UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 1, 2015
CareTrust REIT, Inc.
(Exact name of registrant as specified in its charter)
Maryland | 001-36181 | 46-3999490 | ||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) | ||
905 Calle Amanecer, Suite 300, | ||||
San Clemente, CA | 92673 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (949) 542-3130
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Explanatory Note
CareTrust REIT, Inc. (the Company) previously filed a Current Report on Form 8-K with the Securities and Exchange Commission (the SEC) reporting the completion of the acquisition on October 1, 2015 by CTR Partnership, L.P., a subsidiary of the Company, pursuant to the Purchase and Sale Agreement and Joint Escrow Instructions (as amended on July 30, 2015, the Purchase and Sale Agreement) with affiliates of Liberty Nursing Centers (each of which is identified in the Purchase and Sale Agreement) of a 14-facility skilled nursing and assisted living portfolio for approximately $177 million, inclusive of estimated transaction costs (the Liberty Acquisition). The properties acquired in the Liberty Acquisition are operated by Pristine Ohio Holdings, LLC and its subsidiaries, entities unaffiliated with either Liberty Nursing Centers or the Company, under a long-term, triple-net lease (the Master Lease), dated July 30, 2015. The tenants obligations under the Master Lease are guaranteed by Pristine Senior Living, LLC (Pristine) and two of its principals pursuant to a Guaranty of Master Lease, dated July 30, 2015. The Master Lease commenced upon the closing of the Liberty Acquisition.
This Current Report on Form 8-K/A is filed solely for the purpose of amending the Current Report on Form 8-K filed with the SEC on October 27, 2015 to provide the required financial statements and information related to the Liberty Acquisition.
Item 9.01. | Financial Statements and Exhibits. |
(a) Financial Statements
Attached as Exhibit 99.1 hereto are the audited consolidated financial statements of Pristine Ohio Holdings, LLC and its subsidiaries as of September 30, 2015 and for the period July 9, 2015 (inception) through September 30, 2015.
(b) Pro Forma Financial Information
Attached as Exhibit 99.2 hereto are unaudited pro forma consolidated and combined financial statements of CareTrust REIT, Inc. for the year ended December 31, 2014 and for the nine months ended September 30, 2015.
(d) Exhibits.
Exhibit No. | Description | |
23.1 | Consent of Bradley Associates, P.C. | |
99.1 | Audited Consolidated Financial Statements of Pristine Ohio Holdings, LLC and Subsidiaries as of September 30, 2015 and for the period July 9, 2015 (Inception) through September 30, 2015. | |
99.2 | Unaudited Pro Forma Consolidated and Combined Financial Statements of CareTrust REIT, Inc. for the year ended December 31, 2014 and for the nine months ended September 30, 2015. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 17, 2015 | CARETRUST REIT, INC. | |||||||
By: | /s/ Gregory K. Stapley | |||||||
Name: | Gregory K. Stapley | |||||||
Title: | President, Chairman and Chief Executive Officer |
EXHIBIT INDEX
Exhibit No. | Description | |
23.1 | Consent of Bradley Associates, P.C. | |
99.1 | Audited Consolidated Financial Statements of Pristine Ohio Holdings, LLC and Subsidiaries as of September 30, 2015 and for the period July 9, 2015 (Inception) through September 30, 2015. | |
99.2 | Unaudited Pro Forma Consolidated and Combined Financial Statements of CareTrust REIT, Inc. for the year ended December 31, 2014 and for the nine months ended September 30, 2015. |
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors of
CareTrust REIT, Inc.:
We consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-204594) and Form S-8 (No. 333-196634) of CareTrust REIT, Inc. of our report dated December 10, 2015 to the consolidated balance sheet of Pristine Ohio Holdings, LLC and Subsidiaries as of September 30, 2015 and the related consolidated statement of members equity for the period ended September 30, 2015, which report appears in this Form 8-K/A of CareTrust REIT, Inc. dated December 17, 2015.
