8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 2, 2016

CareTrust REIT, Inc.

(Exact name of registrant as specified in its charter)

Maryland	001-36181	46-3999490
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
905 Calle Amanecer, Suite 300, San Clemente, CA		92673
(Address of principal executive offices)		(Zip Code)

Registrant’s 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))

Item 2.02. Results of Operations and Financial Condition.

On November 2, 2016, CareTrust REIT, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 7.01. Regulation FD Disclosure.

A copy of the Company’s supplemental financial information for the third quarter ended September 30, 2016 is attached hereto as Exhibit 99.2 and is incorporated herein by reference. A copy of the supplemental financial information is also available on the “Investors” section of the Company’s website at www.caretrustreit.com.

Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibits	Description
99.1	Press Release of CareTrust REIT, Inc., dated November 2, 2016
99.2	Supplemental financial information for the quarter ended September 30, 2016

SIGNATURES

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: November 2, 2016	CARETRUST REIT, INC.
	By:	/s/ William M. Wagner
		William M. Wagner
		Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

CareTrust REIT, Inc. Announces Third Quarter 2016 Operating Results

Conference Call Scheduled for Thursday, November 3, 2016 at 12:00 pm ET

San Clemente, CA – (Globe Newswire – November 2, 2016) – CareTrust REIT, Inc. (NASDAQ:CTRE) today reported operating results for the third quarter of 2016, as well as other recent events. For the quarter:

• Net income was $0.13, normalized FFO was $0.28 and normalized FAD was $0.30, all per diluted weighted-average common share;

• CareTrust acquired five facilities and initiated two new net-lease tenant relationships;

• The Company made two additional preferred equity investments to develop two skilled nursing facilities, both of which are currently under construction; and

• CareTrust invested approximately $45.9 million (inclusive of transaction costs) at a blended initial cash yield of 9.4%.

Approximately $45.9 Million in New Investments

Discussing the Company’s progress during the quarter, Chairman and Chief Executive Officer Greg Stapley remarked, “We are excited to report the addition of two great operator relationships in key markets, along with the five, well-situated skilled nursing and seniors housing assets they are now operating.” He further reported that CareTrust expanded its existing relationship with tenant Cascadia Healthcare through two preferred equity investments, and that the two new, state-of-the-art skilled nursing facilities being developed thereunder had already begun construction.

Mr. Stapley also reiterated CareTrust’s disciplined growth strategy, saying, “We remain committed to making investments only when we can partner with an experienced, sophisticated and fully-engaged operator who we believe can thrive in all kinds of operating environments.”

1

Financial Results for the Quarter Ended September 30, 2016

Chief Financial Officer Bill Wagner reported that CareTrust generated normalized FFO of $16.3 million or $0.28 per diluted weighted-average common share, and normalized FAD of $17.1 million or $0.30 per diluted weighted-average common share. He added that net income for the quarter was $7.8 million, or $0.13 per diluted weighted-average common share.

Capital Events and Liquidity

Mr. Wagner also discussed the Company’s liquidity, reporting that the Company briefly activated its at-the-market equity issuance program during the quarter, issuing approximately 183,000 shares at an average price per share of $15.61, resulting in gross proceeds of $2.9 million.

He further reported an outstanding balance of $103.0 million under CareTrust’s $400 million unsecured revolving credit facility. He added that CareTrust’s debt-to-run-rate EBITDA ratio was approximately 5.1x, and its debt-to-enterprise value was approximately 35%, each at quarter-end. He also noted that CareTrust continues to have no property-level debt and, taking into account existing extension rights, no debt maturing before 2020.

2016 FFO and FAD Guidance Revised Upward

Mr. Wagner updated CareTrust’s previously-issued 2016 earnings guidance, increasing the low estimate of the previous ranges. CareTrust now projects normalized FFO per diluted weighted-average common share of approximately $1.09 to $1.10, and normalized FAD per diluted weighted-average common share of approximately $1.16 to $1.17. The revised guidance assumes no new acquisitions beyond those made to date, no new debt incurrences or new equity issuances, and no future rent escalations on CareTrust’s long-term leases.

Dividend Declared

During the quarter, CareTrust declared a quarterly dividend of $0.17 per common share. “On an annualized basis, our quarterly dividend represents a FFO payout ratio of approximately 62% based on the midpoint of our 2016 normalized FFO guidance,” said Mr. Wagner. “At this level, our dividend remains among the best-protected of all our industry peers, while giving us ample additional growth capital to reinvest and providing a solid overall return to our shareholders,” he added.

Conference Call

A conference call will be held on Thursday, November 3, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time), during which CareTrust’s management will discuss the Company’s third quarter 2016 results, recent developments and other matters affecting the Company’s business and prospects. The dial-in number for this call is (844) 220-4972 (U.S.) or (317) 973-4053 (International). The conference ID number is 9812123. To listen to the call online, or to view any financial or other statistical information required by SEC Regulation G, please visit the Investors section of the CareTrust website at http://investor.caretrustreit.com. The call will be recorded, and will be available for replay via the website for 30 days following the call

2

About CareTrust^TM

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition and leasing of seniors housing and healthcare-related properties. With 149 net-leased healthcare properties and three operated seniors housing properties in 20 states, CareTrust pursues opportunities across the nation to acquire properties that will be leased to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses. More information about CareTrust is available at www.caretrustreit.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release contains, and the related conference call will include, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding our intent, belief or expectations, including, but not limited to, statements regarding future financial positions, business and acquisition strategies, growth prospects, operating and financial performance, and the performance of our operators and their respective facilities.

