8-K
Sabra Health Care REIT, Inc. (SBRA)
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): February 22, 2022
SABRA HEALTH CARE REIT, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 001-34950 | 27-2560479 | ||
|---|---|---|---|---|
| (State of<br>Incorporation) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification No.) | ||
| 18500 Von Karman Avenue | Suite 550 | Irvine | CA | 92612 |
| --- | --- | --- | --- | --- |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number including area code: (888) 393-8248
(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)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.01 par value | SBRA | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On February 22, 2022, Sabra Health Care REIT, Inc. (“Sabra”) issued a press release reporting its results of operations for the three month period ended December 31, 2021. The press release refers to the Reconciliations of Non-GAAP Financial Measures that is available on the Investors section of Sabra’s website, free of charge, at www.sabrahealth.com. The text of the press release and the Reconciliations of Non-GAAP Financial Measures are furnished herewith as Exhibits 99.1 and 99.3, respectively, and are specifically incorporated by reference herein.
| Item 7.01 | Regulation FD Disclosure. |
|---|
The press release furnished herewith as Exhibit 99.1 refers to a supplemental information package that is available on the Investors section of Sabra’s website, free of charge, at www.sabrahealth.com. The text of the supplemental information package is furnished herewith as Exhibit 99.2 and is specifically incorporated by reference herein.
Sabra intends to present the materials attached to this report as Exhibit 99.4 in investor presentations. The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the presentation materials include material investor information that is not otherwise publicly available. In addition, Sabra does not assume any obligation to update such information in the future.
The information in Items 2.02 and 7.01 of this Form 8-K and the information in Exhibits 99.1, 99.2, 99.3 and 99.4 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 Sabra 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 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. |
| --- | --- |
| 99.1 | Press Release of Sabra Health Care REIT, Inc., dated February 22, 2022. |
| 99.2 | Sabra Health Care REIT, Inc. Supplemental Information Package, dated December 31, 2021. |
| 99.3 | Reconciliations of Non-GAAP Financial Measures, dated December 31, 2021. |
| 99.4 | Investor Presentation. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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.
| SABRA HEALTH CARE REIT, INC. | ||
|---|---|---|
| Date: February 22, 2022 | /S/ MICHAEL COSTA | |
| Name: | Michael Costa | |
| Title: | Chief Financial Officer, Secretary and Executive Vice President |
Document
Exhibit 99.1
FOR IMMEDIATE RELEASE
SABRA REPORTS FOURTH QUARTER 2021 RESULTS; PROVIDES BUSINESS UPDATE
IRVINE, CA, February 22, 2022 — Sabra Health Care REIT, Inc. (“Sabra,” the “Company” or “we”) (Nasdaq: SBRA) today announced its results of operations for the fourth quarter of 2021. In addition, the Company provided a business update.
FOURTH QUARTER 2021 RESULTS AND RECENT EVENTS
•Results per diluted common share for the fourth quarter of 2021 were as follows:
•Net Loss: $(0.11)
•FFO: $0.11
•Normalized FFO: $0.39
•AFFO: $0.20
•Normalized AFFO: $0.37
•Included in net loss and FFO is the acceleration of amortization of the remaining $18.6 million ($0.08 per diluted common share) above-market lease intangible related to our lease with the Avamere Family of Companies (“Avamere”). This acceleration of amortization comes as a result of our recently amended lease with Avamere and is reflected as a reduction of our rental revenues for the fourth quarter of 2021. Additionally, Avamere’s December rental obligation of $3.6 million ($0.02 per diluted common share) was paid in January 2022, and accordingly will be reflected in our results for the first quarter of 2022. See further discussion on Avamere under “Business Update.”
•EBITDARM Coverage for our skilled nursing and specialty hospital portfolios were 1.77x and 3.83x, respectively. Pro forma for Avamere’s recently reduced rent, EBITDARM coverage for our skilled nursing portfolio was 1.86x. See further discussion on EBITDARM Coverage trends under “Business Update.”
•From the beginning of the COVID-19 pandemic through January 2022, we have collected 99.6% of our forecasted rents. This includes drawing on a letter of credit to fund $11.9 million of rent from Avamere. Rent collections through the first three weeks of February are in line with what we normally receive through this point of the month.
•During the fourth quarter of 2021, we acquired a leased senior housing community for $26.3 million with an initial yield of 6.9%. Additionally, we acquired a closed hotel for $10.9 million that will be converted to an addiction treatment center, with Sabra’s total investment expected to be $33.4 million at a 7.5% yield. We also completed the first tranche of the previously announced investment in Recovery Centers of America for $290.0 million at a 7.5% yield. Our full year 2021 investment activity totaled $419.4 million with a weighted average estimated stabilized cash yield of 7.6%.
•Subsequent to December 31, 2021, Sabra acquired a managed senior housing community from our proprietary development pipeline for a purchase price of $26.0 million, which includes $5.6 million previously funded through the Company’s preferred equity investment in the development. This investment has an estimated first year cash yield of 6.7%.
•As noted in our February 3, 2022 press release, Sabra and Sienna Senior Living (“Sienna”) have agreed to acquire a portfolio of 11 high-quality Canadian senior housing communities strategically positioned across the provinces of Ontario and Saskatchewan for total consideration of C$307.5 million (USD $243 million). The 1,048-unit portfolio will be acquired through a newly formed 50/50 joint venture, with Sienna to operate the portfolio. The transaction is expected to close upon receipt of regulatory approvals, which is anticipated to occur in the second quarter of 2022.
•During the fourth quarter of 2021, we completed the sale of four skilled nursing/transitional care facilities, two senior housing communities and two hospitals for gross sales proceeds of $85.9 million. These facilities generated $7.0 million of Annualized Cash NOI.
•We continue to maintain a strong Net Debt to Adjusted EBITDA ratio of 4.98x as of December 31, 2021.
•On February 1, 2022, our Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on February 28, 2022 to common stockholders of record as of the close of business on February 11, 2022. The dividend represents a payout of 81% of our Normalized AFFO per share of $0.37.
BUSINESS UPDATE
Avamere
As noted in our February 2, 2022 press release, Sabra and Avamere entered into a definitive agreement to amend the Company’s master lease. Effective February 1, 2022, Avamere’s annual base rent on the current portfolio has been reduced roughly 30% to $30.7 million, representing an annual run rate reduction of $0.06 per diluted common share. Sabra has the opportunity to recapture this rent reduction as the portfolio’s performance improves. As a condition to amending this lease, Avamere has paid past due rent for December 2021 totaling $3.6 million and has agreed to pay January 2022 rent totaling $3.7 million by March 25, 2022.
The following table illustrates the pro forma impact of this rent reduction on our historical trailing twelve-month EBITDARM coverages for Avamere and our skilled nursing portfolio.
| Avamere | 1Q 2020 | 2Q 2020 | 3Q 2020 | 4Q 2020 | 1Q 2021 | 2Q 2021 | 3Q 2021 | 4Q 2021 |
|---|---|---|---|---|---|---|---|---|
| T12M Coverage - Reported | 1.17x | 1.20x | 1.31x | 1.37x | 1.53x | 1.54x | 1.40x | 1.33x |
| T12M Coverage - Pro Forma | 1.53x | 1.60x | 1.77x | 1.89x | 2.14x | 2.17x | 1.99x | 1.87x |
| Skilled Nursing / Transitional Care | 1Q 2020 | 2Q 2020 | 3Q 2020 | 4Q 2020 | 1Q 2021 | 2Q 2021 | 3Q 2021 | 4Q 2021 |
| T12M Coverage - Reported | 1.65x | 1.66x | 1.84x | 1.93x | 1.99x | 1.99x | 1.78x | 1.77x |
| T12M Coverage - Pro Forma | 1.71x | 1.73x | 1.92x | 2.02x | 2.09x | 2.09x | 1.87x | 1.86x |
Occupancy Trends — Skilled Nursing
On average, Sabra’s seven largest skilled nursing tenants (representing 39% of annualized cash NOI) saw a slight sequential decline in occupancy in the fourth quarter driven primarily by the rise of the Omicron variant of COVID-19, as well as admissions restrictions related to state mandates and labor shortages. These headwinds continued into January, while preliminary data for February suggests occupancy is beginning to rebound.
| Jun-21 | Jul-21 | Aug-21 | Sep-21 | Oct-21 | Nov-21 | Dec-21 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| North American | 77.5 | % | 79.6 | % | 78.7 | % | 78.7 | % | 79.8 | % | 79.7 | % | 78.9 | % |
| Signature Healthcare | 75.5 | % | 76.4 | % | 76.2 | % | 76.5 | % | 76.8 | % | 76.7 | % | 75.9 | % |
| Avamere | 75.5 | % | 75.6 | % | 72.7 | % | 71.7 | % | 69.6 | % | 70.8 | % | 71.8 | % |
| Cadia | 81.8 | % | 83.1 | % | 84.5 | % | 82.9 | % | 83.4 | % | 82.8 | % | 81.5 | % |
| Healthmark | 62.5 | % | 64.0 | % | 64.1 | % | 64.0 | % | 63.7 | % | 64.7 | % | 64.8 | % |
| The McGuire Group | 81.1 | % | 82.7 | % | 85.3 | % | 85.4 | % | 84.2 | % | 83.4 | % | 84.5 | % |
| CommuniCare | 80.2 | % | 80.8 | % | 83.2 | % | 83.0 | % | 81.6 | % | 79.3 | % | 79.0 | % |
| Total | 75.7 | % | 76.7 | % | 76.6 | % | 76.4 | % | 76.0 | % | 76.0 | % | 75.8 | % |
EBITDARM Coverage
Trailing 3-month EBITDARM coverage excluding Provider Relief Funds (“PRF”) (reported one quarter in arrears) increased sequentially in our skilled nursing and specialty hospital segments as a result of improved operating performance. Meanwhile, trailing 3-month EBITDARM coverage excluding PRF in our leased senior housing segment held steady as higher occupancy was offset by labor cost pressure.
| Skilled Nursing / Transitional Care | 1Q 2020 | 2Q 2020 | 3Q 2020 | 4Q 2020 | 1Q 2021 | 2Q 2021 | 3Q 2021 | 4Q 2021 |
|---|---|---|---|---|---|---|---|---|
| T12M Coverage* | 1.71x | 1.73x | 1.92x | 2.02x | 2.09x | 2.09x | 1.87x | 1.86x |
| T12M Coverage w/o PRF* | 1.71x | 1.72x | 1.66x | 1.63x | 1.51x | 1.44x | 1.44x | 1.54x |
| T3M Coverage w/o PRF* | 1.73x | 1.81x | 1.61x | 1.36x | 1.28x | 1.52x | 1.58x | 1.78x |
| Senior Housing - Leased | 1Q 2020 | 2Q 2020 | 3Q 2020 | 4Q 2020 | 1Q 2021 | 2Q 2021 | 3Q 2021 | 4Q 2021 |
| T12M Coverage | 1.38x | 1.38x | 1.31x | 1.25x | 1.23x | 1.12x | 1.09x | 1.04x |
| T12M Coverage w/o PRF | 1.38x | 1.38x | 1.30x | 1.23x | 1.19x | 1.08x | 1.06x | 1.02x |
| T3M Coverage w/o PRF | 1.39x | 1.33x | 1.08x | 1.18x | 1.18x | 0.91x | 1.00x | 1.00x |
| Specialty Hospitals and Other | 1Q 2020 | 2Q 2020 | 3Q 2020 | 4Q 2020 | 1Q 2021 | 2Q 2021 | 3Q 2021 | 4Q 2021 |
| T12M Coverage | 3.36x | 3.31x | 3.38x | 3.55x | 3.67x | 3.91x | 3.86x | 3.83x |
| T12M Coverage w/o PRF | 3.36x | 3.25x | 3.28x | 3.45x | 3.57x | 3.87x | 3.83x | 3.80x |
| T3M Coverage w/o PRF | 4.00x | 2.34x | 3.59x | 3.86x | 4.46x | 3.59x | 3.46x | 3.73x |
* Pro forma for Avamere's recently restructured lease
Same-Store Senior Housing - Managed
On average, REVPOR grew 3% sequentially across our assisted living communities driven primarily by annual rent increases implemented on October 1st in our Enlivant portfolio. REVPOR in our independent living portfolio has held steady as rate increases have been more prevalent in higher-acuity settings as operators attempt to offset rising labor costs.
| 4Q 2020 | 1Q 2021 | 2Q 2021 | 3Q 2021 | 4Q 2021 | YoY Change | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Assisted living | $ | 6,061 | $ | 5,951 | $ | 6,028 | $ | 6,065 | $ | 6,247 | ||||||
| Sequential Change | (1.8) | % | 1.3 | % | 0.6 | % | 3.0 | % | 3.1 | % | ||||||
| Independent living | $ | 2,529 | $ | 2,553 | $ | 2,544 | $ | 2,531 | $ | 2,542 | ||||||
| Sequential Change | 0.9 | % | (0.4) | % | (0.5) | % | 0.4 | % | 0.5 | % |
After several months of steady gains following the implementation of vaccine clinics, occupancy growth slowed in the fourth quarter due to the rise of the Omicron variant of COVID-19 and normal seasonality. In addition, Cash NOI declined sequentially as revenue growth was more than offset by operating expense headwinds. Operating expense growth was concentrated in our assisted-living portfolio and was primarily driven by labor challenges that forced operators to increase wages and utilize agency staffing to fill open positions.
| 4Q 2020 | 1Q 2021 | 2Q 2021 | 3Q 2021 | 4Q 2021 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Occupancy - AL | 77.9 | % | 68.8 | % | 70.8 | % | 73.5 | % | 73.3 | % | |||||
| Sequential Change | (9.1) | % | 2.0 | % | 2.7 | % | (0.2) | % | |||||||
| Occupancy - IL | 80.5 | % | 79.0 | % | 78.6 | % | 79.8 | % | 80.7 | % | |||||
| Sequential Change | (1.5) | % | (0.4) | % | 1.2 | % | 0.9 | % | |||||||
| Resident fees and services | $ | 38,343 | $ | 35,675 | $ | 36,636 | $ | 37,002 | $ | 37,852 | |||||
| Sequential Change | (7.0) | % | 2.7 | % | 1.0 | % | 2.3 | % | |||||||
| Cash NOI 1 | $ | 10,199 | $ | 6,945 | $ | 9,316 | $ | 8,246 | $ | 7,374 | |||||
| Sequential Change | (31.9) | % | 34.1 | % | (11.5) | % | (10.6) | % |
1 Resident fees and services and Cash NOI balances include $0.6 million and $0.5 million of Grant Income for 4Q 2020 and 2Q 2021, respectively.
Commenting on the fourth quarter's results, Rick Matros, CEO and Chair, said, “COVID cases in our portfolio peaked before the end of January and then started dropping, materially so for the staff at our facilities. Consequently, with more staff available, occupancy has increased the first two weeks of February. We are more optimistic that absent the emergence of a new variant, our portfolio and the broader industry can get back on track toward recovery. We are also pleased to have agreed with Avamere on a restructuring of their lease obligations and believe the restructured lease provides them with a path for success. Our pending Canadian joint venture gets 2022 off to a good start on the investment front. We have diligently pursued opportunities to expand our presence in Canada over the last several years. Canada has proven to be a stable market and we look forward to continued growth there. As always, we want to express gratitude to the staff at our facilities for their commitment to the mission, in the face of the most difficult of circumstances.”