/s/ Bradley & Associates, Inc. |
Indianapolis, Indiana |
December 10, 2015 |
Exhibit 99.1
Pristine Ohio Holdings, LLC and Subsidiaries
Consolidated Financial Statements
For the Period July 9, 2015 (Inception) through September 30, 2015
And
Independent Auditors Report
Table of Contents
Independent Auditors Report |
1 | |||
Financial Statements: |
||||
Consolidated Balance Sheet |
3 | |||
Consolidated Statement of Members Equity |
4 | |||
Notes to Consolidated Financial Statements |
5 |
Independent Auditors Report
To the Member
of Pristine Ohio Holdings, LLC and Subsidiaries
We have audited the accompanying consolidated financial statements of Pristine Ohio Holdings, LLC and Subsidiaries, which comprise the consolidated balance sheet as of September 30, 2015, and the related consolidated statement of members equity for the period July 9, 2015 (inception) through September 30, 2015, and the related notes to the consolidated financial statements.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Pristine Ohio Holdings, LLC and Subsidiaries as of September 30, 2015, and the changes in members equity for the initial period then ended in accordance with accounting principles generally accepted in the United States of America.
December 10, 2015
/s/ Bradley Associates |
Pristine Ohio Holdings, LLC and Subsidiaries
Consolidated Balance Sheet
September 30, 2015 |
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Assets |
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Cash |
$ | 2,800 | ||
Related party receivables |
200 | |||
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Total assets |
$ | 3,000 | ||
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Members Equity |
$ | 3,000 | ||
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The accompanying notes are an integral part
of these consolidated financial statements.
- 3 -
Pristine Ohio Holdings, LLC and Subsidiaries
Consolidated Statement of Members Equity
For the Period July 9, 2015 (Inception) through September 30, 2015
Balance at beginning of period |
$ | | ||
Contributions from member |
3,000 | |||
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Balance at end of period |
$ | 3,000 | ||
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The accompanying notes are an integral part
of these consolidated financial statements.
- 4 -
Pristine Ohio Holdings, LLC and Subsidiaries
Notes to Consolidated Financial Statements
1. | Nature of Business |
Pristine Ohio Holdings, LLC and Subsidiaries (together known as the Company) was formed on July 9, 2015 (inception), for the purpose of providing long-term care services to elderly individuals.
The Company is wholly owned by Pristine Senior Living, LLC (the member) and consists of sixteen limited liability companies. The rights and obligations of the member of each individual company are governed by separate operating agreements. These operating agreements provide that no member or manager shall be held liable to the Company other than for gross negligence, willful misconduct, or a knowing violation of law.
2. | Significant Accounting Policies |
Principles of Consolidation
The consolidated financial statements include the accounts of Pristine Ohio Holdings, LLC and its wholly-owned subsidiaries. All material intercompany accounts and transactions are eliminated in consolidation.
Use of Estimates
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
Cash is comprised of all cash accounts held in banks which are not subject to withdrawal restrictions or penalties.
Related Party Receivables
Related party receivables reflect member contributions due to the Company and are recorded at the amount management expects to settle from the outstanding balances.
Statements of Income and Cash Flows
Statements of income and cash flows have not been presented as there has been no activity since formation.
- 5 -
Pristine Ohio Holdings, LLC and Subsidiaries
Notes to Consolidated Financial Statements
2. | Significant Accounting Policies (Continued) |
Federal and State Taxes
The Company consists entirely of single member limited liability companies. Under provisions of the Internal Revenue Code, limited liability companies treated as partnerships are not subject to income taxes, and any income or loss realized is taxed to the individual members. As of September 30, 2015, the Company has not filed any tax returns.
3. | Subsequent Events |
On October 1, 2015, the Company formally commenced the operations of fifteen long-term care facilities located in Ohio. These operations are managed by Pristine Senior Management, LLC, a related party through common ownership.
In conjunction with the start of operations, the Company entered into a master lease agreement, on a triple-net basis, with an unrelated third party for fourteen of the skilled nursing facilities. For the remaining facility, located in Fremont, Ohio, the Company assumed an unrelated lease agreement from the previous owner.