Words such as “anticipate,” “believe,” “could,” expect,” “estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,” “would,” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. Our forward-looking statements are based on our current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) the ability to achieve some or all of the expected benefits from the completed spin-off from The Ensign Group, Inc. (“Ensign”); (ii) the ability and willingness of Ensign to meet and/or perform its obligations under the contractual arrangements that it entered into with us in connection with such spin-off, including its triple-net long-term leases with us, and any of its obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the ability and willingness of our tenants to (a) comply with laws, rules and regulations in the operation of the properties we lease to them, and (b) renew their leases with us upon expiration, or in the alternative, (c) our ability to reposition and re-let our properties on the same or better terms in the event of nonrenewal or replacement of an existing tenant and any obligations, including indemnification obligations, that we may incur in replacing an existing tenant; (iv) the availability of, and the ability to identify and acquire, suitable acquisition opportunities and lease the same to reliable tenants on accretive terms; (v) the ability to generate sufficient cash flows to service our outstanding indebtedness; (vi) access to debt and equity capital markets; (vii) fluctuating interest rates; (viii) the ability to retain and properly incentivize key management personnel; (ix) the ability maintain our status as a real estate investment trust (“REIT”); (x) changes in the U.S. tax laws and other state, federal or local laws, whether or not specific to REITs; (xi) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xii) any additional factors identified in our filings with the Securities Exchange Commission (“SEC”), including those in our Annual Report on Form 10-K for the year ended December 31, 2015 under the heading entitled “Risk Factors.”

3

Information in this press release or the related conference call is provided as of September 30, 2016, unless specifically stated otherwise. We expressly disclaim any obligation to update or revise any information in this press release or the related conference call (and replays thereof), including forward-looking statements, whether to reflect any change in our expectations, any change in events, conditions or circumstances, or otherwise.

As used in this press release or the related conference call, unless the context requires otherwise, references to “CTRE,” “CareTrust” or the “Company” refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America.

4

CARETRUST REIT, INC.    

CONSOLIDATED INCOME STATEMENTS    

(in thousands, except per share amounts)    

(unaudited)    

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Revenues:
Rental income	$	24,179	$	15,778	$	67,857	$	45,869
Tenant reimbursements		2,089		1,320		5,815		3,866
Independent living facilities		766		626		2,177		1,868
Interest and other income		72		261		587		716
Total revenues		27,106		17,985		76,436		52,319
Expenses:
Depreciation and amortization		8,248		5,815		23,433		17,093
Interest expense		5,743		7,221		17,370		19,111
Property taxes		2,089		1,320		5,815		3,866
Independent living facilities		708		610		1,926		1,778
Acquisition costs		203		—		203		—
General and administrative		2,283		2,292		6,724		5,440
Total expenses		19,274		17,258		55,471		47,288
Net income	$	7,832	$	727	$	20,965	$	5,031
Earnings per common share:
Basic	$	0.13	$	0.02	$	0.38	$	0.14
Diluted	$	0.13	$	0.02	$	0.38	$	0.14
Weighted average shares outstanding:
Basic		57,595		39,125		54,403		33,916
Diluted		57,595		39,125		54,403		33,916
Dividends declared per common share	$	0.17	$	0.16	$	0.51	$	0.48

5

CARETRUST REIT, INC.    

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)     

(unaudited)     

	Quarter			Quarter
	Ended			Ended
	September 30, 2016			September 30, 2015
Net income	$	7,832		$	727
Depreciation and amortization		8,248			5,815
Interest expense		5,743			7,221
Amortization of stock-based compensation		339			435
EBITDA		22,162			14,198
Acquisition costs		203			—
Normalized EBITDA	$	22,365		$	14,198
Net income	$	7,832		$	727
Real estate related depreciation and amortization		8,223			5,796
Funds from Operations (FFO)		16,055			6,523
Write-off of deferred financing fees		—			1,208
Acquisition costs		203			—
Normalized FFO	$	16,258		$	7,731
Net income	$	7,832		$	727
Real estate related depreciation and amortization		8,223			5,796
Amortization of deferred financing fees		561			547
Amortization of stock-based compensation		339			435
Straight-line rental income		(78	)		—
Funds Available for Distribution (FAD)		16,877			7,505
Write-off of deferred financing fees		—			1,208
Acquisition costs		203			—
Normalized FAD	$	17,080		$	8,713
FFO per share	$	0.28		$	0.17
Normalized FFO per share	$	0.28		$	0.20
FAD per share	$	0.29		$	0.19
Normalized FAD per share	$	0.30		$	0.22
Diluted weighted average shares outstanding [1]		57,739			39,271

[1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method.

6

CARETRUST REIT, INC.    

CONSOLIDATED INCOME STATEMENTS - 5 QUARTER TREND    

(in thousands, except per share amounts)    

(unaudited)    

	Quarter		Quarter		Quarter		Quarter		Quarter
	Ended		Ended		Ended		Ended		Ended
	September 30, 2015		December 31, 2015		March 31, 2016		June 30, 2016		September 30, 2016
Revenues:
Rental income	$	15,778	$	20,110	$	20,897	$	22,781	$	24,179
Tenant reimbursements		1,320		1,631		1,797		1,929		2,089
Independent living facilities		626		642		681		730		766
Interest and other income		261		249		254		261		72
Total revenues		17,985		22,632		23,629		25,701		27,106
Expenses:
Depreciation and amortization		5,815		7,040		7,293		7,892		8,248
Interest expense		7,221		6,145		6,187		5,440		5,743
Property taxes		1,320		1,631		1,797		1,929		2,089
Independent living facilities		610		598		620		598		708
Acquisition costs		—		—		—		—		203
General and administrative		2,292		2,215		2,230		2,211		2,283
Total expenses		17,258		17,629		18,127		18,070		19,274
Net income	$	727	$	5,003	$	5,502	$	7,631	$	7,832
Diluted earnings per share	$	0.02	$	0.10	$	0.11	$	0.13	$	0.13
Diluted weighted average shares outstanding		39,125		47,660		48,101		57,478		57,595

7

CARETRUST REIT, INC.    