LIQUIDITY
As of December 31, 2021, we had approximately $1.1 billion of liquidity, consisting of unrestricted cash and cash equivalents of $112.0 million and available borrowings of $1.0 billion under our revolving credit facility. As of December 31, 2021, we also had $475.0 million available under the ATM Program.
CONFERENCE CALL AND COMPANY INFORMATION
A conference call with a simultaneous webcast to discuss the 2021 fourth quarter results will be held on Tuesday, February 22, 2022 at 10:00 am Pacific Time. The dial-in number for U.S. participants is (844) 862-3710. For participants outside the U.S., the dial-in number is (612) 979-9902. The conference ID number is 3672788. The webcast URL is https://edge.media-server.com/mmc/p/r5to66um. A digital replay of the call will be available on the Company’s website at www.sabrahealth.com. The Company’s supplemental information package for the fourth quarter will also be available on the Company’s website in the “Investors” section.
ABOUT SABRA
As of December 31, 2021, Sabra’s investment portfolio included 416 real estate properties held for investment (consisting of (i) 279 Skilled Nursing/Transitional Care facilities, (ii) 60 Senior Housing communities (“Senior Housing - Leased”), (iii) 49 Senior Housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”) and (iv) 28 Specialty Hospitals and Other facilities), one investment in a sales-type lease, 18 investments in loans receivable (consisting of (i) two mortgage loans, (ii) one construction loan and (iii) 15 other loans), eight preferred equity investments and one investment in an unconsolidated joint venture. As of December 31, 2021, Sabra’s real estate properties held for investment included 41,346 beds/units, spread across the United States and Canada.
FORWARD-LOOKING STATEMENTS SAFE HARBOR
This release contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified, without limitation, by the use of “expects,” “believes,” “intends,” “should” or comparable terms or the negative thereof. Examples of forward-looking statements include all statements regarding our expectations regarding our recent and pending investments; the impact of the COVID-19 pandemic on our tenants, operators and Senior Housing - Managed communities; our expectations regarding the potential mitigating effects of the state and federal assistance programs available to our tenants, operators and Senior Housing - Managed communities; our expectations regarding the recovery of our portfolio and industry from the COVID-19 pandemic; our expectations regarding opportunities for growth in the Canadian market; and our other expectations regarding our future financial position, results of operations, cash flows, liquidity, business strategy, growth opportunities, potential investments and dispositions, and plans and objectives for future operations and capital raising activity.
Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: the ongoing COVID-19 pandemic and measures intended to prevent its spread, and the related impact on our tenants, operators and Senior Housing - Managed communities; operational risks with respect to our Senior Housing - Managed communities; competitive conditions in our industry; our ability to consummate the pending Canadian portfolio acquisition in a joint venture with Sienna on the terms and timing described in this press release or at all; the loss of key management personnel; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; potential impairment charges and adjustments related to the accounting of our assets; the potential variability of our reported rental and related revenues as a result of Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs, on January 1, 2019; risks associated with our investment in our unconsolidated joint venture; catastrophic weather and other natural or man-made disasters, the effects of climate change on our properties and a failure to implement sustainable and energy-efficient measures; increased operating costs for our tenants and operators; increased healthcare regulation and enforcement; our tenants’ dependency on reimbursement from governmental and other third-party payor programs; the effect of our tenants declaring bankruptcy or becoming insolvent; our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties; the impact of litigation and rising insurance costs on the business of our tenants; the impact of required regulatory approvals of transfers of healthcare properties; environmental compliance costs and liabilities associated with real estate properties we own; our tenants’ or operators’ failure to adhere to applicable privacy and data security laws, or a material breach of our or our tenants’ or operators’ information technology; our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; adverse changes in our credit ratings; our ability to make dividend distributions at expected levels; our ability to raise capital through equity and debt financings; changes in foreign currency exchange rates and other risks associated with our ownership of property outside the U.S.; the relatively illiquid nature of real estate investments; our ability to maintain our status as a real estate investment trust (“REIT”) under the federal tax laws; compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT; changes in tax laws and regulations affecting REITs (including the potential effects of the Tax Cuts and Jobs Act); the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities; and the exclusive forum provisions in our bylaws.
Additional information concerning risks and uncertainties that could affect our business can be found in our filings with the Securities and Exchange Commission (the “SEC”), including in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021. We do not intend, and we undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, unless required by law to do so.
TENANT, OPERATOR AND BORROWER INFORMATION
This release includes information regarding certain of our tenants that lease properties from us and our operators and borrowers, most of which are not subject to SEC reporting requirements. The information related to our tenants, operators and borrowers that is provided in this release has been provided by, or derived from information provided by, such tenants, operators and borrowers. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only.
NOTE REGARDING NON-GAAP FINANCIAL MEASURES
This release includes the following financial measures defined as non-GAAP financial measures by the SEC: Adjusted EBITDA, cash net operating income (“Cash NOI”), Annualized Cash NOI, funds from operations (“FFO”), Normalized FFO, Adjusted FFO (“AFFO”), Normalized AFFO, FFO per diluted common share, Normalized FFO per diluted common share, AFFO per diluted common share and Normalized AFFO per diluted common share. These measures may be different than non-GAAP financial measures used by other companies, and the presentation of these measures is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with U.S. generally accepted accounting principles. An explanation of these non-GAAP financial measures is included under “Reporting Definitions” in this release, and reconciliations of these non-GAAP financial measures to the GAAP financial measures we consider most comparable are included on the Investors section of our website at https://ir.sabrahealth.com/investors/financials/quarterly-results.
CONTACT
Investor & Media Inquiries: (888) 393-8248 or investorinquiries@sabrahealth.com
SABRA HEALTH CARE REIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(dollars in thousands, except per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Revenues: | ||||||||
| Rental and related revenues (1) | $ | 87,183 | $ | 110,733 | $ | 396,716 | $ | 430,584 |
| Interest and other income | 7,940 | 3,184 | 17,317 | 11,940 | ||||
| Resident fees and services | 40,534 | 38,137 | 155,512 | 156,045 | ||||
| Total revenues | 135,657 | 152,054 | 569,545 | 598,569 | ||||
| Expenses: | ||||||||
| Depreciation and amortization | 45,079 | 44,158 | 178,991 | 176,737 | ||||
| Interest | 25,676 | 24,524 | 98,632 | 100,424 | ||||
| Triple-net portfolio operating expenses | 5,011 | 5,109 | 20,221 | 20,590 | ||||
| Senior housing - managed portfolio operating expenses | 32,373 | 27,987 | 120,980 | 110,963 | ||||
| General and administrative | 8,237 | 8,105 | 34,669 | 32,755 | ||||
| Provision for loan losses and other reserves | 2,045 | 1,149 | 3,935 | 1,855 | ||||
| Impairment of real estate | 9,004 | 849 | 9,499 | 4,003 | ||||
| Total expenses | 127,425 | 111,881 | 466,927 | 447,327 | ||||
| Other income (expense): | ||||||||
| Loss on extinguishment of debt | (32,862) | — | (34,622) | (531) | ||||
| Other (expense) income | (13) | (154) | 373 | 2,154 | ||||
| Net gain on sales of real estate | 14,085 | 33 | 12,301 | 2,861 | ||||
| Total other (expense) income | (18,790) | (121) | (21,948) | 4,484 | ||||
| (Loss) income before loss from unconsolidated joint venture and income tax (expense) benefit | (10,558) | 40,052 | 80,670 | 155,726 | ||||
| Loss from unconsolidated joint venture | (13,264) | (3,562) | (192,081) | (16,599) | ||||
| Income tax (expense) benefit | (531) | 627 | (1,845) | (710) | ||||
| Net (loss) income | $ | (24,353) | $ | 37,117 | $ | (113,256) | $ | 138,417 |
| Net (loss) income, per: | ||||||||
| Basic common share | $ | (0.11) | $ | 0.18 | $ | (0.52) | $ | 0.67 |
| Diluted common share | $ | (0.11) | $ | 0.18 | $ | (0.52) | $ | 0.67 |
| Weighted-average number of common shares outstanding, basic | 227,519,771 | 208,101,883 | 219,073,027 | 206,223,503 | ||||
| Weighted-average number of common shares outstanding, diluted | 227,519,771 | 209,322,132 | 219,073,027 | 207,252,830 |
(1) See page 8 for additional details regarding Rental and related revenues.
SABRA HEALTH CARE REIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME - SUPPLEMENTAL INFORMATION
(dollars in thousands, except per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Cash rental income | $ | 99,023 | $ | 99,779 | $ | 404,503 | $ | 405,257 |
| Straight-line rental income | 1,945 | 3,711 | 13,059 | 17,360 | ||||
| Straight-line rental income receivable write-offs | (157) | — | (25,370) | (13,750) | ||||
| Above/below market lease amortization | 1,091 | 2,088 | 5,076 | 7,911 | ||||
| Above/below market lease intangible amortization acceleration | (18,588) | — | (18,588) | (7,063) | ||||
| Operating expense recoveries | 3,869 | 5,155 | 18,036 | 20,869 | ||||
| Rental and related revenues | $ | 87,183 | $ | 110,733 | $ | 396,716 | $ | 430,584 |
SABRA HEALTH CARE REIT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
| December 31, 2021 | December 31, 2020 | |||
|---|---|---|---|---|
| Assets | ||||
| Real estate investments, net of accumulated depreciation of $831,324 and $681,657 as of December 31, 2021 and December 31, 2020, respectively | $ | 5,162,884 | $ | 5,285,038 |
| Loans receivable and other investments, net | 399,086 | 102,839 | ||
| Investment in unconsolidated joint venture | 96,680 | 288,761 | ||
| Cash and cash equivalents | 111,996 | 59,076 | ||
| Restricted cash | 3,890 | 6,447 | ||
| Lease intangible assets, net | 54,063 | 82,796 | ||
| Accounts receivable, prepaid expenses and other assets, net | 138,108 | 160,646 | ||
| Total assets | $ | 5,966,707 | $ | 5,985,603 |
| Liabilities | ||||
| Secured debt, net | $ | 66,663 | $ | 79,065 |
| Term loans, net | 594,246 | 1,044,916 | ||
| Senior unsecured notes, net | 1,733,566 | 1,248,393 | ||
| Accounts payable and accrued liabilities | 142,989 | 146,276 | ||
| Lease intangible liabilities, net | 49,713 | 57,725 | ||
| Total liabilities | 2,587,177 | 2,576,375 | ||
| Equity | ||||
| Preferred stock, $0.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2021 and December 31, 2020 | — | — | ||
| Common stock, $0.01 par value; 500,000,000 shares authorized, 230,398,655 and 210,560,815 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 2,304 | 2,106 | ||
| Additional paid-in capital | 4,482,451 | 4,163,228 | ||
| Cumulative distributions in excess of net income | (1,095,204) | (716,195) | ||
| Accumulated other comprehensive loss | (10,021) | (39,911) | ||
| Total equity | 3,379,530 | 3,409,228 | ||
| Total liabilities and equity | $ | 5,966,707 | $ | 5,985,603 |
SABRA HEALTH CARE REIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Year Ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Cash flows from operating activities: | ||||
| Net (loss) income | $ | (113,256) | $ | 138,417 |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 178,991 | 176,737 | ||
| Non-cash rental and related revenues | 25,823 | (4,458) | ||
| Non-cash interest income | (1,988) | (2,351) | ||
| Non-cash interest expense | 8,368 | 8,418 | ||
| Stock-based compensation expense | 7,914 | 7,907 | ||
| Loss on extinguishment of debt | 34,622 | 531 | ||
| Provision for loan losses and other reserves | 3,935 | 1,855 | ||
| Net gain on sales of real estate | (12,301) | (2,861) | ||
| Impairment of real estate | 9,499 | 4,003 | ||
| Other-than-temporary impairment of unconsolidated joint venture | 164,126 | — | ||
| Loss from unconsolidated joint venture | 27,955 | 16,599 | ||
| Distributions of earnings from unconsolidated joint venture | — | 12,795 | ||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable, prepaid expenses and other assets, net | 8,223 | (6,398) | ||
| Accounts payable and accrued liabilities | 14,479 | 3,658 | ||
| Net cash provided by operating activities | 356,390 | 354,852 | ||
| Cash flows from investing activities: | ||||
| Acquisition of real estate | (99,448) | (92,945) | ||
| Origination and fundings of loans receivable | (290,000) | (1,651) | ||
| Origination and fundings of preferred equity investments | (9,061) | (20,069) | ||
| Additions to real estate | (42,651) | (47,354) | ||
| Repayments of loans receivable | 2,949 | 4,093 | ||
| Repayments of preferred equity investments | 1,292 | 3,419 | ||
| Net proceeds from the sales of real estate | 100,723 | 16,751 | ||
| Distributions in excess of earnings from unconsolidated joint venture | — | 1,305 | ||
| Net cash used in investing activities | (336,196) | (136,451) | ||
| Cash flows from financing activities: | ||||
| Proceeds from issuance of senior unsecured notes | 791,520 | — | ||
| Principal payments on senior unsecured notes | (300,000) | — | ||
| Principal payments on term loans | (455,000) | — | ||
| Principal payments on secured debt | (12,661) | (3,072) | ||
| Payments of deferred financing costs | (9,317) | (830) | ||
| Payments related to extinguishment of debt | (30,196) | — | ||
| Issuance of common stock, net | 308,713 | 80,092 | ||
| Dividends paid on common stock | (262,919) | (278,299) | ||
| Net cash provided by (used in) financing activities | 30,140 | (202,109) | ||
| Net increase in cash, cash equivalents and restricted cash | 50,334 | 16,292 | ||
| Effect of foreign currency translation on cash, cash equivalents and restricted cash | 29 | 88 | ||
| Cash, cash equivalents and restricted cash, beginning of period | 65,523 | 49,143 | ||
| Cash, cash equivalents and restricted cash, end of period | $ | 115,886 | $ | 65,523 |
SABRA HEALTH CARE REIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)
| Year Ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Supplemental disclosure of cash flow information: | ||||
| Interest paid | $ | 85,464 | $ | 92,589 |
| Income taxes paid | $ | 1,839 | $ | 2,439 |
| Supplemental disclosure of non-cash investing activities: | ||||
| Decrease in loans receivable and other investments due to acquisition of real estate | $ | — | $ | 20,731 |
| Secured debt assumed by buyer in connection with sale of real estate | $ | — | $ | 31,830 |
SABRA HEALTH CARE REIT, INC.