On October 1, 2015, the Company entered into a revolving credit agreement with a bank for working capital purposes. Under the agreement, the lender makes revolving loans to the Company up to 85% of the amount of the Companys eligible accounts receivable multiplied by the net collective value advance rate, less reserves against eligible accounts, but not to exceed $20 million. The loan bears interest at a rate of 300 basis points in excess of the one-month LIBOR rate, with a minimum rate set at 3.50%. In accordance with the terms of the agreement, all receipts of the Company are deposited into a lockbox or into accounts that sweep into the lenders lockbox for credit against the outstanding balance on the loan. The Company draws on the revolving loan on a weekly basis. As of December 10, 2015, the Company has made draws totaling $11.5 million, and the balance of the loan is $9.7 million.
Subsequent events have been evaluated through December 10, 2015, which is the date the financial statements were available to be issued.
- 6 -
Exhibit 99.2
UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated and combined financial statements present (x) our unaudited pro forma consolidated and combined statement of operations for the year ended December 31, 2014, which has been derived from and should be read in conjunction with our audited consolidated and combined historical financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 and (y) our unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2015, which has been derived from and should be read in conjunction with our unaudited consolidated historical financial statements included in our Quarterly Report on Form 10-Q for the period ended September 30, 2015, which is incorporated by reference into this prospectus supplement.
On June 1, 2014, The Ensign Group, Inc. (Ensign) completed the separation of its healthcare business and its real estate business into two separate and independent publicly traded companies through the distribution of all of the outstanding shares of common stock of CareTrust to Ensign stockholders on a pro rata basis (the Spin-Off). Ensign stockholders received one share of CareTrust common stock for each share of Ensign common stock held at the close of business on May 22, 2014, the record date for the Spin-Off. The Spin-Off was effective from and after June 1, 2014, with all of the outstanding shares of our common stock distributed to Ensign stockholders on a pro rata basis on June 2, 2014. To govern our relationship with Ensign after the Spin-Off, we entered into, among others: (1) a separation and distribution agreement setting forth the mechanics of the Spin-Off, certain organizational matters and other ongoing obligations of Ensign and CareTrust; (2) the triple-net long-term leases for properties leased to affiliates of Ensign (Ensign Master Leases); (3) an agreement pursuant to which Ensign and CareTrust agreed to make certain business opportunities available to each other during the one-year period following the Spin-Off (which has now expired); (4) an agreement relating to tax matters; (5) an agreement pursuant to which Ensign provides certain administrative and support services to CareTrust on a transitional basis (which has now expired); and (6) an agreement relating to employee matters.
We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2014. In order to comply with certain REIT qualification requirements, on October 17, 2014, our board of directors declared a dividend, the Special Dividend, which represents the amount of accumulated earnings and profits allocated to CareTrust as a result of the Spin-Off. The Special Dividend was paid on December 10, 2014, to stockholders of record as of October 31, 2014, in a combination of both cash and stock. The cash portion totaled $33.0 million and the stock portion totaled $99.0 million. We issued 8,974,249 shares of common stock in connection with the stock portion of the Special Dividend.
In connection with and prior to the Spin-Off, we entered into several financing transactions. The financing transactions include, among other things, (1) the issuance by CTR Partnership, L.P. (the Operating Partnership) and CareTrust Capital Corp. of $260.0 million of senior unsecured notes payable, the Notes, and (2) the incurrence of approximately $50.7 million of additional secured mortgage indebtedness on ten of our properties (collectively, the Financing Transactions). We used a portion of the net proceeds from the offering of the Notes to make a transfer to Ensign in order for Ensign to repay certain indebtedness, pay trade payables and, subject to the approval of Ensigns board of directors, pay up to eight regular quarterly dividends. The Spin-Off, the Special Dividend and the Financing Transactions are collectively referred to herein as the Transactions.
On July 1, 2015, we acquired the 70-unit/115 bed Bristol Court Assisted Living memory care facility located in St. Petersburg, Florida for approximately $8.5 million (the Bristol Court Acquisition). In connection with the Bristol Court Acquisition, we entered into a long-term, triple net lease with Better Senior Living Consulting, LLC, which assumed operations of the facility effective as of July 1, 2015. Also on July 1, 2015, we acquired the Shamrock Nursing and Rehabilitation Center, a 105-bed skilled nursing facility located in Dublin, Georgia for approximately $8.3 million (the Shamrock Acquisition and together with the Bristol Court Acquisition, the Recent Acquisitions). In connection with the Shamrock Acquisition, we entered into a long-term, triple net lease with Trillium Healthcare Group, LLC, which assumed operations of the facility effective as of July 1, 2015.
