,554	$	14,778	$	—		$	35,332
Tenant reimbursements	—		1,804		1,186		—			2,990
Independent living facilities	—		—		871		—			871
Interest and other income	—		317		—		—			317
Total revenues	—		22,675		16,835		—			39,510
Expenses:
Depreciation and amortization	—		6,833		4,518		—			11,351
Interest expense	—		6,805		—		—			6,805
Property taxes	—		1,804		1,186		—			2,990
Independent living facilities	—		—		766		—			766
General and administrative	987		2,101		—		—			3,088
Total expenses	987		17,543		6,470		—			25,000
Income in Subsidiary	15,497		10,365		—		(25,862		)	—
Net income	$	14,510	$	15,497	$	10,365	$	(25,862	)	$	14,510

CONDENSED CONSOLIDATING INCOME STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in thousands)

	Parent Guarantor		Issuers		Combined Subsidiary Guarantors		Elimination			Consolidated
Revenues:
Rental income	$	—	$	59,709	$	54,338	$	—		$	114,047
Independent living facilities	—		—		2,676		—			2,676
Interest and other income	—		1,828		622		—			2,450
Total revenues	—		61,537		57,636		—			119,173
Expenses:
Depreciation and amortization	—		22,989		15,770		—			38,759
Interest expense	—		21,209		—		—			21,209
Property taxes	—		2,200		107		—			2,307
Independent living facilities	—		—		2,232		—			2,232
Impairment of real estate investments	—		16,692		—		—			16,692
Provision for loan losses	—		1,076		—		—			1,076
General and administrative	3,236		8,110		72		—			11,418
Total expenses	3,236		72,276		18,181		—			93,693
Gain on sale of real estate	—		217		—		—			217
Income in Subsidiary	28,933		39,455		—		(68,388		)	—
Net income	$	25,697	$	28,933	$	39,455	$	(68,388	)	$	25,697

CONDENSED CONSOLIDATING INCOME STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

(in thousands)

	Parent Guarantor		Issuers		Combined Subsidiary Guarantors		Elimination			Consolidated
Revenues:
Rental income	$	—	$	60,122	$	43,734	$	—		$	103,856
Tenant reimbursements	—		5,360		3,614		—			8,974
Independent living facilities	—		—		2,515		—			2,515
Interest and other income	—		1,039		196		—			1,235
Total revenues	—		66,521		50,059		—			116,580
Expenses:
Depreciation and amortization	—		20,488		13,739		—			34,227
Interest expense	—		21,182		—		—			21,182
Property taxes	—		5,360		3,614		—			8,974
Independent living facilities	—		—		2,226		—			2,226
General and administrative	2,822		6,740		76		—			9,638
Total expenses	2,822		53,770		19,655		—			76,247
Gain on sale of real estate	—		2,051		—		—			2,051
Income in Subsidiary	45,206		30,404		—		(75,610		)	—
Net income	$	42,384	$	45,206	$	30,404	$	(75,610	)	$	42,384

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in thousands)

	Parent Guarantor			Issuers			Combined Subsidiary Guarantors			Elimination			Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(114	)	$	39,195		$	56,077		$	—		$	95,158
Cash flows from investing activities:
Acquisitions of real estate	—			(86,393		)	(212,164		)	—			(298,557		)
Improvements to real estate	—			(767		)	(463		)	—			(1,230		)
Purchases of equipment, furniture and fixtures	—			(2,922		)	(4		)	—			(2,926		)
Investment in real estate mortgage and other loans receivable	—			(14,699		)	—			—			(14,699		)
Principal payments received on real estate mortgage and other loans receivable	—			11,959			—			—			11,959
Repayment of other real estate investment	—			—			2,204			—			2,204
Escrow deposits for acquisitions of real estate	—			(22,920		)	—			—			(22,920		)
Net proceeds from sales of real estate	—			218			—			—			218
Distribution from subsidiary	59,155			—			—			(59,155		)	—
Intercompany financing	(193,325		)	(154,350		)	—			347,675			—
Net cash used in investing activities	(134,170		)	(269,874		)	(210,427		)	288,520			(325,951		)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net	195,963			—			—			—			195,963
Proceeds from the issuance of senior unsecured term loan	—			200,000			—			—			200,000
Borrowings under unsecured revolving credit facility	—			235,000			—			—			235,000
Payments on unsecured revolving credit facility	—			(265,000		)	—			—			(265,000		)
Payments on senior unsecured term loan	—			(100,000		)	—			—			(100,000		)
Payments of deferred financing costs	—			(4,534		)	—			—			(4,534		)
Net-settle adjustment on restricted stock	(2,524		)	—			—			—			(2,524		)
Dividends paid on common stock	(59,155		)	—			—			—			(59,155		)
Distribution to Parent	—			(59,155		)	—			59,155			—
Intercompany financing	—			193,325			154,350			(347,675		)	—
Net cash provided by (used in) financing activities	134,284			199,636			154,350			(288,520		)	199,750
Net decrease in cash and cash equivalents	—			(31,043		)	—			—			(31,043		)
Cash and cash equivalents, beginning of period	—			36,792			—			—			36,792
Cash and cash equivalents, end of period	$	—		$	5,749		$	—		$	—		$	5,749

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

(in thousands)

	Parent Guarantor			Issuers			Combined Subsidiary Guarantors			Elimination			Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities:	$	(7	)	$	28,087		$	44,310		$	—		$	72,390
Cash flows from investing activities:
Acquisitions of real estate	—			(75,621		)	—			—			(75,621		)
Improvements to real estate	—			(5,376		)	(25		)	—			(5,401		)
Purchases of equipment, furniture and fixtures	—			(1,193		)	(69		)	—			(1,262		)
Investment in real estate mortgage and other loans receivable	—			(2,598		)	—			—			(2,598		)
Principal payments received on real estate mortgage and other loans receivable	—			893			—			—			893
Escrow deposit for acquisition of real estate	—			(1,000		)	—			—			(1,000		)
Net proceeds from the sale of real estate	—			13,004			—			—			13,004
Distribution from subsidiary	45,827			—			—			(45,827		)	—
Intercompany financing	(129,251		)	44,216			—			85,035			—
Net cash used in investing activities	(83,424		)	(27,675		)	(94		)	39,208			(71,985		)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net	130,546			—			—			—			130,546
Borrowings under unsecured revolving credit facility	—			60,000			—			—			60,000
Payments on unsecured revolving credit facility	—			(135,000		)	—			—			(135,000		)
Net-settle adjustment on restricted stock	(1,288		)	—			—			—			(1,288		)
Dividends paid on common stock	(45,827		)	—			—			—			(45,827		)
Distribution to Parent	—			(45,827		)	—			45,827			—
Intercompany financing	—			129,251			(44,216		)	(85,035		)	—
Net cash provided by (used in) financing activities	83,431			8,424			(44,216		)	(39,208		)	8,431
Net increase in cash and cash equivalents	—			8,836			—			—			8,836
Cash and cash equivalents, beginning of period	—			6,909			—			—			6,909
Cash and cash equivalents, end of period	$	—		$	15,745		$	—		$	—		$	15,745