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND

(in thousands, except per share amounts)     

(unaudited)     

	Quarter		Quarter		Quarter		Quarter		Quarter
	Ended		Ended		Ended		Ended		Ended
	September 30, 2015		December 31, 2015		March 31, 2016		June 30, 2016		September 30, 2016
Net income	$	727	$	5,003	$	5,502	$	7,631	$	7,832
Depreciation and amortization		5,815		7,040		7,293		7,892		8,248
Interest expense		7,221		6,145		6,187		5,440		5,743
Amortization of stock-based compensation		435		427		431		437		339
EBITDA		14,198		18,615		19,413		21,400		22,162
Acquisition costs		—		—		—		—		203
Normalized EBITDA	$	14,198	$	18,615	$	19,413	$	21,400	$	22,365
Net income	$	727	$	5,003	$	5,502	$	7,631	$	7,832
Real estate related depreciation and amortization		5,796		7,018		7,270		7,867		8,223
Funds from Operations (FFO)		6,523		12,021		12,772		15,498		16,055
Write-off of deferred financing fees		1,208		—		326		—		—
Acquisition costs		—		—		—		—		203
Normalized FFO	$	7,731	$	12,021	$	13,098	$	15,498	$	16,258
Net income	$	727	$	5,003	$	5,502	$	7,631	$	7,832
Real estate related depreciation and amortization		5,796		7,018		7,270		7,867		8,223
Amortization of deferred financing fees		547		551		556		561		561
Amortization of stock-based compensation		435		427		431		437		339
Straight-line rental income		—		—		—		—		(78	)
Funds Available for Distribution (FAD)		7,505		12,999		13,759		16,496		16,877
Write-off of deferred financing fees		1,208		—		326		—		—
Acquisition costs		—		—		—		—		203
Normalized FAD	$	8,713	$	12,999	$	14,085	$	16,496	$	17,080
FFO per share	$	0.17	$	0.25	$	0.26	$	0.27	$	0.28
Normalized FFO per share	$	0.20	$	0.25	$	0.27	$	0.27	$	0.28
FAD per share	$	0.19	$	0.27	$	0.29	$	0.29	$	0.29
Normalized FAD per share	$	0.22	$	0.27	$	0.29	$	0.29	$	0.30
Diluted weighted average shares outstanding [1]		39,271		47,802		48,258		57,667		57,739

[1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method.

8

CARETRUST REIT, INC.    

CONSOLIDATED BALANCE SHEETS    

(in thousands)    

(unaudited)    

	September 30,			December 31,
	2016			2015
Assets
Real estate investments, net	$	809,121		$	645,614
Other real estate investments		13,595			8,477
Cash and cash equivalents		11,878			11,467
Accounts receivable		5,666			2,342
Prepaid expenses and other assets		1,755			2,083
Deferred financing costs, net		3,074			3,183
Total assets	$	845,089		$	673,166
Liabilities and Equity
Senior unsecured notes payable, net	$	255,028		$	254,229
Senior unsecured term loan, net		99,398			—
Unsecured revolving credit facility		103,000			45,000
Mortgage notes payable, net		—			94,676
Accounts payable and accrued liabilities		15,015			9,269
Dividends payable		9,873			7,704
Total liabilities		482,314			410,878
Equity:
Common stock		577			477
Additional paid-in capital		519,204			410,217
Cumulative distributions in excess of earnings		(157,006	)		(148,406	)
Total equity		362,775			262,288
Total liabilities and equity	$	845,089		$	673,166

9

CARETRUST REIT, INC.    

CONSOLIDATED STATEMENTS OF CASH FLOWS    

(in thousands)    

(unaudited)    

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net income	$	20,965		$	5,031
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including a below-market ground lease)		23,444			17,093
Amortization of deferred financing costs		1,678			1,649
Write-off of deferred financing costs		326			1,208
Amortization of stock-based compensation		1,207			1,095
Straight-line rental income		(78	)		—
Non cash interest income		(587	)		(697	)
Change in operating assets and liabilities:
Accounts receivable		(3,246	)		(2,945	)
Accounts receivable due from related party		—			2,275
Prepaid expenses and other assets		3			(90	)
Accounts payable and accrued liabilities		5,801			4,416
Net cash provided by operating activities		49,513			29,035
Cash flows from investing activities:
Acquisitions of real estate		(185,284	)		(231,501	)
Improvements to real estate		(258	)		(143	)
Purchases of equipment, furniture and fixtures		(139	)		(256	)
Preferred equity investments		(4,531	)		—
Escrow deposit for acquisition of real estate		(1,000	)		—
Net proceeds from sale of vacant land		—			30
Net cash used in investing activities		(191,212	)		(231,870	)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net		108,395			163,466
Proceeds from the issuance of senior unsecured term loan		100,000			—
Borrowings under unsecured revolving credit facility		150,000			45,000
Payments on unsecured revolving credit facility		( 92,000	)		—
Borrowings under senior secured revolving credit facility		—			35,000
Repayments of borrowings under senior secured revolving credit facility		—			(35,000	)
Payments on the mortgage notes payable		(95,022	)		(2,509	)
Payments of deferred financing costs		(1,352	)		(2,113	)
Net-settle adjustment on restricted stock		(515	)		(145	)
Dividends paid on common stock		(27,396	)		(14,086	)
Net cash provided by financing activities		142,110			189,613
Net increase (decrease) in cash and cash equivalents		411			(13,222	)
Cash and cash equivalents beginning of period		11,467			25,320
Cash and cash equivalents end of period	$	11,878		$	12,098

10

CARETRUST REIT, INC.    

DEBT SUMMARY    

(dollars in thousands)    

(unaudited)    

						September 30, 2016
	Interest			Maturity				% of			Deferred			Net Carrying
Debt	Rate			Date		Principal		Principal			Loan Costs			Value
Fixed Rate Debt
Senior unsecured notes payable		5.875	%		2021	$	260,000		56.2	%	$	(4,972	)	$	255,028
Floating Rate Debt
Senior unsecured term loan [1]		2.574	%		2023		100,000		21.6	%		(602	)		99,398
Unsecured revolving credit facility [2]		2.374	%		2019		103,000		22.2	%		—	[3]		103,000
		2.473	%				203,000		43.8	%		(602	)		202,398
Total Debt		4.383	%			$	463,000		100.0	%	$	(5,574	)	$	457,426

[1] Funds can be borrowed at applicable LIBOR plus 1.95% to 2.60% or at the Base Rate (as defined) plus 0.95% to 1.6%.

[2] Funds can be borrowed at applicable LIBOR plus 1.75% to 2.40% or the Base Rate (as defined) plus 0.75% to 1.4%.