On August 18, 2015, we completed an underwritten public offering of 16.33 million newly issued shares of our common stock pursuant to an effective registration statement (the Offering). We received net proceeds, before expenses, of $163.7 million from the Offering.
On October 1, 2015, we completed the acquisition of a 14-facility skilled nursing and assisted living portfolio for approximately $177 million (the Liberty Acquisition). In connection with the Liberty Acquisition, we entered into a long-term, triple-net lease with Pristine Ohio Holdings, LLC and its subsidiaries, which assumed operations of the facility effective as of October 1, 2015.
The unaudited pro forma consolidated and combined statement of operations for the year ended December 31, 2014 gives effect to (w) the Transactions, including: (1) the full amount of rental income that would have been payable pursuant to the Ensign Master Leases (had they been in effect for the entire period); (2) the distribution of 22,435,938 shares of CareTrust common stock by Ensign to Ensign stockholders in the Spin-Off; (3) the offering of $260.0 million aggregate principal amount of the Notes; (4) the transfer to Ensign of approximately $220.8 million of proceeds from the issuance of the Notes in order for Ensign to repay certain indebtedness, pay trade payables and, subject to the approval of Ensigns board of directors, pay up to eight regular quarterly dividends; (5) the incurrence of an additional $50.7 million of secured mortgage indebtedness, and the anticipated interest expense related thereto; and (6) the elimination of income tax provisions in conjunction with the election of REIT status, (x) the Recent Acquisitions, and (y) the Liberty Acquisition and the Offering and the use of net proceeds therefrom to fund a portion of the purchase price of the Liberty Acquisition and to pay related fees and expenses. We used borrowings under our new unsecured credit facility to fund the remaining portion of the purchase price of the Liberty Acquisition. The unaudited pro forma consolidated financial data for the nine months ended September 30, 2015 gives effect to (x) the Recent Acquisitions, and (y) the Liberty Acquisition and the Offering and the use of net proceeds therefrom.
The unaudited pro forma consolidated and combined statement of operations for the year ended December 31, 2014 and nine months ended September 30, 2015 assumes the Transactions, the Recent Acquisitions, the Liberty Acquisition and the Offering and the use of net proceeds therefrom occurred on January 1, 2014. The pro forma financial data is not necessarily indicative of what our actual results of operations would have been as of the date and for the periods indicated if we had been a separate, stand-alone company during the periods presented, nor does it purport to represent our future financial condition or results of operations. A pro forma balance sheet is not included as of September 30, 2015, as all of the previously discussed transactions were reflected on the balance sheet as of September 30, 2015.
The unaudited pro forma consolidated and combined financial data assumes that 100% of taxable income has been distributed and that all relevant REIT qualifying tests, as dictated by the Internal Revenue Code of 1986, as amended, and the Internal Revenue Service rules and interpretations, were met for the entire year.
The unaudited pro forma consolidated and combined financial data was prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in the notes to the unaudited pro forma consolidated and combined financial data. The unaudited pro forma consolidated and combined financial data is presented for illustrative purposes only and does not purport to reflect the results we may achieve in future periods or the historical results that would have been obtained had the Transactions, the Recent Acquisitions, the Liberty Acquisition and the Offering and the use of net proceeds therefrom been completed on January 1, 2014. The unaudited pro forma consolidated and combined financial data also does not give effect to any anticipated synergies, operating efficiencies or cost savings that may result from the Transactions, the Recent Acquisitions, the Liberty Acquisition or the Offering and the use of net proceeds therefrom which generally would be reflected in general and administrative expenses.
The actual results reported in periods following the Transactions, the Recent Acquisitions, the Liberty Acquisition and the Offering and the use of net proceeds therefrom may differ significantly from those reflected in the unaudited pro forma consolidated and combined financial data for a number of reasons, including inaccuracy of the assumptions used to prepare this statement of operations. See Risk Factors, Statement Regarding Forward-Looking Statements and Managements Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2014 and our subsequent filings with the SEC for a discussion of matters that could cause our actual results to differ materially from those contained in the unaudited pro forma consolidated and combined financial data.