FUNDS FROM OPERATIONS (FFO), NORMALIZED FFO,
ADJUSTED FUNDS FROM OPERATIONS (AFFO) AND NORMALIZED AFFO
(dollars in thousands, except per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Net (loss) income | $ | (24,353) | $ | 37,117 | $ | (113,256) | $ | 138,417 |
| Add: | ||||||||
| Depreciation and amortization of real estate assets | 45,079 | 44,158 | 178,991 | 176,737 | ||||
| Depreciation, amortization and impairment of real estate assets related to unconsolidated joint venture | 9,600 | 5,424 | 26,129 | 26,949 | ||||
| Net gain on sales of real estate | (14,085) | (33) | (12,301) | (2,861) | ||||
| Net loss on sales of real estate related to unconsolidated joint venture | 3 | 10 | 33 | 3,281 | ||||
| Impairment of real estate | 9,004 | 849 | 9,499 | 4,003 | ||||
| Other-than-temporary impairment of unconsolidated joint venture | — | — | 164,126 | — | ||||
| FFO | $ | 25,248 | $ | 87,525 | $ | 253,221 | $ | 346,526 |
| Write-offs of straight-line rental income receivable and lease intangibles | 18,745 | — | 40,759 | 21,200 | ||||
| Lease termination income | — | — | — | (300) | ||||
| Loss on extinguishment of debt | 32,862 | — | 34,622 | 531 | ||||
| Provision for loan losses and other reserves | 2,045 | 1,149 | 3,935 | 1,855 | ||||
| Support payments paid to joint venture manager | 7,350 | — | 9,800 | — | ||||
| Other normalizing items (1) | 1,792 | (314) | 2,644 | (1,283) | ||||
| Normalized FFO | $ | 88,042 | $ | 88,360 | $ | 344,981 | $ | 368,529 |
| FFO | $ | 25,248 | $ | 87,525 | $ | 253,221 | $ | 346,526 |
| Stock-based compensation expense | 927 | 2,256 | 7,914 | 7,907 | ||||
| Non-cash rental and related revenues | 15,710 | (5,798) | 25,823 | (4,458) | ||||
| Non-cash interest income | (544) | (608) | (1,988) | (2,351) | ||||
| Non-cash interest expense | 2,979 | 1,891 | 8,368 | 8,418 | ||||
| Non-cash portion of loss on extinguishment of debt | 2,666 | — | 4,426 | 531 | ||||
| Provision for loan losses and other reserves | 2,045 | 1,149 | 3,935 | 1,855 | ||||
| Other non-cash adjustments related to unconsolidated joint venture | (3,687) | 576 | (5,051) | 1,913 | ||||
| Other non-cash adjustments | 172 | 255 | 492 | 825 | ||||
| AFFO | $ | 45,516 | $ | 87,246 | $ | 297,140 | $ | 361,166 |
| Cash portion of lease termination income | — | — | — | (300) | ||||
| Cash portion of loss on extinguishment of debt | 30,196 | — | 30,196 | — | ||||
| Support payments paid to joint venture manager | 7,350 | — | 9,800 | — | ||||
| Other normalizing items (1) | 1,752 | (337) | 2,715 | (1,369) | ||||
| Normalized AFFO | $ | 84,814 | $ | 86,909 | $ | 339,851 | $ | 359,497 |
| Amounts per diluted common share: | ||||||||
| Net (loss) income | $ | (0.11) | $ | 0.18 | $ | (0.52) | $ | 0.67 |
| FFO | $ | 0.11 | $ | 0.42 | $ | 1.15 | $ | 1.67 |
| Normalized FFO | $ | 0.39 | $ | 0.42 | $ | 1.57 | $ | 1.78 |
| AFFO | $ | 0.20 | $ | 0.42 | $ | 1.35 | $ | 1.74 |
| Normalized AFFO | $ | 0.37 | $ | 0.41 | $ | 1.54 | $ | 1.73 |
| Weighted average number of common shares outstanding, diluted: | ||||||||
| Net (loss) income | 227,519,771 | 209,322,132 | 219,073,027 | 207,252,830 | ||||
| FFO and Normalized FFO | 228,591,078 | 209,322,132 | 220,102,563 | 207,252,830 | ||||
| AFFO and Normalized AFFO | 228,992,103 | 209,983,245 | 220,526,512 | 208,039,530 |
(1) FFO and AFFO for the year ended December 31, 2021 and 2020 include $0.4 million and $2.3 million, respectively, earned during the period related to legacy Care Capital Properties, Inc. investments. In addition, other normalizing items for FFO and AFFO include triple-net operating expenses, net of recoveries.
REPORTING DEFINITIONS
Adjusted EBITDA*
Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company’s long-term equity award program, and loan loss reserves. Adjusted EBITDA is an important non-GAAP supplemental measure of operating performance.
Annualized Cash Net Operating Income (“Annualized Cash NOI”)*
The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Annualized Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Annualized Cash NOI as Annualized Revenues less operating expenses, excluding COVID-19 Pandemic Expenses, and non-cash revenues and expenses. Annualized Cash NOI excludes all other financial statement amounts included in net income.
Annualized Revenues
The annual contractual rental revenues under leases and interest and other income generated by the Company’s loans receivable and other investments based on amounts invested and applicable terms as of the end of the period presented. Annualized Revenues do not include tenant recoveries, additional rents or Grant Income and are adjusted to (i) reflect actual payments received during the twelve months ended at the end of the respective period for leases no longer accounted for on an accrual basis, (ii) exclude residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis and (iii) reflect the reduction in Avamere’s annual base rent to $30.7 million effective February 1, 2022.
Cash Net Operating Income (“Cash NOI”)*
The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Cash NOI as total revenues less operating expenses and non-cash revenues and expenses. Cash NOI excludes all other financial statement amounts included in net income.
COVID-19 Pandemic Expenses
COVID-19 Pandemic Expenses consist primarily of (i) personal protective equipment costs, (ii) incremental labor costs (including bonuses, hero pay and additional labor needed to implement new health and safety protocols) and (iii) incremental supply costs required to implement new health and safety protocols (e.g., disposable food containers and stronger disinfectants), in each case incurred by communities in our Senior Housing - Managed portfolio specifically as a result of the COVID-19 pandemic.
EBITDARM
Earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses EBITDARM in determining EBITDARM Coverage. EBITDARM has limitations as an analytical tool. EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, EBITDARM does not represent a property’s net income or cash flows from operations and should not be considered an alternative to those indicators. The Company utilizes EBITDARM to evaluate the core operations of the properties by eliminating management fees, which may vary by operator/tenant and operating structure, and as a supplemental measure of the ability of the Company’s operators/tenants and relevant guarantors to generate sufficient liquidity to meet related obligations to the Company.
EBITDARM Coverage
Represents the ratio of EBITDARM to cash rent for owned facilities (excluding Senior Housing - Managed communities) for the period presented. EBITDARM Coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of EBITDARM. EBITDARM Coverage includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful.
Funds From Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”)*
The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations, or FFO, as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“Nareit”), and adjusted funds from operations, or AFFO (and related per share amounts) are
REPORTING DEFINITIONS
important non-GAAP supplemental measures of the Company’s 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. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and the Company’s share of gains or losses from real estate dispositions related to its unconsolidated joint venture, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus the Company’s share of depreciation and amortization related to its unconsolidated joint venture, and real estate impairment charges. AFFO is defined as FFO excluding merger and acquisition costs, stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including ineffectiveness gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and the Company’s share of non-cash adjustments related to its unconsolidated joint venture. The Company believes that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of the Company’s operating results among investors and makes comparisons of operating results among real estate investment trusts more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of real estate investment trusts, 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 and AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than the Company does.
Grant Income
Grant income consists of funds specifically paid to communities in our Senior Housing - Managed portfolio from state or federal governments related to the pandemic and were incremental to the amounts that would have otherwise been received for providing care to residents.
Net Debt*
The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements, net of cash and cash equivalents as reported in the Company’s consolidated financial statements.
Net Debt to Adjusted EBITDA*
Net Debt to Adjusted EBITDA is calculated as Net Debt divided by Annualized Adjusted EBITDA, which is Adjusted EBITDA, as adjusted for annualizing adjustments that give effect to the acquisitions and dispositions completed during the respective period as though such acquisitions and dispositions were completed as of the beginning of the period presented.
Normalized FFO and Normalized AFFO*
Normalized FFO and Normalized AFFO represent FFO and AFFO, respectively, adjusted for certain income and expense items that the Company does not believe are indicative of its ongoing operating results. The Company considers Normalized FFO and Normalized AFFO to be useful measures to evaluate the Company’s operating results excluding these income and expense items to help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized FFO and Normalized AFFO 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. Normalized FFO and Normalized AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of Normalized FFO and Normalized AFFO may not be comparable to Normalized FFO and Normalized AFFO reported by other real estate investment trusts that do not define FFO in accordance
REPORTING DEFINITIONS
with the current Nareit definition or that interpret the current Nareit definition or define FFO and AFFO or Normalized FFO and Normalized AFFO differently than the Company does.
Occupancy Percentage
Occupancy Percentage represents the facilities’ average operating occupancy for the period indicated. The percentages are calculated by dividing the actual census from the period presented by the available beds/units for the same period. Occupancy includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful.
REVPOR
REVPOR represents the average revenues generated per occupied unit per month at Senior Housing - Managed communities for the period indicated. It is calculated as resident fees and services revenues, excluding Grant Income, divided by average monthly occupied unit days. REVPOR includes only Stabilized Facilities.
Senior Housing
Senior Housing communities include independent living, assisted living, continuing care retirement and memory care communities.
Senior Housing - Managed
Senior Housing communities operated by third-party property managers pursuant to property management agreements.
Skilled Mix
Skilled Mix is defined as the total Medicare and non-Medicaid managed care patient revenue at Skilled Nursing/Transitional Care facilities divided by the total revenues at Skilled Nursing/Transitional Care facilities for the period indicated. Skilled Mix includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful.
Skilled Nursing/Transitional Care
Skilled Nursing/Transitional Care facilities include skilled nursing, transitional care, multi-license designation and mental health facilities.
Specialty Hospitals and Other
Includes acute care, long-term acute care, rehabilitation and behavioral hospitals, facilities that provide residential services, which may include assistance with activities of daily living, and other facilities not classified as Skilled Nursing/Transitional Care or Senior Housing.
Stabilized Facility
At the time of acquisition, the Company classifies each facility as either stabilized or non-stabilized. In addition, the Company may classify a facility as non-stabilized after acquisition. Circumstances that could result in a facility being classified as non-stabilized include newly completed developments, facilities undergoing major renovations or additions, facilities being repositioned or transitioned to new operators, and significant transitions within the tenants’ business model. Such facilities are typically reclassified to stabilized upon the earlier of maintaining consistent occupancy (85% for Skilled Nursing/Transitional Care facilities and 90% for Senior Housing communities) or 24 months after the date of classification as non-stabilized. Stabilized Facilities exclude (i) facilities held for sale, (ii) strategic disposition candidates, (iii) facilities being transitioned to a new operator, (iv) facilities being transitioned from being leased by the Company to being operated by the Company and (v) facilities acquired during the three months preceding the period presented.
*Non-GAAP Financial Measures
Reconciliations, definitions and important discussions regarding the usefulness and limitations of the Non-GAAP Financial Measures used in this release can be found at https://ir.sabrahealth.com/investors/financials/quarterly-results.
