Community Healthcare Trust Announces Results for the Three Months Ended September 30, 2021

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)

September 30, 2021

December 31, 2020

ASSETS

Real estate properties:

Land and land improvements

$

95,514

$

83,714

Buildings, improvements, and lease intangibles

724,465

651,398

Personal property

222

247

Total real estate properties

820,201

735,359

Less accumulated depreciation

(125,243)

(102,899)

Total real estate properties, net

694,958

632,460

Cash and cash equivalents

1,641

2,483

Restricted cash

456

409

Other assets, net

50,537

33,050

Total assets

$

747,592

$

668,402

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Debt, net

$

257,560

$

212,374

Accounts payable and accrued liabilities

6,910

5,743

Other liabilities, net

21,451

20,369

Total liabilities

285,921

238,486

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; 24,982,287 and
23,888,090 shares issued and outstanding at September 30, 2021 and December 31, 2020,
respectively

250

239

Additional paid-in capital

593,717

550,391

Cumulative net income

53,010

36,631

Accumulated other comprehensive loss

(8,269)

(11,846)

Cumulative dividends

(177,037)

(145,499)

Total stockholders' equity

461,671

429,916

Total liabilities and stockholders' equity

$

747,592

$

668,402

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, 2021 AND 2020

(Unaudited; Dollars in thousands, except per share amounts)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2021

2020

2021

2020

REVENUES

Rental income

$

22,447

$

18,939

$

65,233

$

54,197

Other operating interest

807

405

2,104

1,363

23,254

19,344

67,337

55,560

EXPENSES

Property operating

4,051

3,563

11,623

10,129

General and administrative

3,206

2,191

8,958

6,282

Depreciation and amortization

7,812

6,295

22,576

18,473

15,069

12,049

43,157

34,884

INCOME BEFORE INCOME TAXES AND OTHER ITEMS

8,185

7,295

24,180

20,676

Loss on sale of real estate

—

—

—

(313)

Interest expense

(2,788)

(2,064)

(7,753)

(6,496)

        Deferred income tax expense          

(45)

(20)

(104)

(40)

Interest and other income, net

2

—

56

10

NET INCOME

$

5,354

$

5,211

$

16,379

$

13,837

NET INCOME PER COMMON SHARE:

Net income per common share – Basic

$

0.20

$

0.22

$

0.63

$

0.59

Net income per common share – Diluted

$

0.20

$

0.22

$

0.63

$

0.59

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC

23,472

21,866

23,161

21,290

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED

23,472

21,866

23,161

21,290

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 and AFFO ⁽¹⁾

(Unaudited; Amounts in thousands, except per share amounts)

Three Months Ended September 30,

2021

2020

Net income

$

5,354

$

5,211

   Real estate depreciation and amortization

7,871

6,387

FFO

$

13,225

$

11,598

   Straight-line rent

(895)

(914)

   Stock-based compensation

2,004

1,284

AFFO

$

14,334

$

11,968

   FFO per Common Share-Diluted

$

0.55

$

0.52

   AFFO per Common Share-Diluted

$

0.59

$

0.53

Weighted Average Common Shares Outstanding-Diluted ⁽²⁾

24,220

22,468

(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") 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 AFFO is useful because it allows 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 (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, plus depreciation and amortization related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT also provides REITs with an option to exclude gains, losses and impairments of assets that are incidental to the main business of the REIT from the calculation of FFO.

In addition to FFO, the Company presents AFFO and AFFO per share. The Company defines AFFO as FFO, excluding certain expenses related to closing costs of properties acquired accounted for as business combinations and mortgages funded, excluding straight-line rent and the amortization of stock-based compensation, and including or excluding other non-cash items from time to time. 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 definition. 

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 and AFFO should be examined in conjunction with net income as presented elsewhere herein.

(2)

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