CARETRUST REIT, INC.
PRO FORMA CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Year Ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Historical |
Pro Forma Adjustments For |
Note | Subtotal | Pro Forma Adjustments For Liberty Acquisition and Offering |
Note | Pro Forma | ||||||||||||||||||||||||||||||
Transactions | Note | Recent Acquisitions |
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Revenues: |
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Rental income |
$ | 51,367 | $ | 4,772 | (1 | ) | $ | 1,515 | (4 | ) | $ | 57,654 | $ | 17,023 | (7 | ) | $ | 74,677 | ||||||||||||||||||
Tenant reimbursements |
4,956 | 22 | (4 | ) | 4,978 | 1,300 | (7 | ) | 6,278 | |||||||||||||||||||||||||||
Independent living facilities |
2,519 | 2,519 | 2,519 | |||||||||||||||||||||||||||||||||
Interest and other income |
55 | 55 | 55 | |||||||||||||||||||||||||||||||||
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Total revenue |
58,897 | 4,772 | 1,537 | 65,206 | 18,323 | 83,529 | ||||||||||||||||||||||||||||||
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Expenses: |
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Depreciation and amortization |
23,000 | (1,904 | ) | (2 | ) | 421 | (5 | ) | 21,517 | 4,410 | (8 | ) | 25,927 | |||||||||||||||||||||||
Interest expense |
21,622 | 3,746 | (3 | ) | 400 | (6 | ) | 25,768 | 319 | (9 | ) | 26,087 | ||||||||||||||||||||||||
Loss on extinguishment of debt |
4,067 | 4,067 | 4,067 | |||||||||||||||||||||||||||||||||
Property taxes |
4,956 | 22 | (4 | ) | 4,978 | 1,300 | (7 | ) | 6,278 | |||||||||||||||||||||||||||
Acquisition costs |
47 | 47 | 47 | |||||||||||||||||||||||||||||||||
Independent living facilities |
2,243 | 2,243 | 2,243 | |||||||||||||||||||||||||||||||||
General and administrative |
11,105 | 11,105 | 11,105 | |||||||||||||||||||||||||||||||||
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Total expenses |
67,040 | 1,842 | 843 | 69,725 | 6,029 | 75,754 | ||||||||||||||||||||||||||||||
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Net (loss) income |
$ | (8,143 | ) | $ | 2,930 | $ | 694 | $ | (4,519 | ) | $ | 12,294 | $ | 7,775 | ||||||||||||||||||||||
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(Loss) earnings per share: |
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Basic |
$ | (0.36 | ) | $ | (0.20 | ) | $ | 0.20 | ||||||||||||||||||||||||||||
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Diluted |
$ | (0.36 | ) | $ | (0.20 | ) | $ | 0.20 | ||||||||||||||||||||||||||||
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Weighted-average shares outstanding: |
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Basic |
22,788 | 22,788 | 16,330 | (10 | ) | 39,118 | ||||||||||||||||||||||||||||||
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Diluted |
22,788 | 22,788 | 16,330 | (10 | ) | 39,118 | ||||||||||||||||||||||||||||||
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See accompanying notes to unaudited pro forma consolidated and combined statement of operations.