15
sbraex9922021q4-final
Exhibit 99.2
2 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 03 COMPANY INFORMATION 04 OVERVIEW 05 PORTFOLIO Triple-Net Portfolio Same Store Triple-Net Portfolio Top 10 Relationships Senior Housing - Managed Portfolio Loans and Other Investments | Development Pipeline NOI Concentrations Geographic Concentrations Lease Expirations 14 INVESTMENT ACTIVITY Summary Recent 17 CAPITALIZATION Overview Indebtedness Debt Maturity Credit Metrics and Ratings 21 FINANCIAL INFORMATION Consolidated Financial Statements - Statements of (Loss) Income Consolidated Financial Statements - Balance Sheets Consolidated Financial Statements - Statements of Cash Flows FFO, Normalized FFO, AFFO and Normalized AFFO Components of Net Asset Value (NAV) 27 APPENDIX Disclaimer Reporting Definitions Discussion and Reconciliation of Certain Non-GAAP Financial Measures: CONTENT https://ir.sabrahealth.com/investors/financials/quarterly-results
3 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 SENIOR MANAGEMENT Rick Matros Michael Costa Talya Nevo-Hacohen Chief Executive Officer, President Chief Financial Officer, Secretary Chief Investment Officer, Treasurer and Chair and Executive Vice President and Executive Vice President BOARD OF DIRECTORS Rick Matros Michael Foster Jeffrey Malehorn Chief Executive Officer, President Lead Independent Director Director and Chair Craig Barbarosh Lynne Katzmann Clifton Porter II Director Director Director Katie Cusack Ann Kono Director Director CONTACT INFORMATION Sabra Health Care REIT, Inc. Transfer Agent 18500 Von Karman Avenue American Stock Transfer Suite 550 and Trust Company Irvine, CA 92612 6201 15th Avenue 888.393.8248 Brooklyn, NY 11219 sabrahealth.com COMPANY INFORMATION
4 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 Financial Metrics Dollars in thousands, except per share data December 31, 2021 Three Months Ended Year Ended Revenues $ 135,657 $ 569,545 Net operating income (1) 94,033 432,998 Cash net operating income (1) 109,222 456,933 Diluted per share data: EPS $ (0.11) $ (0.52) FFO 0.11 1.15 Normalized FFO 0.39 1.57 AFFO 0.20 1.35 Normalized AFFO 0.37 1.54 Dividends per common share 0.30 1.20 Capitalization and Market Facts Key Credit Metrics (2) December 31, 2021 December 31, 2021 Common shares outstanding 230.4 million Net Debt to Adjusted EBITDA 4.98x Common equity Market Capitalization $3.1 billion Interest Coverage 5.19x Consolidated Debt $2.4 billion Fixed Charge Coverage Ratio 5.03x Consolidated Enterprise Value $5.4 billion Total Debt/Asset Value 34 % Secured Debt/Asset Value 1 % Common stock closing price $13.54 Unencumbered Assets/Unsecured Debt 291 % Common stock 52-week range $12.31 - $19.02 Common stock ticker symbol SBRA Portfolio (3) Dollars in thousands As of December 31, 2021 Property Count Investment Beds/Units Occupancy Percentage (4) Investment in Real Estate Properties, gross Triple-Net Portfolio: Skilled Nursing / Transitional Care 279 $ 3,617,359 30,920 71.4 % Senior Housing - Leased 60 720,581 4,099 78.1 Specialty Hospitals and Other 28 643,007 1,187 83.2 Total Triple-Net Portfolio 367 4,980,947 36,206 Senior Housing - Managed 49 1,012,398 5,140 79.4 (7) Consolidated Real Estate Investments 416 5,993,345 41,346 Investment in Sales-Type Lease, net 1 25,250 Investments in Loans Receivable, gross (5) 18 342,113 Preferred Equity Investments, gross (6) 8 57,055 Includes 76 relationships in 41 U.S. states and CanadaTotal Investments 443 $ 6,417,763 (1) Balance includes $0.5 million of Grant Income for the year ended December 31, 2021 and $3.2 million and $9.8 million of COVID-19 Pandemic Expenses for the three months and year ended December 31, 2021, respectively. (2) See page 20 of this supplement for important information about these credit metrics. (3) Excludes our unconsolidated joint venture which consists of 158 facilities and 7,056 units. (4) Occupancy Percentage is presented for the trailing twelve month period and one quarter in arrears, except for our Senior Housing - Managed portfolio, which is presented for the current period on a trailing three month basis. (5) Our loans receivable investments include one investment which has a right of first offer on six addiction treatment centers with 928 beds and one investment which has a purchase option on one Senior Housing development with 21 units. (6) Our preferred equity investments include investments in entities owning six Senior Housing developments with 812 aggregate units and one Skilled Nursing/Transitional Care development with 120 beds. (7) Reflects Occupancy Percentage of 74.7% and 80.7% for assisted living and independent living communities in our Senior Housing - Managed portfolio, respectively. OVERVIEW
5 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 Senior Housing - Leased Number of Properties 65 65 62 61 60 Number of Units 4,282 4,217 4,147 4,079 4,099 Cash NOI $ 11,966 $ 12,541 $ 12,561 $ 12,412 $ 12,097 Occupancy 83.1 % 81.0 % 78.5 % 78.1 % 78.1 % Triple-Net Portfolio — Operating Statistics (1) Dollars in thousands 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Skilled Nursing/Transitional Care Number of Properties 287 285 283 282 279 Number of Beds 31,761 31,533 31,321 31,245 30,920 Cash NOI $ 74,571 $ 76,195 $ 74,387 $ 74,640 $ 71,726 Occupancy 77.3 % 74.9 % 72.0 % 71.1 % 71.4 % Skilled Mix 39.5 % 39.6 % 40.0 % 40.1 % 39.8 % Specialty Hospitals and Other Number of Properties 27 28 29 29 28 Number of Beds 1,092 1,228 1,228 1,228 1,187 Cash NOI $ 13,317 $ 13,826 $ 13,946 $ 14,005 $ 14,082 Occupancy 75.3 % 77.3 % 81.9 % 83.1 % 83.2 % PORTFOLIO Triple-Net Portfolio Triple-Net Portfolio Dollars in thousands As of December 31, 2021 Skilled Nursing/ Transitional Care Senior Housing - Leased Specialty Hospitals and Other Total Number of Properties 279 60 28 367 Number of Beds/Units 30,920 4,099 1,187 36,206 Investment $ 3,617,359 $ 720,581 $ 643,007 $ 4,980,947 (1) Occupancy Percentage and Skilled Mix (together, “Operating Statistics”) and EBITDARM Coverage for each period presented include only Stabilized Facilities owned by the Company as of the end of such period and only for the duration such facilities were owned by the Company and classified as Stabilized Facilities. In addition, EBITDARM Coverage and Operating Statistics are presented for the twelve months ended at the end of the respective period and one quarter in arrears, and therefore, EBITDARM Coverage and Operating Statistics exclude assets acquired after September 30, 2021. (2) Effective February 1, 2022, Avamere’s annual base rent on the current portfolio has been reduced to $30.7 million from $44.1 million. Pro forma EBITDARM Coverage illustrates the impact of this rent reduction on our historical trailing twelve-month EBITDARM Coverages for Avamere, our Skilled Nursing/Transitional Care portfolio and our aggregate Post Acute and Other portfolio. Triple-Net Portfolio — EBITDARM Coverage (1) 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Skilled Nursing/Transitional Care 1.93x 1.99x 1.99x 1.78x 1.77x Specialty Hospitals and Other 3.55x 3.67x 3.91x 3.86x 3.83x Aggregate Acute/Post Acute and Other 2.17x 2.25x 2.27x 2.09x 2.08x Senior Housing - Leased 1.25x 1.23x 1.12x 1.09x 1.04x Triple-Net Portfolio — Pro Forma EBITDARM Coverage (1)(2) 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Skilled Nursing/Transitional Care 2.02x 2.09x 2.09x 1.87x 1.86x Specialty Hospitals and Other 3.55x 3.67x 3.91x 3.86x 3.83x Aggregate Acute/Post Acute and Other 2.26x 2.34x 2.37x 2.18x 2.16x
6 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 PORTFOLIO Same Store Triple-Net Portfolio (1) Same store triple-net portfolio includes all facilities held for investment for the full period in both comparison periods. (2) Same store EBITDARM Coverage and Operating Statistics are presented for the twelve months ended at the end of the respective period and one quarter in arrears for Stabilized Facilities owned for the full period in both comparison periods. (3) Effective February 1, 2022, Avamere’s annual base rent on the current portfolio has been reduced to $30.7 million from $44.1 million. Pro forma EBITDARM Coverage illustrates the impact of this rent reduction on our historical trailing twelve-month EBITDARM Coverages for Avamere, our Skilled Nursing/Transitional Care portfolio and our aggregate Post Acute and Other portfolio. Same Store Triple-Net Portfolio (1) Dollars in thousands Number of Properties Number of Beds/Units Cash NOI 4Q 2021 3Q 2021 4Q 2021 3Q 2021 Skilled Nursing/Transitional Care 279 30,920 30,920 $ 71,645 $ 74,182 Senior Housing - Leased 59 3,986 3,986 $ 11,617 $ 12,187 Specialty Hospitals and Other 27 1,187 1,187 $ 12,978 $ 12,665 Same Store Triple-Net Portfolio — EBITDARM Coverage (2) 4Q 2021 3Q 2021 Skilled Nursing/Transitional Care 1.79x 1.81x Specialty Hospitals and Other 3.73x 3.82x Aggregate Acute/Post Acute and Other 2.09x 2.12x Senior Housing - Leased 1.03x 1.08x Same Store Triple-Net Portfolio — Operating Statistics (2) Occupancy Skilled Mix 4Q 2021 3Q 2021 4Q 2021 3Q 2021 Skilled Nursing/Transitional Care 71.9 % 71.7 % 40.1 % 40.4 % Senior Housing - Leased 77.9 % 78.1 % N/A N/A Specialty Hospitals and Other 81.9 % 82.3 % N/A N/A Same Store Triple-Net Portfolio — Pro Forma EBITDARM Coverage (2)(3) 4Q 2021 3Q 2021 Skilled Nursing/Transitional Care 1.88x 1.90x Specialty Hospitals and Other 3.73x 3.82x Aggregate Acute/Post Acute and Other 2.18x 2.21x
7 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 PORTFOLIO Top 10 Relationships (1) Top 10 Relationships Tenant/Borrower Credit Exposure Senior Housing - Managed Operator Exposure As of December 31, 2021 EBITDARM Coverage Twelve Months Ended (2) As of December 31, 2021 Relationship Primary Facility Type Number of Sabra Investments % of Annualized Cash NOI December 31, 2021 September 30, 2021 Number of Sabra Investments % of Annualized Cash NOI North American Healthcare Skilled Nursing 24 8.6 % 1.44x 1.43x — — Signature Healthcare Skilled Nursing 45 8.4 % 1.81x 1.89x — — Avamere Family of Companies Skilled Nursing 27 6.8 % 1.33x 1.40x — — Signature Behavioral Behavioral Hospitals 5 6.8 % 1.85x 1.99x — — Recovery Centers of America Addiction Treatment 3 5.3 % N/A N/A — — Holiday AL Holdings LP Independent Living — — N/A N/A 22 4.5 % Cadia Healthcare (3) Skilled Nursing 10 4.3 % 1.81x 1.76x — — Healthmark Group Skilled Nursing 20 3.9 % 1.65x 1.94x — — The McGuire Group Skilled Nursing 7 3.6 % 2.44x 2.24x — — CommuniCare (4) Skilled Nursing 14 3.5 % 1.72x 1.75x — — Top 10 relationships 155 51.2 % 1.68x 1.73x 22 4.5 % Remaining 66 relationships 239 40.3 % 2.31x 2.32x 27 4.0 % Total 394 91.5 % 1.95x 1.96x 49 8.5 % (1) Excludes our unconsolidated joint venture which consists of 158 facilities and 7,056 units. (2) EBITDARM Coverage is presented for Stabilized Facilities operated by the applicable tenant and is presented one quarter in arrears. (3) EBITDARM Coverage excludes one non-stabilized facility with no Annualized Cash NOI. (4) EBITDARM Coverage excludes two non-stabilized facilities representing 0.2% of Annualized Cash NOI. (5) Effective February 1, 2022, Avamere’s annual base rent on the current portfolio has been reduced to $30.7 million from $44.1 million. Pro forma EBITDARM Coverage illustrates the impact of this rent reduction on our historical trailing twelve-month EBITDARM Coverages for Avamere, our Top 10 relationships and our total portfolio. EBITDARM Coverage - Pro Forma (5) EBITDARM Coverage Twelve Months Ended (2) December 31, 2021 September 30, 2021 Avamere Family of Companies 1.87x 1.99x Top 10 relationships 1.79x 1.85x Total 2.02x 2.04x
8 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 PORTFOLIO Senior Housing - Managed Portfolio (1) (1) Excludes our unconsolidated joint venture which consists of 158 facilities and 7,056 units. (2) REVPOR and Occupancy Percentage are presented for the three months ended at the end of the respective period and include only Stabilized Facilities owned by the Company as of the end of such period and only for the duration such facilities were owned by the Company and classified as Stabilized Facilities. In addition, revenues, Cash NOI and REVPOR have been adjusted for changes in the foreign currency exchange rate where applicable. (3) Balances related to properties in Canada are based on the exchange rate as of the end of the period presented. The exchange rate as of December 31, 2021 was $0.7875 per 1 CAD. (4) Revenues and Cash NOI balances include $0.6 million and $0.5 million of Grant Income for 4Q 2020 and 2Q 2021, respectively; Cash NOI balances also include $1.0 million, $0.9 million, $0.4 million, $0.8 million and $1.5 million of COVID-19 Pandemic Expenses for 4Q 2020, 1Q 2021, 2Q 2021, 3Q 2021 and 4Q 2021, respectively. (5) Same store Senior Housing - Managed portfolio includes all facilities owned for the full period in all comparison periods. Same store REVPOR and Occupancy Percentage are presented for the three months ended at the end of the respective period for Stabilized Facilities owned for the full period in all comparison periods. In addition, revenues, Cash NOI and REVPOR have been adjusted for changes in the foreign currency exchange rate where applicable. Senior Housing - Managed Portfolio by Operator (2) Dollars in thousands, except REVPOR As of December 31, 2021 Holiday Sienna Other TotalEnlivant Property Type IL AL IL AL AL / IL Number of Properties 22 11 8 8 49 Number of Units 3,117 631 757 635 5,140 Investment (3) $ 595,079 $ 130,226 $ 135,534 $ 151,559 $ 1,012,398 Capital Expenditures: (3) Recurring $ 2,541 $ 140 $ 355 $ 182 $ 3,218 Non-recurring $ — $ 729 $ 362 $ 172 $ 1,263 Resident fees and services (4) $ 18,743 $ 8,636 $ 4,777 $ 8,378 $ 40,534 Cash NOI (4) $ 5,131 $ (23) $ 1,373 $ 1,680 $ 8,161 Cash NOI Margin % 27.4 % (0.3) % 28.7 % 20.1 % 20.1 % REVPOR $ 2,513 $ 6,291 $ 2,655 $ 5,866 $ 3,303 Occupancy 81.1 % 72.5 % 79.2 % 77.8 % 79.4 % Senior Housing - Managed Portfolio (2) Dollars in thousands, except REVPOR 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Number of Properties 47 48 49 49 49 Number of Units 4,924 5,024 5,140 5,140 5,140 Capital Expenditures: (3) Recurring $ 3,232 $ 1,356 $ 1,863 $ 3,621 $ 3,218 Non-recurring $ 685 $ 181 $ 332 $ 960 $ 1,263 Resident fees and services (4) $ 38,343 $ 36,071 $ 38,951 $ 39,813 $ 40,534 Cash NOI (4) $ 10,199 $ 7,104 $ 10,172 $ 9,056 $ 8,161 Cash NOI Margin % 26.6 % 19.7 % 26.1 % 22.7 % 20.1 % REVPOR - AL $ 6,061 $ 5,907 $ 5,908 $ 5,945 $ 6,111 REVPOR - IL $ 2,529 $ 2,553 $ 2,544 $ 2,531 $ 2,542 Occupancy - AL 77.9 % 69.6 % 72.8 % 75.5 % 74.7 % Occupancy - IL 80.5 % 79.0 % 78.6 % 79.8 % 80.7 % Same Store Senior Housing - Managed Portfolio (5) Dollars in thousands, except REVPOR 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Number of Properties 47 47 47 47 47 Resident fees and services (4) $ 38,343 $ 35,675 $ 36,636 $ 37,002 $ 37,852 Cash NOI (4) $ 10,199 $ 6,945 $ 9,316 $ 8,246 $ 7,374 Cash NOI Margin % 26.6 % 19.5 % 25.4 % 22.3 % 19.5 % REVPOR - AL $ 6,061 $ 5,951 $ 6,028 $ 6,065 $ 6,247 REVPOR - IL $ 2,529 $ 2,553 $ 2,544 $ 2,531 $ 2,542 Occupancy - AL 77.9 % 68.8 % 70.8 % 73.5 % 73.3 % Occupancy - IL 80.5 % 79.0 % 78.6 % 79.8 % 80.7 %
9 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 PORTFOLIO Loans and Other Investments | Development Pipeline Loans Receivable and Other Investments Dollars in thousands As of December 31, 2021 Loan Type Number of Loans Property Type Principal Balance Book Value Weighted Average Contractual Interest Rate Weighted Average Annualized Effective Interest Rate Interest Income Three Months Ended December 31, 2021 (1) Maturity Date Mortgage 2 Specialty Hospital $ 309,000 $ 309,000 7.7 % 7.7 % $ 5,138 11/01/26 - 01/31/27 Construction 1 Senior Housing 3,343 3,347 8.0 % 7.8 % 68 09/30/22 Other 15 Multiple 39,816 36,028 6.8 % 6.1 % 581 01/31/22 - 08/31/28 18 352,159 348,375 7.6 % 7.5 % $ 5,787 Allowance for loan losses — (6,344) $ 352,159 $ 342,031 Other Investment Type Number of Investments Property Type Total Funding Commitments Total Amount Funded Book Value Rate of Return Other Income Three Months Ended December 31, 2021 (1) Preferred Equity 8 Skilled Nursing / Senior Housing $ 73,493 $ 46,514 $ 57,055 11.1 % $ 1,499 (1) Includes income related to loans receivable and other investments held as of December 31, 2021. (2) Includes projects invested in or committed to as of December 31, 2021. (3) Investment amount excludes accrued and unpaid interest receivable. (4) Certificate of occupancy timing represents the period in which the certificate of occupancy has been received for a development project where construction has been completed or when the certificate of occupancy is expected to be received for a development project that is currently under construction. Proprietary Development Pipeline (2) Dollars in thousands Estimated Real Estate Value Upon Completion As of December 31, 2021 Investment Type Property Type Investment Amount (3) Estimated Weighted Average Initial Cash Yield Certificate of Occupancy Timing (4)State Loan Preferred Equity Skilled Nursing/ Transitional Care Senior Housing Skilled Nursing/ Transitional Care Senior Housing Skilled Nursing/ Transitional Care Senior Housing Indiana — 1 — 1 $ — $ 8,068 $ — $ 38,000 6.0 % Q3 2017 Missouri — 1 — 1 — 9,302 — 73,300 6.5 % Q4 2022 Ohio — 2 — 2 — 12,013 — 64,000 7.0 % Q1 2018- Q4 2019 Texas — 1 1 — 3,611 — 14,475 — 9.0 % Q3 2016 — 5 1 4 $ 3,611 $ 29,383 $ 14,475 $ 175,300 6.8 %
10 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 Signature Healthcare: 8.4% Avamere Family of Companies: 6.8% Signature Behavioral: 6.8% Recovery Centers of America: 5.3% Managed (No Operator Credit Exposure): 8.5% Other: 55.6% North American Healthcare: 8.6% RELATIONSHIP CONCENTRATION ASSET CLASS CONCENTRATION PAYOR SOURCE CONCENTRATION (2) PORTFOLIO NOI Concentrations (1) As of December 31, 2021 (1) Concentrations exclude our unconsolidated joint venture which consists of 158 facilities and 7,056 units. Relationship and asset class concentrations include real estate investments and investments in loans receivable and other investments. Relationship concentrations use Annualized Cash NOI, and asset class concentrations use Annualized Cash NOI, as adjusted to reflect Annualized Cash NOI from our sales-type lease, mortgage and construction loans receivable and preferred equity investments in the related asset class of the underlying real estate. Payor source concentration excludes Annualized Cash NOI from investments in loans receivable and other investments. (2) Tenant payor source allocation presented one quarter in arrears. Holiday 4.5% Enlivant 1.2%Other 2.8% Specialty Hospital and Other: 17.0% Senior Housing - Leased: 12.6% Senior Housing - Managed: 8.5% Other: 0.5% Skilled Nursing/ Transitional Care: 61.4% Private Pay: 40.2% Non-Private: 59.8%
11 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 PORTFOLIO Geographic Concentrations (1) Property Type As of December 31, 2021 Location Skilled Nursing/ Transitional Care Senior Housing - Leased Senior Housing - Managed Specialty Hospitals and Other Total % of Total Texas 38 9 6 13 66 15.9 % California 24 1 1 4 30 7.2 Kentucky 25 1 — 2 28 6.7 Indiana 13 4 — 2 19 4.6 Oregon 15 4 — — 19 4.6 Washington 15 1 1 — 17 4.1 Massachusetts 17 — — — 17 4.1 North Carolina 13 — 2 — 15 3.6 Missouri 13 — 1 — 14 3.3 Michigan 1 9 1 — 11 2.6 Other (31 states & Canada) 105 31 37 7 180 43.3 Total 279 60 49 28 416 100.0 % % of Total 67.1 % 14.4 % 11.8 % 6.7 % 100.0 % Distribution of Beds/Units As of December 31, 2021 Property Type Location Total Number of Properties Skilled Nursing/ Transitional Care Senior Housing - Leased Senior Housing - Managed Specialty Hospitals and Other Total % of Total Texas 66 4,666 577 856 325 6,424 15.5 % Kentucky 28 2,598 142 — 100 2,840 6.9 California 30 2,058 58 102 340 2,558 6.2 Massachusetts 17 2,133 — — — 2,133 5.2 Indiana 19 1,439 545 — 48 2,032 4.9 Oregon 19 1,520 377 — — 1,897 4.6 Washington 17 1,591 52 113 — 1,756 4.2 North Carolina 15 1,454 — 237 — 1,691 4.1 New York 10 1,566 — 107 — 1,673 4.0 Missouri 14 1,075 — 184 — 1,259 3.1 Other (31 states & Canada) 181 10,820 2,348 3,541 374 17,083 41.3 Total 416 30,920 4,099 5,140 1,187 41,346 100.0 % % of Total 74.8 % 9.9 % 12.4 % 2.9 % 100.0 % (1) Excludes our unconsolidated joint venture which consists of 158 facilities and 7,056 units.
