CareTrust REIT (CTRE): what its 10-K says it depends on

Customers

The Ensign Group (Ensign)

earns from · $92.1 million, or 23%, of total annualized contractual rental incomenamed as a risk

As of December 31, 2025, properties leased to Ensign and held for investment represented $92.1 million, or 23%, of total annualized contractual rental income, and properties leased to Pennant under the Pennant Master Lease for which Ensign provides a guaranty (the “Pennant Guaranty”) represented $7.6 million, or 2%, of total annualized contractual rental income.Risk factors (Item 1A)

The Pennant Group (Pennant)

earns from · $7.6 million, or 2%, of total annualized contractual rental incomenamed as a risk

As of December 31, 2025, properties leased to Ensign and held for investment represented $92.1 million, or 23%, of total annualized contractual rental income, and properties leased to Pennant under the Pennant Master Lease for which Ensign provides a guaranty (the “Pennant Guaranty”) represented $7.6 million, or 2%, of total annualized contractual rental income.Risk factors (Item 1A)

Suppliers

Third party SHOP managers

depends onnamed as a risk

We are dependent on the ability of our third party managers to successfully manage and operate our SHOP communities.Risk factors (Item 1A)

Other companies

Care REIT plc

approximately $595.4 millionnamed as a risk

The intended benefits of the Care REIT acquisition may not be realized.Risk factors (Item 1A)

Consumer Price Index / Retail Price Index

exposed to its pricenamed as a risk

In addition, if economic conditions result in significant increases in the Consumer Price Index or Retail Price Index, but the escalations under our leases are capped, our growth and profitability also may be limited.Risk factors (Item 1A)

Places

California

concentrated in · 25%named as a risk

As a result of the concentration of our properties in California, the U.K., Texas, and Tennessee as described in “Classification of properties in our Portfolio” under Item 1 of this Annual Report on Form 10-K, the conditions of local economies and real estate markets, including increases in real estate taxes, changes in governmental rules, regulations and reimbursement rates or criteria, changes in demographics, state funding, acts of nature, the impacts of climate change and other factors that may result in a decrease in demand and/or reimbursement for skilled nursing services in these states could have a disproportionately adverse effect on tenants’ and borrowers’ revenues, costs and results of operations, which may affect their ability to meet their obligations to us and may also adversely affect the revenues and results of operations related to our SHOP senior housing communities.Risk factors (Item 1A)

Also named by A, AAON, AFRM, ALK, ALLY, AN, ARE, AVAV and 88 more

United Kingdom

concentrated in · 15%named as a risk

Care REIT is our first major investment in the United Kingdom.Risk factors (Item 1A)

Also named by AGX, AJG, AMP, BAC, BF/B, BGC, BRO, C and 59 more

Texas

concentrated in · 13%named as a risk

Our owned properties and the properties securing our loans receivable that are located in Texas and certain other states in the southeast are especially susceptible to natural disasters such as hurricanes, tornadoes and flooding and our owned properties and the properties securing our loans receivable that are located in California are particularly susceptible to natural disasters such as fires, earthquakes and mudslides.Risk factors (Item 1A)

Also named by ABR, AFRM, ALLY, AN, ASO, ASTS, ATO, AXP and 70 more

Tennessee

concentrated in · 12%named as a risk

Our portfolio of SNFs and senior housing communities is broadly diversified by geographic location throughout the United States and the U.K., with concentrations in California, the U.K., Texas, and Tennessee based on revenue.Business (Item 1)

Also named by FHN, IMKTA, PNFP, RF, VMC

Idaho

operates in · 5%named as a risk

For example, the federal government and a number of states are currently managing budget deficits and, as a result, many states are focusing on the reduction of expenditures under their Medicaid programs, which may result in a freeze on Medicaid rates or a decrease in reimbursement rates for us, our tenants and borrowers, as recently occurred in Idaho.Risk factors (Item 1A)

Also named by GBCI, MDU, RYN

Illinois financing receivable portfolio

insures or lends to · $92,635

We have invested in a portfolio of properties through a sale and leaseback transaction and leased the properties back to an affiliate of the seller and provided the seller-lessee with purchase options.Business (Item 1)

Hazards

Extreme heat

operates innamed as a risk

Based on our overall portfolio physical climate risk assessment, we found that the highest climate risk for our portfolio was heat caused by higher temperatures, which may result in higher operating and energy costs for us, our tenants, managers, and borrowers and higher capital costs for resiliency measures for us and our tenants, managers, and borrowers to maintain the property and its value.Risk factors (Item 1A)

Also named by PNW

Hurricanes, tornadoes and flooding

operates innamed as a risk

Our owned properties and the properties securing our loans receivable that are located in Texas and certain other states in the southeast are especially susceptible to natural disasters such as hurricanes, tornadoes and flooding and our owned properties and the properties securing our loans receivable that are located in California are particularly susceptible to natural disasters such as fires, earthquakes and mudslides.Risk factors (Item 1A)