CARETRUST REIT, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Nine Months Ended September 30, 2015 | ||||||||||||||||||||||||||||
Historical | Pro Forma Adjustments For Recent Acquisitions |
Note | Subtotal | Pro Forma Adjustments For Liberty Acquisition and Offering |
Note | Pro Forma | ||||||||||||||||||||||
Revenues: |
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Rental income |
$ | 45,869 | $ | 757 | (4 | ) | $ | 46,626 | $ | 12,767 | (7 | ) | $ | 59,393 | ||||||||||||||
Tenant reimbursements |
3,866 | 11 | (4 | ) | 3,877 | 975 | (7 | ) | 4,852 | |||||||||||||||||||
Independent living facilities |
1,868 | 1,868 | 1,868 | |||||||||||||||||||||||||
Interest and other income |
716 | 716 | 716 | |||||||||||||||||||||||||
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Total revenue |
52,319 | 768 | 53,087 | 13,742 | 66,829 | |||||||||||||||||||||||
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Expenses: |
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Depreciation and amortization |
17,093 | 210 | (5 | ) | 17,303 | 3,307 | (8 | ) | 20,610 | |||||||||||||||||||
Interest expense |
19,111 | 200 | (6 | ) | 19,311 | 239 | (9 | ) | 19,550 | |||||||||||||||||||
Property taxes |
3,866 | 11 | (4 | ) | 3,877 | 975 | (7 | ) | 4,852 | |||||||||||||||||||
Independent living facilities |
1,778 | 1,778 | 1,778 | |||||||||||||||||||||||||
General and administrative |
5,440 | 5,440 | 5,440 | |||||||||||||||||||||||||
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Total expenses |
47,288 | 421 | 47,709 | 4,521 | 52,230 | |||||||||||||||||||||||
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Net income |
$ | 5,031 | $ | 347 | $ | 5,378 | $ | 9,221 | $ | 14,599 | ||||||||||||||||||
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Earnings per share: |
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Basic |
$ | 0.14 | $ | 0.16 | $ | 0.31 | ||||||||||||||||||||||
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Diluted |
$ | 0.14 | $ | 0.16 | $ | 0.31 | ||||||||||||||||||||||
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Weighted-average shares outstanding: |
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Basic |
33,916 | 33,916 | 13,698 | (10 | ) | 47,614 | ||||||||||||||||||||||
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Diluted |
33,916 | 33,916 | 13,698 | (10 | ) | 47,614 | ||||||||||||||||||||||
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See accompanying notes to unaudited pro forma consolidated and combined statement of operations.
CARETRUST REIT, INC.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(dollars in thousands)
Pro Forma AdjustmentsStatement of Operations
(1) | Reflects the additional amount of rental income from subsidiaries of Ensign that would have been payable to CareTrust pursuant to the Ensign Master Leases (had they been in effect for the period) for properties of Ensign Properties, the predecessor of CareTrust, that were previously leased under intercompany lease agreements. |
(2) | Represents the adjustment to depreciation expense for certain equipment, furniture and fixtures that were not transferred to CareTrust. Depreciation expense for equipment, furniture and fixtures is calculated on a straight-line basis over its estimated useful life, which is generally five years. |
(3) | The pro forma adjustment represents the difference between the pro forma amount based on the below amounts and the historical amount: |
Pro Forma For the Year Ended December 31, 2014 |
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The Notes |
$ | 15,275 | ||
Unused revolving credit facility fee |
750 | |||
Mortgage notes |
5,470 | |||
Amortization of new and existing loan fees |
2,212 | |||
Loss on settlement of interest rate swap |
1,661 | |||
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|
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Interest expense |
$ | 25,368 | ||
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|
The loss on settlement of interest rate swap resulted from the early retirement of the senior secured term loan that was paid off at the Spin-Off.
(4) | Reflects the rental income, tenant reimbursement, and property taxes from the Recent Acquisitions. |
(5) | Reflects depreciation expense on the Recent Acquisitions. Depreciation expense for real estate investments is calculated on a straight-line basis over its estimated useful life, which is generally 40 years. We are in the process of completing the purchase price allocations associated with these acquisitions. Once finalized, the amount of depreciation and amortization expense associated with these assets will be based on the final allocation and established lives. |
(6) | Reflects additional interest due to amounts borrowed to fund the Recent Acquisitions. |
(7) | Reflects the rental income, tenant reimbursement, and property taxes from the Liberty Acquisition. |
(8) | Reflects depreciation expense on the Liberty Acquisition. Depreciation expense for real estate investments is calculated on a straight-line basis over its estimated useful life, which is generally 40 years. We are in the process of completing the purchase price allocations associated with these acquisitions. Once finalized, the amount of depreciation and amortization expense associated with these assets will be based on the final allocation and established lives. |
(9) | Reflects additional interest expense due to amounts borrowed under our credit facility to fund a portion of the Liberty Acquisition. |
(10) | Reflects the additional shares issued on a weighted average basis as a result of the Offering. |
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