[3] Deferred financing fees are not shown net for the unsecured revolving credit facility and are included in assets on the balance sheet.

11

CARETRUST REIT, INC.    

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES    

(shares in thousands)     

(unaudited)     

2016 Guidance     

	Low		High
Net income	$	0.51	$	0.52
Real estate related depreciation and amortization		0.57		0.57
Funds from Operations (FFO)		1.08		1.09
Acquisition costs		0.00		0.00
Write-off of deferred financing fees		0.01		0.01
Normalized FFO	$	1.09	$	1.10
Net income	$	0.51	$	0.52
Real estate related depreciation and amortization		0.57		0.57
Amortization of deferred financing fees		0.04		0.04
Amortization of stock-based compensation		0.03		0.03
Straight-line rental income		0.00		0.00
Funds Available for Distribution (FAD)		1.15		1.16
Acquisition costs		0.00		0.00
Write-off of deferred financing fees		0.01		0.01
Normalized FAD	$	1.16	$	1.17
Weighted average shares outstanding:
Diluted		55,443		55,443

12

Non-GAAP Financial Measures

EBITDA represents net income before interest expense, amortization of deferred financing costs and stock-based compensation, and depreciation and amortization. Normalized EBITDA represents EBITDA as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of core operating performance, such as costs associated with the spin-off, impairments, and gains or losses on the sale of real estate. EBITDA and Normalized EBITDA do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. EBITDA and Normalized EBITDA do not purport to be indicative of cash available to fund future cash requirements, including the Company’s ability to fund capital expenditures or make payments on its indebtedness. Further, the Company’s computation of EBITDA and Normalized EBITDA may not be comparable to EBITDA and Normalized EBITDA reported by other REITs.

Funds from Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), and Funds Available for Distribution (“FAD”) are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP.

13

FFO is defined by NAREIT as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, real estate depreciation and amortization and impairment charges, and adjustments for unconsolidated partnerships and joint ventures. The Company computes FFO in accordance with NAREIT’s definition.

FAD is defined as FFO excluding non-cash expenses, such as stock-based compensation expense, amortization of deferred financing costs and the effects of straight-line rent. The Company considers FAD to be a useful supplemental measure to evaluate the Company’s operating results excluding these expense items to help investors, analysts and other interested parties compare the operating performance of the Company between periods or as compared to other companies on a more consistent basis.

In addition, the Company reports normalized FFO and normalized FAD, which adjust FFO and FAD for certain revenue and expense items that the Company does not believe are indicative of its ongoing operating results, such as costs associated with the spin-off and other unanticipated charges. By excluding these items, investors, analysts and our management can compare normalized FFO and normalized FAD between periods more consistently.

While FFO, normalized FFO, FAD and normalized FAD are relevant and widely-used measures of operating performance among REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO, normalized FFO, FAD and normalized FAD do not purport to be indicative of cash available to fund future cash requirements.

Further, the Company’s computation of FFO, normalized FFO, FAD and normalized FAD may not be comparable to FFO, normalized FFO, FAD and normalized FAD reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define FAD differently than the Company does.

The Company believes that the use of EBITDA, Normalized EBITDA, FFO, normalized FFO, FAD and normalized FAD, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful. The Company considers EBITDA and Normalized EBITDA useful in understanding the Company’s operating results independent of its capital structure and indebtedness, thereby allowing for a more meaningful comparison of operating performance between periods and against other REITs. The Company considers FFO, normalized FFO, FAD and normalized FAD to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses from real estate dispositions, impairment charges and real estate depreciation and amortization, and, for FAD and normalized FAD, by excluding non-cash expenses such as stock-based compensation expense and amortization of deferred financing costs, FFO, normalized FFO, FAD and normalized FAD can help investors compare the Company’s operating performance between periods and to other REITs.

Contact Information

CareTrust REIT, Inc.

(949) 542-3130

ir@caretrustreit.com

SOURCE: CareTrust REIT, Inc.

14

EX-99.2

CARETRUST REIT, INC. THIRD QUARTER 2016 FINANCIAL SUPPLEMENT INVESTING IN THE FUTURE OF HEALTHCARE Willowbend Nursing and Rehabilitation Center (Mesquite, TX) Timberwood Nursing and Rehabilitation Center (Livingston, TX) New Haven Assisted Living (San Angelo, TX) The Pines of Burton (Burton, MI) Exhibit 99.2

INVESTING IN THE FUTURE OF HEALTHCARE Welcome to CareTrust We are pleased to present you with our inaugural financial supplement. As a relatively young company, we are proud of the disciplined growth pattern we are establishing, and the exceptional operator roster and real estate portfolio this discipline has produced to date.   This first supplement endeavors to provide our shareholders and friends with additional color on our tenant base, investment strategy, financial performance and overall progress. With almost half of our revenues coming from assets which have been in the portfolio for less than two years, some of the historical data presented here is still in the early stages of development. We accordingly expect that the content and format of this supplement will evolve, expand and become more useful in coming quarters. We invite your input as we continue to grow, and welcome all comments that might make our future supplements more helpful to you.   We are excited about the futures of CareTrust, the industries we support, and especially the outstanding healthcare providers with whom we have associated. We appreciate your continued interest in the Company, and look forward to generating superior shareholder value as we leverage our real estate and healthcare operating experience to invest in the future of healthcare.    Sincerely, The CareTrust Management Team   Greg Stapley Bill Wagner Dave Sedgwick Mark Lamb Chief Executive Officer Chief Financial OfficerVice President Operations Director of Investments

