CareTrust REIT (CTRE) Financial Report Summaries

Risks

• We are dependent on the healthcare operators that lease our properties as well as the borrowers under our mortgage secured loans and mezzanine loans to successfully operate their businesses and make contractual payments, and an event that materially and adversely affects their business, financial position or results of operations could materially and adversely affect our business, financial position or results of operations.
• Unstable market and economic conditions may have serious adverse consequences on our business, results of operations and financial condition.
• Our tenants and borrowers depend on reimbursement from government and other third-party payors and if reimbursement rates from such payors are reduced by future legislative reform, it could cause our tenants’ and borrowers’ revenues to decline and could affect their ability to meet their obligations to us.
• We face potential adverse consequences of bankruptcy, insolvency or financial deterioration of our tenants or borrowers.
• Replacement tenants or operators may be difficult to identify and we may be required to incur substantial renovation costs to make our healthcare properties suitable for such tenants or operators.
• We have incurred and may in the future incur impairment charges, which could negatively impact our results of operations.
• The geographic concentration of some of our facilities could leave us vulnerable to an economic downturn, regulatory changes or acts of nature in those areas.
• We are subject to risks associated with public health crises and government measures to prevent the spread of infectious diseases.
• We pursue property acquisitions and seek strategic opportunities in the ordinary course of our business, which may result in significant usage of management resources or costs, and we may not fully realize the potential benefits of such transactions.
• Investments in consolidated joint ventures involve risks not present in investments in which we are the sole investor.
• Increased competition has resulted and may further result in lower net revenues for some of our tenants and borrowers and may affect their ability to meet their financial and other contractual obligations to us.
• Required regulatory approvals can delay or prohibit transfers of our healthcare properties, which could result in periods in which we are unable to receive rent for such properties.
• We may not be able to sell properties when we desire because real estate investments are relatively illiquid, which could materially and adversely affect our business, financial position or results of operations.
• We, our tenants or our borrowers may experience uninsured or underinsured losses, which could result in a significant loss of the capital we have invested in a property, decrease anticipated future revenues or cause us to incur unanticipated expenses.
• We are, and may continue to be, exposed to contingent rent escalators, which could hinder our profitability and growth.
• Cybersecurity incidents or other damage to the information systems and technology of us, our tenants or borrowers could harm our business.
• Bank failures or other events affecting financial institutions could have a material adverse effect on our, our tenants’ or our borrowers’ liquidity, results of operations, and financial condition.
• Healthcare reform legislation impacts cannot accurately be predicted and could adversely affect our results of operations.
• Tenants and borrowers that fail to comply with applicable requirements of governmental reimbursement programs, such as Medicare or Medicaid, may cease to operate or be unable to meet their financial and other contractual obligations to us.
• Tenants and borrowers that fail to comply with federal, state and local licensure, certification and inspection laws and regulations may cease to operate or be unable to meet their financial and other contractual obligations to us.
• Environmental compliance costs and liabilities may materially impair the value of properties owned by us.
• If we fail to qualify or remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face substantial tax liability, which could adversely affect our ability to raise capital or service our indebtedness.
• Legislative or other actions affecting REITs could have a negative effect on us.
• We could fail to qualify to be taxed as a REIT if income we receive from our tenants is not treated as qualifying income.
• Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
• REIT distribution requirements could adversely affect our ability to execute our business plan.
• Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.
• Complying with REIT requirements may cause us to forgo otherwise attractive acquisition opportunities or liquidate otherwise attractive investments.
• Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
• From time to time, we may have substantial indebtedness and we are able to incur significant additional indebtedness.
• We may be unable to service our indebtedness.
• We rely on our subsidiaries for our operating funds.
• Covenants in our debt agreements restrict our activities and could adversely affect our business.
• Increases in interest rates could increase our existing and future debt borrowing costs and adversely affect our stock price.
• Our charter restricts the ownership and transfer of our outstanding stock, which may have the effect of delaying, deferring or preventing a transaction or change of control of our company.
• Maryland law and provisions in our charter and bylaws may inhibit our stockholders from realizing a premium on their stock by delaying or preventing takeover attempts by third parties.