12 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 PORTFOLIO Geographic Concentrations Continued (1) Investment Dollars in thousands As of December 31, 2021 Property Type Location Total Number of Properties Skilled Nursing/ Transitional Care Senior Housing - Leased Senior Housing - Managed Specialty Hospitals and Other Total % of Total Texas 66 $ 382,335 $ 81,305 $ 183,920 $ 187,387 $ 834,947 13.9 % California 30 435,612 18,496 38,352 225,412 717,872 12.0 Oregon 19 261,316 86,860 — — 348,176 5.8 Maryland 8 330,901 — — — 330,901 5.5 New York 10 297,573 — 20,218 — 317,791 5.3 Kentucky 28 233,896 23,669 — 39,687 297,252 5.0 Indiana 19 169,222 114,692 — 12,155 296,069 4.9 Washington 17 188,878 10,686 27,900 — 227,464 3.8 Arizona 8 24,281 10,348 38,767 121,757 195,153 3.3 North Carolina 15 123,462 — 69,095 — 192,557 3.2 Other (31 states & Canada) (2) 196 1,169,883 374,525 634,146 56,609 2,235,163 37.3 Total 416 $ 3,617,359 $ 720,581 $ 1,012,398 $ 643,007 $ 5,993,345 100.0 % % of Total 60.4 % 12.0 % 16.9 % 10.7 % 100.0 % (1) Excludes our unconsolidated joint venture which consists of 158 facilities and 7,056 units. (2) Investment balance in Canada is based on the exchange rate as of December 31, 2021 of $0.7875 per 1 CAD.
13 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 PORTFOLIO Lease Expirations Lease Expirations (1) Dollars in thousands Skilled Nursing/ Transitional Care Senior Housing - Leased Specialty Hospitals and Other Total Annualized RevenuesAs of December 31, 2021 % of Total 2022 $ 7,522 $ 5,691 $ — $ 13,213 3.5 % 2023 9,274 — — 9,274 2.4 % 2024 11,365 2,493 — 13,858 3.6 % 2025 11,255 3,208 1,374 15,837 4.2 % 2026 17,578 1,337 — 18,915 5.0 % 2027 39,993 — — 39,993 10.5 % 2028 15,177 6,834 3,210 25,221 6.6 % 2029 57,289 5,928 5,842 69,059 18.1 % 2030 13,035 — 3,035 16,070 4.2 % 2031 89,202 5,504 1,119 95,825 25.2 % Thereafter 5,142 20,161 38,330 63,633 16.7 % Total Annualized Revenues $ 276,832 $ 51,156 $ 52,910 $ 380,898 100.0 % (1) Excludes Senior Housing - Managed communities.
14 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 INVESTMENT ACTIVITY Summary Investment Activity Dollars in thousands Investment Initial Investment Date Property Type Number of Properties Beds/Units 2021 Amounts Invested (1) Rate of Return/ Initial Cash Yield Real Estate The Claiborne at West Lake (2) 03/05/21 Senior Housing - Managed 1 100 $ 26,500 7.60 % Landmark Pensacola (3) 03/15/21 Specialty Hospitals and Other 1 60 2,000 9.00 % Baxter Senior Living (4) 05/01/21 Senior Housing - Managed 1 116 32,500 7.75 % Signature Healthcare of Elizabethtown (5) 05/27/21 Skilled Nursing/ Transitional Care 1 124 5,123 8.50 % Legacy - Jasper 10/01/21 Senior Housing - Leased 1 113 26,250 6.93 % Recovery Centers of America at Greenville (6) 12/16/21 Specialty Hospitals and Other 1 132 10,850 7.50 % Additions to Real Estate (7) Various Multiple N/A N/A 17,157 8.25 % Total Real Estate Investments 120,380 7.64 % Preferred Equity Shelbourne - Chesterfield (8) 06/21/21 Senior Housing 1 150 9,022 10.00 % Dwight Mortgage Trust (9) N/A N/A N/A N/A — 10.00 % Total Preferred Equity Investments 9,022 10.00 % Loans Receivable Recovery Centers of America (10) 10/15/21 Specialty Hospitals and Other 6 928 290,000 7.50 % All Investments through December 31, 2021 $ 419,402 7.59 % Subsequent to December 31, 2021: Real Estate Traditions of Deerfield (11) 02/01/22 Senior Housing - Managed 1 126 $ 26,000 8.00 % (1) Excludes capitalized acquisition costs and origination fees. (2) Transaction includes a potential earnout of up to $5.5 million if certain performance metrics are achieved after one year. Yield assumes maximum earnout payment and estimated post-earnout trailing 3-month Cash NOI. (3) Bed count reflects expected capacity at the completion of a $3.2 million construction project currently in progress. (4) Transaction includes a potential earnout if certain performance metrics are achieved after 18 months. Yield assumes estimated earnout payment and estimated post-earnout trailing 3-month Cash NOI. (5) Bed count reflects expected capacity at the completion of a $19.6 million construction project currently in progress. (6) Bed count reflects expected capacity at the completion of a $22.5 million construction project currently in progress. (7) Excludes capital expenditures for the Senior Housing - Managed portfolio and recurring capital expenditures for the Triple-Net portfolio. (8) Unit count reflects expected capacity at the completion of development. Sabra has the option to purchase the development at fair market value upon achievement of specified milestones. (9) Transaction includes a $25.0 million total commitment to invest over time in a fund of bridge-to-HUD loans. Rate of return is shown net of expected fees. (10) Transaction provides Sabra a right of first offer to acquire the underlying facilities and includes an additional $35.0 million commitment to be secured by two additional properties with 232 aggregate beds currently in lease-up which is to be funded after specific performance metrics are achieved by the portfolio and by the two additional properties currently in lease-up. (11) Amount invested reflects the gross investment, of which $5.6 million was used to repay our preferred equity investment. Transaction includes a potential earnout if certain performance metrics are achieved after 18 months. Yield assumes estimated earnout payment and estimated post-earnout trailing 3-month Cash NOI.
15 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 RECOVERY CENTERS OF AMERICA AT GREENVILLE Investment Date Beds (1) December 16, 2021 132 Investment Amount Property Type $33.4 million ($10.9 million as of December 31, 2021) Specialty Hospitals and Other Investment Type Annualized GAAP Income (1) Real Estate $2.8 million Number of Properties Initial Cash Yield 1 7.50% Location South Carolina INVESTMENT ACTIVITY Recent (1) Reflects amounts expected at the completion of a $22.5 million construction project currently in progress and estimated to be completed in late 2022.
16 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 TRADITIONS OF DEERFIELD From Proprietary Development Pipeline Investment Date Units February 1, 2022 126 Investment Amount (1) Property Type $26.0 million Senior Housing - Managed Investment Type Estimated Stabilized Cash Yield (2) Real Estate 8.00% Number of Properties Manager 1 Traditions Management Location Ohio INVESTMENT ACTIVITY Recent (1) Gross investment of $26.0 million, of which $5.6 million was used to repay our preferred equity investment in this property. (2) Transaction includes a potential earnout if certain performance metrics are achieved after 18 months. Yield assumes estimated earnout payment and estimated post-earnout trailing 3-month Cash NOI.
17 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 CAPITALIZATION Overview Consolidated Debt Dollars in thousands As of December 31, 2021 Secured debt $ 67,602 Revolving credit facility — Term loans 598,438 Senior unsecured notes 1,750,000 Total 2,416,040 Deferred financing costs and premiums/discounts, net (21,565) Total, net $ 2,394,475 Revolving Credit Facility Dollars in thousands As of December 31, 2021 Credit facility availability $ 1,000,000 Credit facility capacity 1,000,000 Enterprise Value Dollars in thousands, except per share amounts As of December 31, 2021 Shares Outstanding Price Value Common stock 230,398,655 $ 13.54 $ 3,119,598 Consolidated Debt 2,416,040 Cash and cash equivalents (111,996) Consolidated Enterprise Value $ 5,423,642 Common Stock and Equivalents Weighted Average Common Shares Three Months Ended December 31, 2021 Year Ended December 31, 2021 EPS FFO and Normalized FFO AFFO and Normalized AFFO EPS FFO and Normalized FFO AFFO and Normalized AFFO Common stock 227,507,307 227,507,307 227,507,307 219,060,563 219,060,563 219,060,563 Common equivalents 12,464 12,464 12,464 12,464 12,464 12,464 Basic common and common equivalents 227,519,771 227,519,771 227,519,771 219,073,027 219,073,027 219,073,027 Dilutive securities: Restricted stock units — 1,071,307 1,472,332 — 1,007,437 1,431,386 Forward equity sale agreements — — — — 22,099 22,099 Diluted common and common equivalents 227,519,771 228,591,078 228,992,103 219,073,027 220,102,563 220,526,512 At-The-Market Common Stock Offering Program Dollars in thousands, except per share amounts Three Months Ended December 31, 2021 Shares issued 1,698,179 Net proceeds $ 24,168 Weighted average price per share $ 14.23 Availability as of December 31, 2021 $ 475,033
18 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 CAPITALIZATION Indebtedness Fixed | Variable Rate Debt Dollars in thousands Weighted Average Interest Rate (1)As of December 31, 2021 Principal % of Total Fixed Rate Debt Secured debt $ 67,602 3.42 % 2.8 % Unsecured senior notes 1,750,000 4.04 % 72.4 % Total fixed rate debt 1,817,602 4.02 % 75.2 % Variable Rate Debt Term loans (2) 598,438 2.27 % 24.8 % Consolidated Debt $ 2,416,040 3.59 % 100.0 % Secured | Unsecured Debt Dollars in thousands Weighted Average Interest Rate (1)As of December 31, 2021 Principal % of Total Secured Debt Secured debt $ 67,602 3.42 % 2.8 % Unsecured Debt Unsecured senior notes 1,750,000 4.04 % 72.4 % Term loans 598,438 2.27 % 24.8 % Total unsecured debt 2,348,438 3.59 % 97.2 % Consolidated Debt $ 2,416,040 3.59 % 100.0 % (1) Weighted average interest rate includes private mortgage insurance and impact of interest rate derivative agreements. (2) Term loans include $436.3 million subject to swap agreements that fix and collar agreements that set a cap and floor for LIBOR at a weighted average rate of 1.14%, and $98.4 million (CAD $125.0 million) subject to swap agreements that fix CDOR at 1.10%. Excluding these amounts, variable rate debt was 2.6% of Consolidated Debt as of December 31, 2021.
