Community Healthcare Trust Announces Results for the Three Months Ended September 30, 2018

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share amounts)

September 30, 2018

December 31, 2017

ASSETS

Real estate properties:

Land and land improvements

$

47,748

$

44,419

Buildings, improvements, and lease intangibles

376,310

343,955

Personal property

132

112

Total real estate properties

424,190

388,486

Less accumulated depreciation

(50,607)

(36,136)

Total real estate properties, net

373,583

352,350

Cash and cash equivalents

1,006

2,130

Mortgage note receivable, net

—

10,633

Other assets, net

40,711

20,653

Total assets

$

415,300

$

385,766

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Debt, net

$

127,449

$

93,353

Accounts payable and accrued liabilities

3,818

4,056

Other liabilities

4,716

4,983

Total liabilities

135,983

102,392

Commitments and contingencies

Stockholders' Equity

Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding

—

—

Common stock, $0.01 par value; 450,000,000 shares authorized; 18,533,802 and 18,085,798 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively

185

181

Additional paid-in capital

333,468

324,303

Cumulative net income

11,063

4,775

Accumulated other comprehensive loss

2,612

258

Cumulative dividends

(68,011)

(46,143)

Total stockholders' equity

279,317

283,374

Total liabilities and stockholders' equity

$

415,300

$

385,766

The Condensed Consolidated Balance Sheets do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

(Unaudited)

(Amounts in thousands, except per share amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2018

2017

2018

2017

REVENUES

Rental income

$

10,225

$

8,012

$

30,080

$

21,968

Tenant reimbursements

1,701

1,158

4,731

3,620

Mortgage interest

—

255

—

774

Other operating interest

679

19

1,625

19

12,605

9,444

36,436

26,381

EXPENSES

Property operating

2,627

2,225

7,497

6,103

General and administrative

1,395

1,069

4,092

2,674

Depreciation and amortization

4,925

4,544

14,471

12,749

Bad debts

68

—

68

67

9,015

7,838

26,128

21,593

OTHER INCOME (EXPENSE)

Interest expense

(1,643)

(1,091)

(4,482)

(2,897)

Other income (expense)

52

64

462

67

(1,591)

(1,027)

(4,020)

(2,830)

NET INCOME

$

1,999

$

579

$

6,288

$

1,958

NET INCOME PER COMMON SHARE:

Net income per common share – Basic

$

0.10

$

0.02

$

0.31

$

0.10

Net income per common share – Diluted

$

0.10

$

0.02

$

0.31

$

0.10

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC

17,670

16,242

17,696

13,884

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED

17,670

16,242

17,696

13,884

The Condensed Consolidated Statements of Income do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

RECONCILIATION OF FFO, NORMALIZED FFO, and AFFO ⁽¹⁾

(Amounts in thousands, except per share amounts)

(Unaudited)

Three Months Ended September 30,

2018

2017

Net income

$

1,999

$

579

   Real estate depreciation and amortization

4,918

4,539

   Total adjustments

4,918

4,539

Funds From Operations

$

6,917

$

5,118

   Transaction costs

—

11

Normalized Funds From Operations

$

6,917

$

5,129

   Straight line rent

(359)

(417)

   Deferred compensation

690

395

AFFO

$

7,248

$

5,107

   Funds from Operations per Common Share-Diluted

$

0.39

$

0.31

   Normalized Funds From Operations Per Common Share-Diluted

$

0.39

$

0.31

   AFFO Per Common Share-Diluted

$

0.40

$

0.31

Weighted Average Common Shares Outstanding-Diluted ⁽²⁾

17,948

16,402

(1)

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.  However, since real estate values have historically risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, the Company considers funds from operations ("FFO"), normalized FFO and adjusted funds from operations ("AFFO") to be appropriate measures of operating performance of an equity real estate investment trust ("REIT"). In particular, the Company believes that normalized FFO and AFFO are useful because they allow investors, analysts and Company management to compare the Company's operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events.

The Company uses the National Association of Real Estate Investment Trusts, Inc. ("NAREIT") definition of FFO. FFO and FFO per share are operating performance measures adopted by NAREIT. NAREIT defines FFO as the most commonly accepted and reported measure of a REIT's operating performance equal to "net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures." The Company has included normalized FFO which it has defined as FFO excluding certain expenses related to closing costs of properties acquired accounted for as business combinations and mortgages funded and has included AFFO which it has defined as normalized FFO excluding straight-line rent and deferred compensation and may include other non-cash items from time to time. Normalized FFO and AFFO presented herein may not be comparable to similar measures presented by other real estate companies due to the fact that not all real estate companies use the same definitions.

FFO, normalized FFO and AFFO should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of the Company's financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company's liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company's needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO, normalized FFO and AFFO should be examined in conjunction with net income as presented elsewhere herein.

(2)

Diluted weighted average common shares outstanding for FFO are calculated based on the treasury method, rather than the 2-class method used to calculate earnings per share.