INVESTING IN THE FUTURE OF HEALTHCARE Disclaimers This supplement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding our intent, belief or expectations, including, but not limited to, statements regarding future financial positions, business and acquisition strategies, growth prospects, operating and financial performance, and the performance of our operators and their respective facilities. Words such as "anticipate," "believe," "could," expect," "estimate," "intend," "may," "plan," "seek," "should," "will," "would," and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. Our forward-looking statements are based on our current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects, or which could cause actual results to differ materially from expectations include but are not limited to: (i) the ability to achieve some or all of the expected benefits from the completed spin-off from The Ensign Group, Inc. ("Ensign"); (ii) the ability and willingness of Ensign to meet and/or perform its obligations under the contractual arrangements that it entered into with us in connection with such spin-off, including its triple-net long-term leases with us, and any of its obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the ability and willingness of our tenants to (a) comply with laws, rules and regulations in the operation of the properties we lease to them, and (b) renew their leases with us upon expiration, or in the alternative, (c) our ability to reposition and re-let our properties on the same or better terms in the event of nonrenewal or replacement of an existing tenant and any obligations, including indemnification obligations, that we may incur in replacing an existing tenant; (iv) the availability of, and the ability to identify and acquire, suitable acquisition opportunities and lease the same to reliable tenants on accretive terms; (v) the ability to generate sufficient cash flows to service our outstanding indebtedness; (vi) access to debt and equity capital markets; (vii) fluctuating interest rates; (viii) the ability to retain and properly incentivize key management personnel; (ix) the ability maintain our status as a real estate investment trust ("REIT"); (x) changes in the U.S. tax laws and other state, federal or local laws, whether or not specific to REITs; (xi) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xii) any additional factors identified in our filings with the Securities Exchange Commission (“SEC”), including those in our Annual Report on Form 10-K for the year ended December 31, 2015 under the heading entitled "Risk Factors." This supplement contains certain non-GAAP financial information relating to CareTrust including EBITDA, Normalized EBITDA, FFO, Normalized FFO, FAD, Normalized FAD, and certain related ratios. Explanatory footnotes and a glossary explaining this non-GAAP information are included in this supplement. Reconciliations of these non-GAAP measures are also included in this supplement. Other financial information, including GAAP financial information, is also available on our website. Non-GAAP financial information does not represent financial performance under GAAP and should not be considered in insolation, as a measure of liquidity, as an alternative to net income, or as an indicator of any other performance measure determined in accordance with GAAP. You should not rely on non-GAAP financial information as a substitute for GAAP financial information, and should recognize that non-GAAP information presented herein may not compare to similarly-termed non-GAAP information of other companies (i.e., because they do not use the same definitions for determining any such non-GAAP information). This supplement also includes certain information regarding operators of our properties (such as EBITDARM Coverage, EBITDAR Coverage, and Reported Occupancy), most of which are not subject to audit or SEC reporting requirements. The operator information provided in this supplement has been provided by the operators. We have not independently verified this information, but have no reason to believe that such information is inaccurate in any material respect. We are providing this information for informational purposes only. Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at Ensign’s website http://www.ensigngroup.net. Audited financial statements of Pristine for 2015 are available in Amendment No. 1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 16, 2016. Information in this supplement is provided as of September 30, 2016, unless specifically stated otherwise. We expressly disclaim any obligation to update or revise any information in this supplement (including forward-looking statements), whether to reflect any change in our expectations, any change in events, conditions or circumstances, or otherwise. As used in this supplement, unless the context otherwise requires, references to “CTRE,” “CareTrust” or the “Company” refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America.

INVESTING IN THE FUTURE OF HEALTHCARE Company Profile Table of Contents CareTrust is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition and leasing of seniors housing and healthcare-related properties. CareTrust generates revenues primarily by leasing properties to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses. Since its debut as a standalone public company on June 1, 2014, CareTrust has expanded its tenant roster to 15 operators, and has grown its portfolio real estate portfolio to 149 net-leased healthcare properties and three operated seniors housing properties across 20 states, consisting of 14,568 beds/units in the aggregate. Management Greg Stapley Chairman and Chief Executive Officer Bill Wagner Chief Financial Officer Dave Sedgwick Vice President of Operations Mark Lamb Director of Investments Contact Information CareTrust REIT, Inc. 905 Calle Amanecer, Suite 300 San Clemente, CA 92673 (949) 542-3130 | ir@caretrustreit.com www.caretrustreit.com Transfer Agent Broadridge Corporate Issuer Solutions P.O. Box 1342 Brentwood, NY 11717 (800) 733-1121 | shareholder@broadridge.com Board of Directors Greg Stapley Chairman Jon Kline Audit Committee Chairman David Lindahl Compensation Committee Chairman Allen Barbieri Nominating & Corporate Governance Committee Chairman KeyBanc Capital Markets Jordan Sadler | (917) 318-2280 Raymond James Jonathan Hughes | (727) 567-2438 Wells Fargo Securities Todd Stender | (562) 637-1371 RBC Capital Markets Michael Carroll | (440) 715-2649 Stifel, Nicolaus & Company Chad Vanacore | (518) 587-2581 BMO Capital Markets John Kim | (212) 885-4115 Canaccord Genuity Paul Morgan | (415) 229-7181 Barclays Joshua R. Raskin, CFA | (212) 526-2279 Stephens Dana Hambly, CFA | (615) 279-4329 JMP Research Peter L. Martin | (415) 835-8904 Analyst Coverage Company Profile 4 CareTrust at a Glance 5 Post-Spin Investments 6 Portfolio Overview Portfolio Performance 7 Tenant Summary 8 Rent Diversification by Tenant 9 Geographic Diversification 10 Rent Diversification by State 11 Lease Maturities 12 Financial Overview Consolidated Income Statements 14 Reconciliation of EBITDA, FFO and FAD 15 Consolidated Balance Sheets 16 Key Debt Metrics 17 Debt Summary 18 FY 2016 Guidance Update 19 Equity Capital Transactions 20 Other Financial Highlights 21 Glossary 22

INVESTING IN THE FUTURE OF HEALTHCARE At a Glance 15 Operators 14,304 Operating Beds/Units 20 States 149 Properties $953.0M Investments Notes: Amounts are as of September 30, 2016 and exclude our three operated seniors housing properties and our three preferred equity investments. Credit Ratings S&P Corporate Rating: B+ (stable) Senior Unsecured Notes: BB- Moody’s Corporate Rating: B1 (stable) Senior Unsecured Notes: B1 CareTrust REIT, Inc. NASDAQ: CTRE Market Data (as of September 30, 2016) Closing Price: $14.78 52 Week Range: $15.85 – $9.70 Market Cap: $858.4M Enterprise Value: $1,321M Outstanding Shares: 58.1M Annualized Rent $97.7M

