CareTrust REIT, Inc

Capital structure and performance · Dividend policy and capital allocation

We cannot assure you of our ability to pay dividends in the future. We expect to make quarterly dividend payments in cash with the annual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.

Credit and liquidity · Liquidity and cash flow constraints

We may be unable to service our indebtedness. Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our future financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control.

International and currency · Foreign exchange and currency exposure

We will be subject to additional risks from our investment in Care REIT and any other international investments. International investment may expose us to a variety of risks that are different from and in addition to those commonly found in our current markets, including fluctuations in exchange rates between foreign currencies and the U.S. dollar and exchange controls.

International and currency · International operations and emerging markets

The intended benefits of the Care REIT acquisition may not be realized. On May 8, 2025, we closed our acquisition of Care REIT by means of a court-sanctioned scheme of arrangement under Part 26 of the United Kingdom Companies Act of 2026, which at the time of acquisition owned 134 care homes across England, Scotland and Northern Ireland.

Geopolitical and trade · International conflicts and tensions

Our business could also be adversely impacted by volatility caused by geopolitical events, such as the conflict in Ukraine. A significant downturn in economic activity may cause a reduction in spending on healthcare matters and our tenants and borrowers may need to seek to lower their costs by renegotiating their agreements with us.

Economic and market conditions · Inflation and deflation pressures

Increased costs due to inflationary conditions may continue to adversely affect the operating expenses of our tenants and borrowers and their ability to meet their obligations to us and may also increase the costs to operate our SHOP communities and the costs for us to make capital improvements to our properties.

Economic and market conditions · Economic recession and downturns

Unstable market and economic conditions may have serious adverse consequences on our business, results of operations and financial condition. Global credit and financial markets have experienced extreme volatility and disruptions over the past several years, including declines in consumer confidence, concerns about declines in economic growth, increases in the rate of inflation, increases in borrowing rates and changes in liquidity and credit availability.

Geopolitical and trade · Political instability and government changes

Our acquisition of Care REIT and any other investments we may make internationally will subject us to additional risks, including political instability or civil unrest.

Data and privacy · Data protection and privacy laws

If we, our tenants, managers, and borrowers fail to adhere to applicable privacy and data security laws, this could have a material adverse effect on us or on our tenants' or borrowers' ability to meet their obligations to us. We, our tenants, managers, and borrowers are subject to HIPAA and various other state and federal laws, as well as contractual obligations, that relate to privacy and data security.

Industry regulation · Safety and environmental regulations

Environmental compliance costs and liabilities may materially impair the value of properties owned by us. Under various federal, state and local laws, ordinances and regulations, as a current or previous owner of real estate, we may be required to investigate and clean up certain hazardous or toxic substances or petroleum released at a property.

Legal and litigation · Litigation and legal proceedings

We may be affected by unfavorable resolution of litigation or disputes and rising liability and insurance costs as a result thereof or other market factors. Our tenants, managers, and borrowers are from time to time parties to litigation, including, for example, disputes regarding the quality of care at healthcare properties or the operations of the properties.

Core operations · Operational disruption and business continuity

We are dependent on the ability of our third party managers to successfully manage and operate our SHOP communities. For our SHOP communities, we generally rely on our third party managers' personnel, expertise, technical resources and information systems, risk management processes, proprietary information, good faith and judgment to manage the senior housing communities' operations efficiently and effectively.

Core operations · Facility damage and equipment failure

If one of our properties experiences a loss that is uninsured or that exceeds policy coverage limits, we could lose the capital invested in the damaged property as well as the anticipated future cash flows from the property.

Human capital and workforce · Skills shortage and training requirements

In addition, our tenants and borrowers face an increasingly competitive labor market for skilled management personnel and nurses together with Medicaid reimbursement in some states that does not cover the full cost of caring for residents. Significant turnover, or a shortage of nurses or other trained personnel or general inflationary pressures on wages, may force tenants or borrowers to enhance pay and benefits packages.

Supply chain and procurement · Supplier operation and dependance

Replacement tenants or managers may be difficult to identify and we may be required to incur substantial renovation costs to make our healthcare properties suitable for such parties. If our tenants or managers terminate or do not renew their agreements with us, we would attempt to reposition the properties with another party.

Customer and revenue · Reimbursement and pricing pressure healthcare or insurance

Most of our tenants and borrowers depend on reimbursement from government and other third party payors and if reimbursement rates from such payors are reduced by future legislative reform, it could cause our revenues or the revenues of our tenants and borrowers to decline and could affect their ability to meet their obligations to us.

Strategic execution · Joint venture and partnership risks

Investments in consolidated joint ventures involve risks not present in investments in which we are the sole investor. Such investments may involve risks not otherwise present when acquiring real estate directly, including for example: the joint venture partner(s) may at any time have economic or business interests or goals which are or which may become inconsistent with our business interests or goals.

Customer and revenue · Customer concentration and key customer dependence

This risk is magnified where we lease multiple properties to a single tenant. We receive a significant portion of our income as rental payments under leases of properties we own directly or through our joint ventures.

Reputation and brand · Brand damage and negative publicity

Negative publicity of any of our tenants', or managers', litigation or other legal proceedings or investigations may also negatively impact their and our reputation, resulting in lower customer demand and revenues, which could have a material adverse effect on our financial condition, results of operations, and cash flows.

Technology infrastructure · Technology systems and infrastructure failure

Our technology infrastructure and information systems are also vulnerable to damage or interruption from natural disasters, power loss and telecommunications failures. Failure to maintain proper function, security and availability of our information systems or the loss or misuse of the data maintained in those systems could interrupt our operations.