19 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 CAPITALIZATION Debt Maturity Debt Maturity Schedule Dollars in thousands Secured Debt Unsecured Senior Notes Term Loans Revolving Credit Facility (1) Consolidated Debt As of December 31, 2021 Principal Rate (2) Principal Rate (2) Principal Rate (2) Principal Rate (2) Principal Rate (2) 2022 $ 17,479 2.91 % $ — — $ — — $ — — $ 17,479 2.91 % 2023 1,979 2.84 % — — — — — 1.20 % 1,979 2.84 % 2024 2,034 2.85 % — — 598,438 1.41 % — — 600,472 1.41 % 2025 2,089 2.86 % — — — — — — 2,089 2.86 % 2026 2,147 2.86 % 500,000 5.13 % — — — — 502,147 5.12 % 2027 2,206 2.87 % 100,000 5.88 % — — — — 102,206 5.82 % 2028 2,266 2.88 % — — — — — — 2,266 2.88 % 2029 2,328 2.89 % 350,000 3.90 % — — — — 352,328 3.89 % 2030 2,392 2.90 % — — — — — — 2,392 2.90 % 2031 2,093 2.92 % 800,000 3.20 % — — — — 802,093 3.20 % Thereafter 30,589 3.08 % — — — — — — 30,589 3.08 % Total 67,602 1,750,000 598,438 — 2,416,040 Discount, net — (2,882) — — (2,882) Deferred financing costs, net (939) (13,552) (4,192) — (18,683) Total, net $ 66,663 $ 1,733,566 $ 594,246 $ — $ 2,394,475 Wtd. avg. maturity/years 17.6 7.7 2.7 1.7 6.8 Wtd. avg. interest rate (3) 3.42 % 4.04 % 2.27 % 1.20 % 3.59 % (1) Revolving Credit Facility is subject to two six-month extension options. (2) Represents actual contractual interest rates excluding private mortgage insurance and impact of interest rate derivative agreements. (3) Weighted average interest rate includes private mortgage insurance and impact of interest rate derivative agreements.
20 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 Key Credit Metrics (1) December 31, 2021 December 31, 2020 Net Debt to Adjusted EBITDA (2) 4.98x 4.88x Interest Coverage (2) 5.19x 5.32x Fixed Charge Coverage Ratio (2) 5.03x 5.14x Total Debt/Asset Value 34 % 35 % Secured Debt/Asset Value 1 % 1 % Unencumbered Assets/Unsecured Debt 291 % 282 % Cost of Permanent Consolidated Debt (3) 3.59 % 3.65 % Unsecured Notes Ratings S&P (Stable outlook) BBB- Fitch (Stable outlook) BBB- Moody's (Stable outlook) Ba1 CAPITALIZATION Credit Metrics and Ratings (1) Key credit statistics (except Net Debt to Adjusted EBITDA) are calculated in accordance with the credit agreement relating to the revolving credit facility and the indentures relating to our unsecured senior notes. (2) Based on the trailing twelve month period ended as of the date indicated. (3) Excludes revolving credit facility balance that had an interest rate of 1.20% and 1.24% as of December 31, 2021 and 2020, respectively.
21 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 FINANCIAL INFORMATION Consolidated Financial Statements Consolidated Statements of (Loss) Income Dollars in thousands, except per share data Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Revenues: Rental and related revenues (1) $ 87,183 $ 110,733 $ 396,716 $ 430,584 Interest and other income 7,940 3,184 17,317 11,940 Resident fees and services 40,534 38,137 155,512 156,045 Total revenues 135,657 152,054 569,545 598,569 Expenses: Depreciation and amortization 45,079 44,158 178,991 176,737 Interest 25,676 24,524 98,632 100,424 Triple-net portfolio operating expenses 5,011 5,109 20,221 20,590 Senior housing - managed portfolio operating expenses 32,373 27,987 120,980 110,963 General and administrative 8,237 8,105 34,669 32,755 Provision for loan losses and other reserves 2,045 1,149 3,935 1,855 Impairment of real estate 9,004 849 9,499 4,003 Total expenses 127,425 111,881 466,927 447,327 Other income (expense): Loss on extinguishment of debt (32,862) — (34,622) (531) Other (expense) income (13) (154) 373 2,154 Net gain on sales of real estate 14,085 33 12,301 2,861 Total other (expense) income (18,790) (121) (21,948) 4,484 (Loss) income before loss from unconsolidated joint venture and income tax (expense) benefit (10,558) 40,052 80,670 155,726 Loss from unconsolidated joint venture (13,264) (3,562) (192,081) (16,599) Income tax (expense) benefit (531) 627 (1,845) (710) Net (loss) income $ (24,353) $ 37,117 $ (113,256) $ 138,417 Net (loss) income, per: Basic common share $ (0.11) $ 0.18 $ (0.52) $ 0.67 Diluted common share $ (0.11) $ 0.18 $ (0.52) $ 0.67 Weighted-average number of common shares outstanding, basic 227,519,771 208,101,883 219,073,027 206,223,503 Weighted-average number of common shares outstanding, diluted 227,519,771 209,322,132 219,073,027 207,252,830 (1) See page 22 for additional details regarding Rental and related revenues.
22 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 FINANCIAL INFORMATION Consolidated Financial Statements Consolidated Statements of (Loss) Income - Supplemental Information Dollars in thousands, except per share data Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Cash rental income $ 99,023 $ 99,779 $ 404,503 $ 405,257 Straight-line rental income 1,945 3,711 13,059 17,360 Straight-line rental income receivable write-offs (157) — (25,370) (13,750) Above/below market lease amortization 1,091 2,088 5,076 7,911 Above/below market lease intangible amortization acceleration (18,588) — (18,588) (7,063) Operating expense recoveries 3,869 5,155 18,036 20,869 Rental and related revenues $ 87,183 $ 110,733 $ 396,716 $ 430,584
23 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 FINANCIAL INFORMATION Consolidated Financial Statements Consolidated Balance Sheets Dollars in thousands, except per share data December 31, 2021 2020 Assets Real estate investments, net of accumulated depreciation of $831,324 and $681,657 as of December 31, 2021 and 2020, respectively $ 5,162,884 $ 5,285,038 Loans receivable and other investments, net 399,086 102,839 Investment in unconsolidated joint venture 96,680 288,761 Cash and cash equivalents 111,996 59,076 Restricted cash 3,890 6,447 Lease intangible assets, net 54,063 82,796 Accounts receivable, prepaid expenses and other assets, net 138,108 160,646 Total assets $ 5,966,707 $ 5,985,603 Liabilities Secured debt, net $ 66,663 $ 79,065 Term loans, net 594,246 1,044,916 Senior unsecured notes, net 1,733,566 1,248,393 Accounts payable and accrued liabilities 142,989 146,276 Lease intangible liabilities, net 49,713 57,725 Total liabilities 2,587,177 2,576,375 Equity Preferred stock, $0.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2021 and 2020 — — Common stock, $0.01 par value; 500,000,000 shares authorized, 230,398,655 and 210,560,815 shares issued and outstanding as of December 31, 2021 and 2020, respectively 2,304 2,106 Additional paid-in capital 4,482,451 4,163,228 Cumulative distributions in excess of net income (1,095,204) (716,195) Accumulated other comprehensive loss (10,021) (39,911) Total equity 3,379,530 3,409,228 Total liabilities and equity $ 5,966,707 $ 5,985,603
24 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 FINANCIAL INFORMATION Consolidated Financial Statements Consolidated Statements of Cash Flows Dollars in thousands Year Ended December 31, 2021 2020 Cash flows from operating activities: Net (loss) income $ (113,256) $ 138,417 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 178,991 176,737 Non-cash rental and related revenues 25,823 (4,458) Non-cash interest income (1,988) (2,351) Non-cash interest expense 8,368 8,418 Stock-based compensation expense 7,914 7,907 Loss on extinguishment of debt 34,622 531 Provision for loan losses and other reserves 3,935 1,855 Net gain on sales of real estate (12,301) (2,861) Impairment of real estate 9,499 4,003 Other-than-temporary impairment of unconsolidated joint venture 164,126 — Loss from unconsolidated joint venture 27,955 16,599 Distributions of earnings from unconsolidated joint venture — 12,795 Changes in operating assets and liabilities: Accounts receivable, prepaid expenses and other assets, net 8,223 (6,398) Accounts payable and accrued liabilities 14,479 3,658 Net cash provided by operating activities 356,390 354,852 Cash flows from investing activities: Acquisition of real estate (99,448) (92,945) Origination and fundings of loans receivable (290,000) (1,651) Origination and fundings of preferred equity investments (9,061) (20,069) Additions to real estate (42,651) (47,354) Repayments of loans receivable 2,949 4,093 Repayments of preferred equity investments 1,292 3,419 Net proceeds from the sales of real estate 100,723 16,751 Distributions in excess of earnings from unconsolidated joint venture — 1,305 Net cash used in investing activities (336,196) (136,451) Cash flows from financing activities: Proceeds from issuance of senior unsecured notes 791,520 — Principal payments on senior unsecured notes (300,000) — Principal payments on term loans (455,000) — Principal payments on secured debt (12,661) (3,072) Payments of deferred financing costs (9,317) (830) Payments related to extinguishment of debt (30,196) — Issuance of common stock, net 308,713 80,092 Dividends paid on common stock (262,919) (278,299) Net cash provided by (used in) financing activities 30,140 (202,109) Net increase in cash, cash equivalents and restricted cash 50,334 16,292 Effect of foreign currency translation on cash, cash equivalents and restricted cash 29 88 Cash, cash equivalents and restricted cash, beginning of period 65,523 49,143 Cash, cash equivalents and restricted cash, end of period $ 115,886 $ 65,523 Supplemental disclosure of cash flow information: Interest paid $ 85,464 $ 92,589 Income taxes paid $ 1,839 $ 2,439 Supplemental disclosure of non-cash investing activities: Decrease in loans receivable and other investments due to acquisition of real estate $ — $ 20,731 Secured debt assumed by buyer in connection with sale of real estate $ — $ 31,830
25 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 FINANCIAL INFORMATION FFO, Normalized FFO, AFFO and Normalized AFFO (1) FFO and AFFO for the year ended December 31, 2021 and 2020 include $0.4 million and $2.3 million, respectively, earned during the period related to legacy Care Capital Properties, Inc. investments. In addition, other normalizing items for FFO and AFFO include triple-net operating expenses, net of recoveries. FFO, Normalized FFO, AFFO and Normalized AFFO Dollars in thousands Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Net (loss) income $ (24,353) $ 37,117 $ (113,256) $ 138,417 Add: Depreciation and amortization of real estate assets 45,079 44,158 178,991 176,737 Depreciation, amortization and impairment of real estate assets related to unconsolidated joint venture 9,600 5,424 26,129 26,949 Net gain on sales of real estate (14,085) (33) (12,301) (2,861) Net loss on sales of real estate related to unconsolidated joint venture 3 10 33 3,281 Impairment of real estate 9,004 849 9,499 4,003 Other-than-temporary impairment of unconsolidated joint venture — — 164,126 — FFO $ 25,248 $ 87,525 $ 253,221 $ 346,526 Write-offs of straight-line rental income receivable and lease intangibles 18,745 — 40,759 21,200 Lease termination income — — — (300) Loss on extinguishment of debt 32,862 — 34,622 531 Provision for loan losses and other reserves 2,045 1,149 3,935 1,855 Support payments paid to joint venture manager 7,350 — 9,800 — Other normalizing items (1) 1,792 (314) 2,644 (1,283) Normalized FFO $ 88,042 $ 88,360 $ 344,981 $ 368,529 FFO $ 25,248 $ 87,525 $ 253,221 $ 346,526 Stock-based compensation expense 927 2,256 7,914 7,907 Non-cash rental and related revenues 15,710 (5,798) 25,823 (4,458) Non-cash interest income (544) (608) (1,988) (2,351) Non-cash interest expense 2,979 1,891 8,368 8,418 Non-cash portion of loss on extinguishment of debt 2,666 — 4,426 531 Provision for loan losses and other reserves 2,045 1,149 3,935 1,855 Other non-cash adjustments related to unconsolidated joint venture (3,687) 576 (5,051) 1,913 Other non-cash adjustments 172 255 492 825 AFFO $ 45,516 $ 87,246 $ 297,140 $ 361,166 Cash portion of lease termination income — — — (300) Cash portion of loss on extinguishment of debt 30,196 — 30,196 — Support payments paid to joint venture manager 7,350 — 9,800 — Other normalizing items (1) 1,752 (337) 2,715 (1,369) Normalized AFFO $ 84,814 $ 86,909 $ 339,851 $ 359,497 Amounts per diluted common share: Net (loss) income $ (0.11) $ 0.18 $ (0.52) $ 0.67 FFO $ 0.11 $ 0.42 $ 1.15 $ 1.67 Normalized FFO $ 0.39 $ 0.42 $ 1.57 $ 1.78 AFFO $ 0.20 $ 0.42 $ 1.35 $ 1.74 Normalized AFFO $ 0.37 $ 0.41 $ 1.54 $ 1.73 Weighted average number of common shares outstanding, diluted: Net (loss) income 227,519,771 209,322,132 219,073,027 207,252,830 FFO and Normalized FFO 228,591,078 209,322,132 220,102,563 207,252,830 AFFO and Normalized AFFO 228,992,103 209,983,245 220,526,512 208,039,530
26 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 FINANCIAL INFORMATION Components of Net Asset Value (NAV) (1) As of December 31, 2021 (1) Excludes our unconsolidated joint venture which consists of 158 facilities and 7,056 units and our 49% share of the unconsolidated joint venture's debt which was $373.7 million as of December 31, 2021. (2) Amounts represent principal amounts due and exclude deferred financing costs, net and premiums/discounts, net. (3) Includes balances that impact cash or NOI and excludes non-cash items. Annualized Cash NOI Dollars in thousands Skilled Nursing/Transitional Care $ 276,832 Senior Housing - Leased 51,156 Senior Housing - Managed 38,446 Specialty Hospitals and Other 52,910 Annualized Cash NOI (excluding loans receivable and other investments) $ 419,344 Obligations Dollars in thousands Secured debt (2) $ 67,602 Unsecured senior notes (2) 1,750,000 Term loans (2) 598,438 Consolidated Debt 2,416,040 Add (less): Cash and cash equivalents and restricted cash (115,886) Accounts payable and accrued liabilities (3) 130,137 Net obligations $ 2,430,291 Other Assets Dollars in thousands Loans receivable and other investments, net $ 399,086 Investment in unconsolidated joint venture 96,680 Accounts receivable, prepaid expenses and other assets, net (3) 49,937 Total other assets $ 545,703 Common Shares Outstanding Total shares 230,398,655 We disclose components of our business relevant to calculate NAV. We consider NAV to be a useful supplemental measure that assists both management and investors to estimate the fair value of our Company. The calculation of NAV involves significant estimates and can be calculated using various methods. Each individual investor must determine the specific methodology, assumptions and estimates to use to arrive at an estimated NAV of the Company. The components of NAV do not consider potential changes in our investment portfolio. The components include non-GAAP financial measures, such as Cash NOI. Although these measures are not presented in accordance with GAAP, investors can use these non-GAAP financial measures as supplemental information to evaluate our business.