INVESTING IN THE FUTURE OF HEALTHCARE Post-Spin Investments Notes: [1] Initial Investment represents purchase price and transaction costs. [2] Initial Operating Beds/Units as of the acquisition date. [3] Total Cost per Bed/Unit excludes preferred equity investments. [4] Initial Rent represents the annualized acquisition-date base rent or deferred interest income on preferred equity investments. [5] Initial Yield represents Initial Rent divided by Initial Investment. [6] Premier Senior Living’s Initial Rent excludes a first-year rent concession of $202K. There are no other rent concessions under the 15-year lease term. (dollars in thousands) Date Operator Property Type Location Facilities Initial Investment [1] Operating Beds/Units [2] Cost per Bed/Unit [3] Initial Rent [4] Initial Yield [5] 2014 Investments 6 33,609 $ 157 166 $ 3,076 $ 9.2% 2015 Investments 20 233,028 1,840 127 22,263 9.6% 02/01/16 Trillium Healthcare Group SNF IA 9 32,696 518 63 3,161 9.7% 02/01/16 New Haven ALF TX 1 4,909 30 164 404 8.2% 03/01/16 Priority Life Care ALF IN, WI, MD 3 21,157 366 58 1,756 8.3% 03/01/16 Better Senior Living Consulting ALF FL 1 5,684 74 77 548 9.6% 03/31/16 Trillium Healthcare Group SNF IA 1 4,980 71 70 483 9.7% 04/01/16 Pristine Senior Living SNF, Campus OH 2 15,172 214 71 1,406 9.3% 05/02/16 Premier Senior Living ALF NC 2 11,801 67 176 1,028 8.7% 05/02/16 Twenty/20 Management ALF/ILF VA 1 10,063 175 58 854 8.5% 05/02/16 Cascadia Healthcare SNF ID 1 8,926 98 91 854 9.6% 06/01/16 Premier Senior Living ALF MI 4 30,652 188 163 2,745 9.0% 07/22/16 Cascadia Healthcare Preferred Equity ID 1 2,269 N/A N/A 264 11.7% 08/01/16 West Harbor Healthcare SNF CA 1 6,880 59 117 670 9.7% 08/05/16 Covenant Care SNF, ALF CA 4 34,350 372 92 3,081 9.0% 09/21/16 Cascadia Healthcare Preferred Equity ID 1 2,392 N/A N/A 279 11.7% 2016 Year to Date Investments 32 191,932 2,232 84 17,534 9.1% Total Post Spin-off Investments 58 458,569 $ 4,229 106 $ 42,873 $ 9.3% [6]

Portfolio Performance INVESTING IN THE FUTURE OF HEALTHCARE Lamplight Inn of Baltimore (Baltimore, MD) Croatan Village (New Bern, NC) Littleton Care and Rehabilitation Center (Littleton, CO) North Mountain Medical & Rehabilitation Center (Phoenix, AZ) (dollars in thousands) Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. Investment for post-spin properties represents CareTrust’s cumulative capital investment. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [2] Rent represents September 2016 rent, annualized. [3] Current Yield represents Rent divided by Investment. [4] All amounts exclude our three operated seniors housing properties and our three preferred equity investments. See “Glossary” for additional information. Summary by Asset Type Facilities Operating Beds/Units Investment [1] % of Total Investment Rent [2] % of Total Rent Current Yield [3] EBITDARM Coverage EBITDAR Coverage Reported Occupancy Seniors Housing 33 2,750 179,653 $ 18.9% 17,272 $ 17.7% 9.6% 1.63x 1.39x 86.6% Skilled Nursing 102 9,716 644,072 67.6% 67,820 69.4% 10.5% 2.44x 1.87x 76.9% Skilled Nursing Campus 14 1,838 129,251 13.6% 12,629 12.9% 9.8% 2.19x 1.75x 76.6% Total Net-Leased Assets [4] 149 14,304 952,976 $ 100.0% 97,721 $ 100.0% 10.3% 2.26x 1.77x 78.7% For the applicable period ended June 30, 2016 As of September 30, 2016

INVESTING IN THE FUTURE OF HEALTHCARE Tenant Summary The Ensign Group (NASDAQ: ENSG) is a publicly-traded, nationwide operator of 209 skilled nursing and assisted living facilities, 94 of which are owned by CTRE. In addition to being a blue-chip operator, Ensign also operates 17 hospice agencies, 17 home health agencies, three home care businesses, and 14 urgent care clinics. www.ensigngroup.com Covenant Care is a privately-held, California-based healthcare company which operates 52 skilled nursing and four residential care facilities across seven states, four of which are owned by CTRE. www.covenantcare.com Pristine Senior Living is a privately-held, Indiana-based operator of over 1,500 beds across 17 seniors housing and skilled nursing facilities throughout OH, 16 of which are owned by CTRE. www.pristinesenior.com Trillium Healthcare Group is a privately-held Florida-based post-acute healthcare company which operates 31 post-acute and seniors housing facilities in IA, NE, FL, and GA, 11 of which are owned by CTRE. www.trilliumhcg.com Premier Senior Living Group, LLC is a privately-held, New York-based assisted living and memory care operator with 17 facilities in NY, FL, MI, NC, and OH, six of which are owned by CTRE. www.pslgroupllc.com Top Five Tenants by Rent Rent Concentration September 30, 2016 December 31, 2015 December 31, 2014

Rent Diversification by Tenant INVESTING IN THE FUTURE OF HEALTHCARE Notes: Underwriting DARMx and DARx apply for Tenants with less than 12 months operational data Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. Investment for post-spin properties represents CareTrust’s cumulative capital investment. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [2] Rent represents September 2016 rent, annualized. [3] Investment for pre-spin properties represents Ensign's gross book value. [4] All amounts exclude our three operated seniors housing properties and our three preferred equity investments. (dollars in thousands)