Wildfires, earthquakes and mudslides (California)

operates innamed as a risk

Our owned properties and the properties securing our loans receivable that are located in Texas and certain other states in the southeast are especially susceptible to natural disasters such as hurricanes, tornadoes and flooding and our owned properties and the properties securing our loans receivable that are located in California are particularly susceptible to natural disasters such as fires, earthquakes and mudslides.Risk factors (Item 1A)

Commodities and inputs

British Pound Sterling

exposed to its price · $3.8 millionnamed as a risk

Based solely on our results of operations for the year ended December 31, 2025, if the applicable exchange rate were to increase or decrease by 10%, our net income from our consolidated U.K.-based investments would increase or decrease, as applicable, by $3.8 million.Market risk (Item 7A)

Also named by AMG, BGC, BKNG, CBRE, FCFS, FDS, FIS, FSK and 31 more

Secured Overnight Financing Rate (SOFR)

exposed to its price · $500.0 million of outstanding variable rate indebtednessnamed as a risk

As of December 31, 2025, we had $500.0 million of outstanding variable rate indebtedness.Market risk (Item 7A)

Also named by ABR, ADBE, AGM, AMG, ARCC, BCSF, BRO, CAT and 21 more

Regulators

Centers for Medicare & Medicaid Services (CMS)

subject tonamed as a risk

Further, in July 2024, CMS adopted a final rule expanding its ability to impose per instance and per day civil monetary penalties on SNFs for health and safety deficiencies and non-compliance.Business (Item 1)

Also named by A, ABT, AMGN, AXGN, BAX, BWIN, CNC, COO and 23 more

Care Quality Commission (CQC)

subject tonamed as a risk

In England, where the majority of our U.K. operators are based, the Care Quality Commission (“CQC”) has regulatory oversight authority over the health and social care sectors and is responsible for approving, registering and inspecting our operators and the properties where they provide services.Business (Item 1)

Also named by OHI, WELL

Laws and programs

Medicare

subject to · 3.2%named as a risk

However, for fiscal year 2026, the Medicare prospective payment system for skilled nursing facilities is projected to increase by 3.2%.Risk factors (Item 1A)

Also named by ABT, ARWR, AXGN, BAX, BDX, BMY, BSX, CAH and 48 more

SNF Value-Based Purchasing Program

subject to · 2%named as a risk

If Medicare reimbursement provided to our healthcare tenants and borrowers is reduced under the SNF VBP Program, that reduction may have an adverse impact on their ability to meet their obligations to us.Business (Item 1)

Also named by OHI, WELL

REIT tax rules (Internal Revenue Code)

subject to · at least 90% of our REIT taxable incomenamed as a risk

If we fail to qualify to be taxed as a REIT in any year, we would be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and dividends paid to our stockholders would not be deductible by us in computing our taxable income.Risk factors (Item 1A)

Also named by IRM

U.K. Data Laws

subject to · up to 4% of annual worldwide turnover or £17.5 millionnamed as a risk

The U.K. Data Laws impose a significant number of obligations on data controllers with the potential for fines of up to 4% of annual worldwide turnover or £17.5 million, whichever is greater.Business (Item 1)

Also named by OHI

California Senate Bill No. 525 (SB 525)

subject to · $25 per hour after June 1, 2028named as a risk

If our tenants and borrowers are unable to offset these increased costs, their operating results and financial condition will be adversely impacted and our tenants and borrowers may be unable to satisfy their obligations to us.Risk factors (Item 1A)

One Big Beautiful Bill Act (OBBBA)

subject tonamed as a risk

A final rule from CMS was issued in April 2024, but it was subsequently vacated by a federal court in April 2025 and is now subject to a legislative moratorium until September 30, 2034, under the One Big Beautiful Bill Act of July 2025 (the "OBBBA").Risk factors (Item 1A)

Also named by AA, ABR, ADI, ADM, ALB, AMAT, AMGN, AMKR and 121 more

Medicaid

subject tonamed as a risk

For example, the federal government and a number of states are currently managing budget deficits and, as a result, many states are focusing on the reduction of expenditures under their Medicaid programs, which may result in a freeze on Medicaid rates or a decrease in reimbursement rates for us, our tenants and borrowers, as recently occurred in Idaho.Risk factors (Item 1A)

Also named by ABBV, ABT, ARE, ARWR, BAX, BMY, BSX, CHE and 39 more

REIT Investment Diversification and Empowerment Act (RIDEA)

subject tonamed as a risk

As a result, as the owner of the property under a RIDEA structure, we are responsible for, and our financial performance is impacted by, operational and legal risks and liabilities of the property, including those described above, even though we have limited ability to control or influence our operators’ management of these risks.Risk factors (Item 1A)