27 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 APPENDIX Disclaimer Disclaimer This supplement contains “forward-looking” information as that term is defined in the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward-looking statements. Examples of forward-looking statements include all statements regarding our expected future financial position, results of operations, cash flows, liquidity, business strategy, growth opportunities, potential investments, and plans and objectives for future operations. You can identify some of the forward-looking statements by the use of forward-looking words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "should," "may" an other similar expressions, although not all forward-looking statements contain these identifying words. Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: the ongoing COVID-19 pandemic and measures intended to prevent its spread, and the related impact on our tenants, operators and Senior Housing - Managed communities; operational risks with respect to our Senior Housing - Managed communities; competitive conditions in our industry; the loss of key management personnel; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; potential impairment charges and adjustments related to the accounting of our assets; the potential variability of our reported rental and related revenues as a result of Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs, on January 1, 2019; risks associated with our investment in our unconsolidated joint venture; catastrophic weather and other natural or man-made disasters, the effects of climate change on our properties and a failure to implement sustainable and energy-efficient measures; increased operating costs for our tenants and operators; increased healthcare regulation and enforcement; our tenants’ dependency on reimbursement from governmental and other third-party payor programs; the effect of our tenants declaring bankruptcy or becoming insolvent; our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties; the impact of litigation and rising insurance costs on the business of our tenants; the impact of required regulatory approvals and transfers of healthcare properties; environmental compliance costs and liabilities associated with real estate properties we own; our tenants’ or operators’ failure to adhere to applicable privacy and data security laws, or a material breach of our or our tenants’ or operators’ information technology; our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; adverse changes in our credit ratings; our ability to make dividend distributions at expected levels; our ability to raise capital through equity and debt financings; changes in foreign currency exchange rates and other risks associated with our ownership of property outside the U.S.; the relatively illiquid nature of real estate investments; our ability to maintain our status as a real estate investment trust (“REIT”) under the federal tax laws; compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT; changes in tax laws and regulations affecting REITs (including the potential effects of the Tax Cuts and Jobs Act); the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities; and the exclusive forum provisions in our bylaws. Additional information concerning risks and uncertainties that could affect our business can be found in our filings with the Securities and Exchange Commission (the “SEC”), including in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021. We do not intend, and we undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this supplement or to reflect the occurrence of unanticipated events, unless required by law to do so. Note Regarding Non-GAAP Financial Measures This supplement includes the following financial measures defined as non-GAAP financial measures by the SEC: net operating income (“NOI”), Cash NOI, funds from operations (“FFO”), Normalized FFO, Adjusted FFO (“AFFO”), Normalized AFFO, FFO per diluted common share, Normalized FFO per diluted common share, AFFO per diluted common share, Normalized AFFO per diluted common share and Adjusted EBITDA (defined below). These measures may be different than non-GAAP financial measures used by other companies, and the presentation of these measures is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with U.S. generally accepted accounting principles. An explanation of these non-GAAP financial measures is included under “Reporting Definitions” in this supplement and reconciliations of these non-GAAP financial measures to the GAAP financial measures we consider most comparable are included on the Investors section of our website at https://ir.sabrahealth.com/investors/ financials/quarterly-results. Tenant, Operator and Borrower Information This supplement includes information regarding our tenants that lease properties from us and our operators and borrowers, most of which are not subject to SEC reporting requirements. The information related to our tenants, operators and borrowers that is provided in this supplement has been provided by, or derived from information provided by, such tenants, operators and borrowers. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only. Sabra Information The information in this supplemental information package should be read in conjunction with the Company's Annual Report on Form 10- K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the SEC. The Reporting Definitions and Reconciliations of Non-GAAP Measures are an integral part of the information presented herein. On Sabra’s website, www.sabrahealth.com, you can access, free of charge, Sabra's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such material is filed with, or furnished to, the SEC. The information contained on Sabra’s website is not incorporated by reference into, and should not be considered a part of, this supplemental information package. All material filed with the SEC can also be accessed through its website, www.sec.gov. For more information, contact Investor Relations at (888) 393-8248 or investorrelations@sabrahealth.com.
28 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 APPENDIX Reporting Definitions Adjusted EBITDA* Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company's long-term equity award program, and loan loss reserves. Adjusted EBITDA is an important non-GAAP supplemental measure of operating performance. Annualized Cash Net Operating Income (“Annualized Cash NOI”)* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Annualized Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Annualized Cash NOI as Annualized Revenues less operating expenses, excluding COVID-19 Pandemic Expenses, and non-cash revenues and expenses. Annualized Cash NOI excludes all other financial statement amounts included in net income. Annualized Revenues The annual contractual rental revenues under leases and interest and other income generated by the Company’s loans receivable and other investments based on amounts invested and applicable terms as of the end of the period presented. Annualized Revenues do not include tenant recoveries, additional rents or Grant Income and are adjusted to (i) reflect actual payments received during the twelve months ended at the end of the respective period for leases no longer accounted for on an accrual basis, (ii) exclude residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis and (iii) reflect the reduction in Avamere’s annual base rent to $30.7 million effective February 1, 2022. Cash Net Operating Income (“Cash NOI”)* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Cash NOI as total revenues less operating expenses and non-cash revenues and expenses. Cash NOI excludes all other financial statement amounts included in net income. Cash NOI Margin Cash NOI Margin is calculated as Cash NOI divided by resident fees and services. Consolidated Debt The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements. Consolidated Debt, Net The carrying amount of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness, as reported in the Company’s consolidated financial statements. Consolidated Enterprise Value The Company believes Consolidated Enterprise Value is an important measurement as it is a measure of a company’s value. The Company calculates Consolidated Enterprise Value as market equity capitalization plus Consolidated Debt. Market equity capitalization is calculated as (i) the number of shares of common stock multiplied by the closing price of the Company’s common stock on the last day of the period presented plus (ii) the number of shares of preferred stock multiplied by the closing price of the Company’s preferred stock on the last day of the period presented. Consolidated Enterprise Value includes the Company’s market equity capitalization and Consolidated Debt, less cash and cash equivalents. COVID-19 Pandemic Expenses COVID-19 Pandemic Expenses consist primarily of (i) personal protective equipment (“PPE”) costs, (ii) incremental labor costs (including bonuses, hero pay and additional labor needed to implement new health and safety protocols) and (iii) incremental supply costs required to implement new health and safety protocols (e.g., disposable food containers and stronger disinfectants), in each case incurred by communities in our Senior Housing - Managed portfolio specifically as a result of the COVID-19 pandemic. EBITDARM Earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses EBITDARM in determining EBITDARM Coverage. EBITDARM has limitations as an analytical tool. EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, EBITDARM does not represent a property’s net income or cash flows from operations and should not be considered an alternative to those indicators. The Company utilizes EBITDARM to evaluate the core operations of the properties by eliminating management fees, which may vary by operator/tenant and operating structure, and as a supplemental measure of the ability of the Company’s operators/tenants and relevant guarantors to generate sufficient liquidity to meet related obligations to the Company. EBITDARM Coverage Represents the ratio of EBITDARM to cash rent for owned facilities (excluding Senior Housing - Managed communities) for the period presented. EBITDARM Coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of EBITDARM. EBITDARM Coverage includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful.
29 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 APPENDIX Reporting Definitions Funds From Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”)* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations, or FFO, as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“Nareit”), and adjusted funds from operations, or AFFO (and related per share amounts) are important non-GAAP supplemental measures of the Company’s 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. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and the Company’s share of gains or losses from real estate dispositions related to its unconsolidated joint venture, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus the Company’s share of depreciation and amortization related to its unconsolidated joint venture, and real estate impairment charges of both consolidated and unconsolidated entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. AFFO is defined as FFO excluding merger and acquisition costs, stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including ineffectiveness gain/loss on derivative instruments, and non- cash revenue and expense amounts related to noncontrolling interests) and the Company’s share of non-cash adjustments related to its unconsolidated joint venture. The Company believes that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of the Company’s operating results among investors and makes comparisons of operating results among real estate investment trusts more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of real estate investment trusts, 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 and AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than the Company does. Grant Income Grant income consists of funds specifically paid to communities in our Senior Housing - Managed portfolio from state or federal governments related to the pandemic and were incremental to the amounts that would have otherwise been received for providing care to residents. Investment Represents the carrying amount of real estate assets after adding back accumulated depreciation and amortization and excludes net intangible assets and liabilities. Market Capitalization Total common shares of Sabra outstanding multiplied by the closing price per common share as of a given period. Net Debt* The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements, net of cash and cash equivalents as reported in the Company’s consolidated financial statements. Net Debt to Adjusted EBITDA* Net Debt to Adjusted EBITDA is calculated as Net Debt divided by Annualized Adjusted EBITDA, which is Adjusted EBITDA, as adjusted for annualizing adjustments that give effect to the acquisitions and dispositions completed during the respective period as though such acquisitions and dispositions were completed as of the beginning of the period presented. Net Operating Income (“NOI”)* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines NOI as total revenues less operating expenses. NOI excludes all other financial statement amounts included in net income.
30 SABRA 4Q 2021 SUPPLEMENTAL INFORMATION December 31, 2021 APPENDIX Reporting Definitions Normalized FFO and Normalized AFFO* Normalized FFO and Normalized AFFO represent FFO and AFFO, respectively, adjusted for certain income and expense items that the Company does not believe are indicative of its ongoing operating results. The Company considers Normalized FFO and Normalized AFFO to be useful measures to evaluate the Company’s operating results excluding these income and expense items to help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized FFO and Normalized AFFO 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. Normalized FFO and Normalized AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of Normalized FFO and Normalized AFFO may not be comparable to Normalized FFO and Normalized AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define FFO and AFFO or Normalized FFO and Normalized AFFO differently than the Company does. Occupancy Percentage Occupancy Percentage represents the facilities’ average operating occupancy for the period indicated. The percentages are calculated by dividing the actual census from the period presented by the available beds/units for the same period. Occupancy includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. REVPOR REVPOR represents the average revenues generated per occupied unit per month at Senior Housing - Managed communities for the period indicated. It is calculated as resident fees and services revenues, excluding Grant Income, divided by average monthly occupied unit days. REVPOR includes only Stabilized Facilities. Senior Housing Senior Housing communities include independent living, assisted living, continuing care retirement and memory care communities. Senior Housing - Managed Senior Housing communities operated by third-party property managers pursuant to property management agreements. Skilled Mix Skilled Mix is defined as the total Medicare and non-Medicaid managed care patient revenue at Skilled Nursing/Transitional Care facilities divided by the total revenues at Skilled Nursing/Transitional Care facilities for the period indicated. Skilled Mix includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. Skilled Nursing/Transitional Care Skilled Nursing/Transitional Care facilities include skilled nursing, transitional care, multi-license designation and mental health facilities. Specialty Hospitals and Other Includes acute care, long-term acute care, rehabilitation and behavioral hospitals, facilities that provide residential services, which may include assistance with activities of daily living, and other facilities not classified as Skilled Nursing/Transitional Care or Senior Housing. Stabilized Facility At the time of acquisition, the Company classifies each facility as either stabilized or non-stabilized. In addition, the Company may classify a facility as non-stabilized after acquisition. Circumstances that could result in a facility being classified as non-stabilized include newly completed developments, facilities undergoing major renovations or additions, facilities being repositioned or transitioned to new operators, and significant transitions within the tenants’ business model. Such facilities are typically reclassified to stabilized upon the earlier of maintaining consistent occupancy (85% for Skilled Nursing/Transitional Care facilities and 90% for Senior Housing communities) or 24 months after the date of classification as non-stabilized. Stabilized Facilities exclude (i) facilities held for sale, (ii) strategic disposition candidates, (iii) facilities being transitioned to a new operator, (iv) facilities being transitioned from being leased by the Company to being operated by the Company and (v) facilities acquired during the three months preceding the period presented. *Non-GAAP Financial Measures Reconciliations, definitions and important discussions regarding the usefulness and limitations of the Non-GAAP Financial Measures used in this supplement can be found at https://ir.sabrahealth.com/investors/financials/quarterly-results.
Document
Reconciliations of Non-GAAP Financial Measures
December 31, 2021
(Unaudited)
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
FFO, Normalized FFO, AFFO and Normalized AFFO
(dollars in thousands, except per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Net (loss) income | $ | (24,353) | $ | 37,117 | $ | (113,256) | $ | 138,417 |
| Add: | ||||||||
| Depreciation and amortization of real estate assets | 45,079 | 44,158 | 178,991 | 176,737 | ||||
| Depreciation, amortization and impairment of real estate assets related to unconsolidated joint venture | 9,600 | 5,424 | 26,129 | 26,949 | ||||
| Net gain on sales of real estate | (14,085) | (33) | (12,301) | (2,861) | ||||
| Net loss on sales of real estate related to unconsolidated joint venture | 3 | 10 | 33 | 3,281 | ||||
| Impairment of real estate | 9,004 | 849 | 9,499 | 4,003 | ||||
| Other-than-temporary impairment of unconsolidated joint venture | — | — | 164,126 | — | ||||
| FFO | $ | 25,248 | $ | 87,525 | $ | 253,221 | $ | 346,526 |
| Write-offs of straight-line rental income receivable and lease intangibles | 18,745 | — | 40,759 | 21,200 | ||||
| Lease termination income | — | — | — | (300) | ||||
| Loss on extinguishment of debt | 32,862 | — | 34,622 | 531 | ||||
| Provision for loan losses and other reserves | 2,045 | 1,149 | 3,935 | 1,855 | ||||
| Support payments paid to joint venture manager | 7,350 | — | 9,800 | — | ||||
| Other normalizing items (1) | 1,792 | (314) | 2,644 | (1,283) | ||||
| Normalized FFO | $ | 88,042 | $ | 88,360 | $ | 344,981 | $ | 368,529 |
| FFO | $ | 25,248 | $ | 87,525 | $ | 253,221 | $ | 346,526 |
| Stock-based compensation expense | 927 | 2,256 | 7,914 | 7,907 | ||||
| Non-cash rental and related revenues | 15,710 | (5,798) | 25,823 | (4,458) | ||||
| Non-cash interest income | (544) | (608) | (1,988) | (2,351) | ||||
| Non-cash interest expense | 2,979 | 1,891 | 8,368 | 8,418 | ||||
| Non-cash portion of loss on extinguishment of debt | 2,666 | — | 4,426 | 531 | ||||
| Provision for loan losses and other reserves | 2,045 | 1,149 | 3,935 | 1,855 | ||||
| Other non-cash adjustments related to unconsolidated joint venture | (3,687) | 576 | (5,051) | 1,913 | ||||
| Other non-cash adjustments | 172 | 255 | 492 | 825 | ||||
| AFFO | $ | 45,516 | $ | 87,246 | $ | 297,140 | $ | 361,166 |
| Cash portion of lease termination income | — | — | — | (300) | ||||
| Cash portion of loss on extinguishment of debt | 30,196 | — | 30,196 | — | ||||
| Support payments paid to joint venture manager | 7,350 | — | 9,800 | — | ||||
| Other normalizing items (1) | 1,752 | (337) | 2,715 | (1,369) | ||||
| Normalized AFFO | $ | 84,814 | $ | 86,909 | $ | 339,851 | $ | 359,497 |
| Amounts per diluted common share: | ||||||||
| Net (loss) income | $ | (0.11) | $ | 0.18 | $ | (0.52) | $ | 0.67 |
| FFO | $ | 0.11 | $ | 0.42 | $ | 1.15 | $ | 1.67 |
| Normalized FFO | $ | 0.39 | $ | 0.42 | $ | 1.57 | $ | 1.78 |
| AFFO | $ | 0.20 | $ | 0.42 | $ | 1.35 | $ | 1.74 |
| Normalized AFFO | $ | 0.37 | $ | 0.41 | $ | 1.54 | $ | 1.73 |
| Weighted average number of common shares outstanding, diluted: | ||||||||
| Net (loss) income | 227,519,771 | 209,322,132 | 219,073,027 | 207,252,830 | ||||
| FFO and Normalized FFO | 228,591,078 | 209,322,132 | 220,102,563 | 207,252,830 | ||||
| AFFO and Normalized AFFO | 228,992,103 | 209,983,245 | 220,526,512 | 208,039,530 |
(1) FFO and AFFO for the year ended December 31, 2021 and 2020 include $0.4 million and $2.3 million, respectively, earned during the period related to legacy Care Capital Properties, Inc. investments. In addition, other normalizing items for FFO and AFFO include triple-net operating expenses, net of recoveries.