Geographic Diversification 1 ALF 7 SNFs 1 ALF 2 ALFs 1 ALFs 9 SNFs 1 Campus 3 ALFs 22 SNFs 1 Campus 12 SNFs 4 Campuses 2 ALFs 1 SNF 2 ALFs 7 SNFs 1 Campus 4 ALFs 17 SNFs 2 Campuses 2 ALFs 4 SNFs 3 ALFs 1 SNF 13 SNFs 2 Campuses 3 ALFs 6 SNFs 1 Campus 1 ALF 1 ALF 3 SNFs 2 Campuses 1 ALF INVESTING IN THE FUTURE OF HEALTHCARE 2 ALFs 4 ALFs 149 Properties 20 States Rent 15 Operators Notes: Amounts are as of September 30, 2016 and exclude our three operated seniors housing properties and our three preferred equity investments. Top Five States Beds/Units Investment

Rent Diversification by State INVESTING IN THE FUTURE OF HEALTHCARE Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. For post-spin properties, Investment represents CareTrust’s cumulative capital investment. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [2] Rent represents September 2016 rent, annualized. [3] All amounts exclude our three operated seniors housing properties and our three preferred equity investments. (dollars in thousands)

Lease Maturities INVESTING IN THE FUTURE OF HEALTHCARE Lease Maturity Year Desert Springs Senior Living (Las Vegas, NV) % of Rent Notes: [1] Lease Maturity Year represents the scheduled expiration year of the primary term of the lease and does not include tenant extension options, if any. [2] Investment for pre-spin properties represents Ensign's gross book value. For post-spin properties, Investment represents CareTrust’s cumulative capital investment, excluding our three operated seniors housing properties and our three preferred equity investments. Capital investment includes purchase price, transaction costs and capital expenditures, if any. [3] Rent represents September 2016 rent, annualized. (dollars in thousands)

Financial Overview Orem Rehabilitation and Nursing Center (Orem, UT)

Consolidated Income Statements (amounts in thousands, except per share data) INVESTING IN THE FUTURE OF HEALTHCARE 2016 2015 2016 2015 Revenues: Rental income $ 24,179 $ 15,778 $ 67,857 $ 45,869 Tenant reimbursements 2,089 1,320 5,815 3,866 Independent living facilities 766 626 2,177 1,868 Interest and other income 72 261 587 716 Total revenues 27,106 17,985 76,436 52,319 Expenses: Depreciation and amortization 8,248 5,815 23,433 17,093 Interest expense 5,743 7,221 17,370 19,111 Property taxes 2,089 1,320 5,815 3,866 Independent living facilities 708 610 1,926 1,778 Acquisition costs 203 - 203 - General and administrative 2,283 2,292 6,724 5,440 Total expenses 19,274 17,258 55,471 47,288 Net income 7,832 $ 727 $ 20,965 $ 5,031 $ Earnings per common share: Basic $ 0.13 $ 0.02 $ 0.38 $ 0.14 Diluted $ 0.13 $ 0.02 $ 0.38 $ 0.14 Weighted average shares outstanding: Basic 57,595 39,125 54,403 33,916 Diluted 57,595 39,125 54,403 33,916 Dividends declared per common share $ 0.17 $ 0.16 $ 0.51 $ 0.48 Nine Months Ended September 30, Three Months Ended September 30,

Reconciliation of EBITDA, FFO and FAD INVESTING IN THE FUTURE OF HEALTHCARE (amounts in thousands, except per share data) [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. See “Glossary” for additional information. Quarter Quarter Ended Ended September 30, 2016 September 30, 2015 Net income $ 7,832 $ 727 Depreciation and amortization 8,248 5,815 Interest expense 5,743 7,221 Amortization of stock-based compensation 339 435 EBITDA 22,162 14,198 Acquisition costs 203 - Normalized EBITDA $ 22,365 $ 14,198 Net income $ 7,832 $ 727 Real estate related depreciation and amortization 8,223 5,796 Funds from Operations (FFO) 16,055 6,523 Write-off of deferred financing fees - 1,208 Acquisition costs 203 - Normalized FFO $ 16,258 $ 7,731 Net income $ 7,832 $ 727 Real estate related depreciation and amortization 8,223 5,796 Amortization of deferred financing fees 561 547 Amortization of stock-based compensation 339 435 Straight-line rental income (78) - Funds Available for Distribution (FAD) 16,877 7,505 Write-off of deferred financing fees - 1,208 Acquisition costs 203 - Normalized FAD $ 17,080 $ 8,713 FFO per share $ 0.28 $ 0.17 Normalized FFO per share $ 0.28 $ 0.20 FAD per share $ 0.29 $ 0.19 Normalized FAD per share $ 0.30 $ 0.22 Diluted weighted average shares outstanding[1] 57,739 39,271

Consolidated Balance Sheets (dollars in thousands) INVESTING IN THE FUTURE OF HEALTHCARE

INVESTING IN THE FUTURE OF HEALTHCARE Key Debt Metrics Debt to EBITDA[1] Debt to Enterprise Value[2] [1] Debt to EBITDA compares total debt as of the last day of the quarter to the annualized EBITDA for the quarter. [2] Debt to Enterprise Value compares total debt as of the last day of the quarter to CareTrust’s Enterprise Value as of the last day of the quarter. See “Glossary” for additional information. English Meadows Elks Home Campus (Bedford, VA) Southland Rehabilitation and Healthcare Center (Norwalk, CA) Lake Ridge Senior Living (Orem, UT)

Debt Summary INVESTING IN THE FUTURE OF HEALTHCARE (dollars in thousands) Notes: [1] Funds can be borrowed at applicable LIBOR plus 1.95% to 2.60% or at the Base Rate (as defined) plus 0.95% to 1.6%. [2] Funds can be borrowed at applicable LIBOR plus 1.75% to 2.40% or the Base Rate (as defined) plus 0.75% to 1.4%. [3] Deferred financing fees are not shown net for the unsecured revolving credit facility and are included in assets on the balance sheet.

FY 2016 Guidance Update INVESTING IN THE FUTURE OF HEALTHCARE (shares in thousands) See “Glossary” for additional information.

INVESTING IN THE FUTURE OF HEALTHCARE Equity Capital Transactions Follow-On Equity Offering Activity At-the-Market Offering Activity

Other Financial Highlights Dividend History Normalized FFO Payout Ratio[1] 21 Normalized FFO per Share Notes: [1] Normalized FFO Payout Ratio represents dividends paid divided by normalized FFO, in each case for the applicable quarter. See “Glossary” for additional information. INVESTING IN THE FUTURE OF HEALTHCARE Park Manor Rehabilitation Center (Walla Walla, WA)

Glossary INVESTING IN THE FUTURE OF HEALTHCARE Assisted Living Facilities (“ALFs”) Licensed healthcare facilities that provide personal care services, support and housing for those who need help with daily living activities, such as bathing, eating and dressing, yet require limited medical care. The programs and services may include transportation, social activities, exercise and fitness programs, beauty or barber shop access, hobby and craft activities, community excursions, meals in a dining room setting and other activities sought by residents. These facilities are often in apartment-like buildings with private residences ranging from single rooms to large apartments. Certain ALFs may offer higher levels of personal assistance for residents requiring memory care as a result of Alzheimer’s disease or other forms of dementia. Levels of personal assistance are based in part on local regulations.  EBITDA Net income before interest expense, income tax, depreciation and amortization and amortization of stock-based compensation. EBITDAR Net income before interest expense, income tax, depreciation, amortization and rent, after applying a standardized management fee (5% of facility operating revenues). EBITDAR Coverage Aggregate EBITDAR produced by all facilities under a master lease (or other grouping) divided by the base rent payable to CareTrust under such master lease (or other grouping) for the same period. For this supplement, the reported period is the trailing twelve-month period ended June 30, 2016. Notwithstanding the foregoing, for any facility for which CareTrust has not received four consecutive quarters of post-acquisition operating reports, the quarterly EBITDAR used in this calculation is the proforma EBITDAR utilized in CareTrust’s underwriting process, annualized. Beginning with the fifth quarter of reported post-acquisition operating performance, each reported quarter EBITDAR replaces the oldest underwriting proforma quarter EBITDAR, until all previously-used proforma quarters EBITDAR amounts are eliminated from the calculation. EBITDARM Earnings before interest expense, income tax, depreciation, amortization, rent, and a standardized management fee (5% of facility operating revenues). EBITDARM Coverage Aggregate EBITDARM produced by all facilities under a master lease (or other grouping) divided by the base rent payable to CareTrust under such master lease (or other grouping) for the same period. For this supplement, the reported period is the trailing twelve-month period ended June 30, 2016. Notwithstanding the foregoing, for any facility for which CareTrust has not received four consecutive quarters of post-acquisition operating reports, the quarterly EBITDARM used in this calculation is the proforma EBITDARM utilized in CareTrust’s underwriting process annualized. Beginning with the fifth quarter of reported post-acquisition operating performance, each reported quarter EBITDARM replaces the oldest underwriting proforma quarter EBITDARM, until all previously-used proforma quarters EBITDARM amounts are eliminated from the calculation. Enterprise Value Share price multiplied by the number of outstanding shares plus total outstanding debt, each as of a specified date. Funds Available for Distribution (“FAD”) FFO, excluding straight-line rental income adjustments and amortization of deferred financing fees and stock-based compensation expense.[1] Funds from Operations (“FFO”) Net income, excluding gains and losses from real estate dispositions, before real estate depreciation and amortization and real estate impairment charges. CareTrust calculates and reports FFO in accordance with the definition and interpretive guidelines issued by the National Association of Real Estate Investment Trusts.[1]

INVESTING IN THE FUTURE OF HEALTHCARE Independent Living Facilities (“ILFs”) Also known as retirement communities or senior apartments, ILFs are not healthcare facilities. ILFs typically consist of entirely self-contained apartments, complete with their own kitchens, baths and individual living spaces, as well as parking for tenant vehicles. They are most often rented unfurnished, and generally can be personalized by the tenants, typically an individual or a couple over the age of 55. These facilities offer various services and amenities such as laundry, housekeeping, dining options/meal plans, exercise and wellness programs, transportation, social, cultural and recreational activities, and on-site security. Normalized EBITDA EBITDA, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, such as certain acquisition costs. Normalized FAD FAD, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, such as written-off deferred financing fees and certain acquisition costs.[1] Normalized FFO FFO, adjusted for certain income and expense items the Company does not believe are indicative of its ongoing results, such as written-off deferred financing fees and certain acquisition costs.[1] Reported Occupancy A facility’s occupied operating beds/units divided by the total available operating beds/units for that facility, in each case for the quarter ended June 30, 2016; provided that Reported Occupancy for any facility acquired during such quarter may be normalized. Seniors Housing Includes ALFs, ILFs, dedicated memory care facilities and similar facilities. Skilled Nursing Campus Facilities that include a combination of Skilled Nursing beds and Seniors Housing units. Skilled Nursing or Skilled Nursing Facilities (“SNFs”) Licensed healthcare facilities that provide restorative, rehabilitative and nursing care for people not requiring the more extensive and sophisticated treatment available at an acute care hospital or long-term acute care hospital. Treatment programs include physical, occupational, speech, respiratory, ventilator, and wound therapy. Notes: [1] CareTrust believes FAD, FFO, Normalized FAD, and Normalized FFO (and their related per-share amounts) are important non-GAAP supplemental measures of its operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time, even though real estate values have historically risen or fallen with market and other conditions. Moreover, by excluding items not indicative of ongoing results, Normalized FAD and Normalized FFO can facilitate meaningful comparisons of operating performance between periods and between other companies. However, FAD, FFO, Normalized FAD, and Normalized FFO (and their per-share amounts) do not represent cash flows from operations or net income attributable to shareholders as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. Glossary

CareTrust REIT, Inc. 905 Calle Amanecer, Suite 300 San Clemente, CA 92673 NASDAQ: CTRE www.caretrustreit.com Julia Temple Healthcare Center, Englewood, CO INVESTING IN THE FUTURE OF HEALTHCARE