See reporting definitions. 2
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
EBITDA, Adjusted EBITDA and Annualized Adjusted EBITDA
Net Debt and Net Debt to Adjusted EBITDA
(in thousands)
| Year Ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Net (loss) income | $ | (113,256) | $ | 138,417 |
| Interest | 98,632 | 100,424 | ||
| Income tax expense | 1,845 | 710 | ||
| Depreciation and amortization | 178,991 | 176,737 | ||
| EBITDA | $ | 166,212 | $ | 416,288 |
| Loss from unconsolidated joint venture | 27,955 | 16,599 | ||
| Other-than-temporary impairment of unconsolidated joint venture | 164,126 | — | ||
| Distributions from unconsolidated joint venture | — | 12,795 | ||
| Stock-based compensation expense | 7,914 | 7,907 | ||
| Merger and acquisition costs | 277 | 483 | ||
| CCP transition costs | 2 | 91 | ||
| Provision for loan losses and other reserves and non-cash revenue write-offs | 47,893 | 22,668 | ||
| Impairment of real estate | 9,499 | 4,003 | ||
| Loss on extinguishment of debt | 34,622 | 531 | ||
| Other expense (income) | 1,813 | (2,433) | ||
| Lease termination income | — | (300) | ||
| Net gain on sales of real estate | (12,301) | (2,861) | ||
| Adjusted EBITDA (1) | $ | 448,012 | $ | 475,771 |
| Annualizing adjustments (2) | 14,695 | 717 | ||
| Annualized Adjusted EBITDA (3) | $ | 462,707 | $ | 476,488 |
| December 31, | ||||
| 2021 | 2020 | |||
| Secured debt | $ | 67,602 | $ | 80,199 |
| Revolving credit facility | — | — | ||
| Term loans | 598,438 | 1,053,100 | ||
| Senior unsecured notes | 1,750,000 | 1,250,000 | ||
| Consolidated Debt | 2,416,040 | 2,383,299 | ||
| Cash and cash equivalents | (111,996) | (59,076) | ||
| Net Debt | $ | 2,304,044 | $ | 2,324,223 |
| December 31, | ||||
| 2021 | 2020 | |||
| Net Debt | $ | 2,304,044 | $ | 2,324,223 |
| Annualized Adjusted EBITDA | $ | 462,707 | $ | 476,488 |
| Net Debt to Adjusted EBITDA | 4.98x | 4.88x |
(1) Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company’s long-term equity award program and loan loss reserves.
(2) Annualizing adjustments give effect to the acquisitions and dispositions completed during the twelve months ended for the respective period as though such acquisitions and dispositions were completed as of the beginning of the period.
(3) Annualized Adjusted EBITDA is calculated as Adjusted EBITDA as adjusted to give effect to the adjustments described in footnote 2 above.
See reporting definitions. 3
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Income
Supplemental Information
(in thousands)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Cash rental income | $ | 99,023 | $ | 99,779 | $ | 404,503 | $ | 405,257 |
| Straight-line rental income | 1,945 | 3,711 | 13,059 | 17,360 | ||||
| Straight-line rental income receivable write-offs | (157) | — | (25,370) | (13,750) | ||||
| Above/below market lease amortization | 1,091 | 2,088 | 5,076 | 7,911 | ||||
| Above/below market lease intangible amortization acceleration | (18,588) | — | (18,588) | (7,063) | ||||
| Operating expense recoveries | 3,869 | 5,155 | 18,036 | 20,869 | ||||
| Rental and related revenues | $ | 87,183 | $ | 110,733 | $ | 396,716 | $ | 430,584 |
See reporting definitions. 4
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Senior Housing - Managed Revenues
(in thousands)
| Three Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||
| Revenues: (1) | ||||||||||
| Resident fees and services | $ | 40,534 | $ | 39,813 | $ | 38,951 | $ | 36,071 | $ | 38,343 |
| Resident fees and services not included in same store | (2,682) | (2,811) | (2,315) | (396) | — | |||||
| Same store resident fees and services | $ | 37,852 | $ | 37,002 | $ | 36,636 | $ | 35,675 | $ | 38,343 |
(1) Revenues have been adjusted for changes in the foreign currency exchange rate where applicable.
See reporting definitions. 5
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands)
| Three Months Ended December 31, 2021 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Skilled Nursing/ Transitional Care | Senior Housing | Specialty Hospitals and Other | |||||||||||||||||||||||
| Senior Housing - Leased | Senior Housing - Managed (1) | Total Senior Housing | Other | Unconsolidated Joint Venture | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 26,649 | $ | 9,213 | $ | (626) | $ | 8,587 | $ | 14,489 | $ | 7,940 | $ | (13,264) | $ | (68,754) | $ | (24,353) | |||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and amortization | 26,302 | 5,353 | 8,787 | 14,140 | 4,618 | — | — | 19 | 45,079 | ||||||||||||||||
| Interest | 229 | 400 | — | 400 | — | — | — | 25,047 | 25,676 | ||||||||||||||||
| General and administrative | — | — | — | — | — | — | — | 8,237 | 8,237 | ||||||||||||||||
| Provision for loan losses and other reserves | — | — | — | — | — | — | — | 2,045 | 2,045 | ||||||||||||||||
| Impairment of real estate | 9,004 | — | — | — | — | — | — | — | 9,004 | ||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | — | — | 32,862 | 32,862 | ||||||||||||||||
| Other expense | — | — | — | — | — | — | — | 13 | 13 | ||||||||||||||||
| Net gain on sales of real estate | (7,153) | (2,287) | — | (2,287) | (4,645) | — | — | — | (14,085) | ||||||||||||||||
| Loss from unconsolidated JV | — | — | — | — | — | — | 13,264 | — | 13,264 | ||||||||||||||||
| Income tax expense | — | — | — | — | — | — | — | 531 | 531 | ||||||||||||||||
| Sabra’s share of unconsolidated JV Net Operating Loss | — | — | — | — | — | — | (4,240) | — | (4,240) | ||||||||||||||||
| Net Operating Income (Loss) | $ | 55,031 | $ | 12,679 | $ | 8,161 | $ | 20,840 | $ | 14,462 | $ | 7,940 | $ | (4,240) | $ | — | $ | 94,033 | |||||||
| Non-cash revenue and expense adjustments | 16,695 | (582) | — | (582) | (380) | (544) | — | — | 15,189 | ||||||||||||||||
| Cash Net Operating Income (Loss) | $ | 71,726 | $ | 12,097 | $ | 8,161 | $ | 20,258 | $ | 14,082 | $ | 7,396 | $ | (4,240) | $ | — | $ | 109,222 | |||||||
| Cash Net Operating Income not included in same store | (81) | (480) | (787) | (1,267) | (1,104) | ||||||||||||||||||||
| Same store Cash Net Operating Income | $ | 71,645 | $ | 11,617 | $ | 7,374 | $ | 18,991 | $ | 12,978 |
(1) Net Operating Income, Cash Net Operating Income and Same store Cash Net Operating Income include $1.5 million of COVID-19 Pandemic Expenses.
See reporting definitions. 6
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands)
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Skilled Nursing/ Transitional Care | Senior Housing | Specialty Hospitals and Other | |||||||||||||||||||||||
| Senior Housing - Leased | Senior Housing - Managed (1) | Total Senior Housing | Other | Unconsolidated Joint Venture | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 26,977 | $ | 6,512 | $ | 300 | $ | 6,812 | $ | 9,992 | $ | 3,405 | $ | (4,018) | $ | (32,945) | $ | 10,223 | |||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and amortization | 26,634 | 5,234 | 8,557 | 13,791 | 4,603 | — | — | 18 | 45,046 | ||||||||||||||||
| Interest | 297 | 404 | — | 404 | — | — | — | 23,542 | 24,243 | ||||||||||||||||
| General and administrative | — | — | — | — | — | — | — | 8,683 | 8,683 | ||||||||||||||||
| Recovery of loan losses and other reserves | — | — | — | — | — | — | — | (26) | (26) | ||||||||||||||||
| Impairment of real estate | 312 | 183 | — | 183 | — | — | — | — | 495 | ||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | — | — | 913 | 913 | ||||||||||||||||
| Other income | — | — | — | — | — | — | — | (277) | (277) | ||||||||||||||||
| Net (gain) loss on sales of real estate | — | (856) | 201 | (655) | — | — | — | — | (655) | ||||||||||||||||
| Loss from unconsolidated JV | — | — | — | — | — | — | 4,018 | — | 4,018 | ||||||||||||||||
| Income tax expense | — | — | — | — | — | — | — | 92 | 92 | ||||||||||||||||
| Sabra’s share of unconsolidated JV Net Operating Income | — | — | — | — | — | — | 3,521 | — | 3,521 | ||||||||||||||||
| Net Operating Income | $ | 54,220 | $ | 11,477 | $ | 9,058 | $ | 20,535 | $ | 14,595 | $ | 3,405 | $ | 3,521 | $ | — | $ | 96,276 | |||||||
| Non-cash revenue and expense adjustments | 20,420 | 935 | — | 935 | (590) | (530) | — | — | 20,235 | ||||||||||||||||
| Foreign exchange rate adjustment | — | — | (2) | (2) | — | — | — | — | (2) | ||||||||||||||||
| Cash Net Operating Income | $ | 74,640 | $ | 12,412 | $ | 9,056 | $ | 21,468 | $ | 14,005 | $ | 2,875 | $ | 3,521 | $ | — | $ | 116,509 | |||||||
| Cash Net Operating Income not included in same store | (458) | (225) | (810) | (1,035) | (1,340) | ||||||||||||||||||||
| Same store Cash Net Operating Income | $ | 74,182 | $ | 12,187 | $ | 8,246 | $ | 20,433 | $ | 12,665 |
(1) Net Operating Income, Cash Net Operating Income and Same store Cash Net Operating Income include $0.8 million of COVID-19 Pandemic Expenses.
See reporting definitions. 7
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands)
| Three Months Ended June 30, 2021 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Skilled Nursing/ Transitional Care | Senior Housing | Specialty Hospitals and Other | |||||||||||||||||||||||
| Senior Housing - Leased | Senior Housing - Managed (1) | Total Senior Housing | Other | Unconsolidated Joint Venture | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 47,612 | $ | 7,639 | $ | 1,810 | $ | 9,449 | $ | 10,002 | $ | 3,031 | $ | (169,789) | $ | (32,878) | $ | (132,573) | |||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and amortization | 26,363 | 5,322 | 8,407 | 13,729 | 4,382 | — | — | 17 | 44,491 | ||||||||||||||||
| Interest | 299 | 412 | — | 412 | — | — | — | 23,559 | 24,270 | ||||||||||||||||
| General and administrative | — | — | — | — | — | — | — | 8,811 | 8,811 | ||||||||||||||||
| Recovery of loan losses and other reserves | — | — | — | — | — | — | — | (109) | (109) | ||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | — | — | 54 | 54 | ||||||||||||||||
| Other expense | — | — | — | — | — | — | — | 24 | 24 | ||||||||||||||||
| Net loss on sales of real estate | 3,752 | — | — | — | — | — | — | — | 3,752 | ||||||||||||||||
| Loss from unconsolidated JV | — | — | — | — | — | — | 169,789 | — | 169,789 | ||||||||||||||||
| Income tax expense | — | — | — | — | — | — | — | 522 | 522 | ||||||||||||||||
| Sabra’s share of unconsolidated JV Net Operating Income | — | — | — | — | — | — | 2,318 | — | 2,318 | ||||||||||||||||
| Net Operating Income | $ | 78,026 | $ | 13,373 | $ | 10,217 | $ | 23,590 | $ | 14,384 | $ | 3,031 | $ | 2,318 | $ | — | $ | 121,349 | |||||||
| Non-cash revenue and expense adjustments | (3,639) | (812) | — | (812) | (438) | (502) | — | — | (5,391) | ||||||||||||||||
| Foreign exchange rate adjustment | — | — | (45) | (45) | — | — | — | — | (45) | ||||||||||||||||
| Cash Net Operating Income | $ | 74,387 | $ | 12,561 | $ | 10,172 | $ | 22,733 | $ | 13,946 | $ | 2,529 | $ | 2,318 | $ | — | $ | 115,913 | |||||||
| Cash Net Operating Income not included in same store | (856) | ||||||||||||||||||||||||
| Same store Cash Net Operating Income | $ | 9,316 |
(1) Net Operating Income, Cash Net Operating Income and Same store Cash Net Operating Income include $0.5 million of Grant Income and $0.4 million of COVID-19 Pandemic Expenses.
See reporting definitions. 8
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands)
| Three Months Ended March 31, 2021 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Skilled Nursing/ Transitional Care | Senior Housing | Specialty Hospitals and Other | |||||||||||||||||||||||
| Senior Housing - Leased | Senior Housing - Managed (1) | Total Senior Housing | Other | Unconsolidated Joint Venture | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 54,883 | $ | 7,683 | $ | (584) | $ | 7,099 | $ | 9,606 | $ | 2,941 | $ | (5,010) | $ | (36,072) | $ | 33,447 | |||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and amortization | 26,618 | 5,318 | 7,680 | 12,998 | 4,741 | — | — | 18 | 44,375 | ||||||||||||||||
| Interest | 302 | 410 | — | 410 | — | — | — | 23,731 | 24,443 | ||||||||||||||||
| General and administrative | — | — | — | — | — | — | — | 8,938 | 8,938 | ||||||||||||||||
| Provision for loan losses and other reserves | — | — | — | — | — | — | — | 2,025 | 2,025 | ||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | — | — | 793 | 793 | ||||||||||||||||
| Other income | — | — | — | — | — | — | — | (133) | (133) | ||||||||||||||||
| Net gain on sales of real estate | (1,313) | — | — | — | — | — | — | — | (1,313) | ||||||||||||||||
| Loss from unconsolidated JV | — | — | — | — | — | — | 5,010 | — | 5,010 | ||||||||||||||||
| Income tax expense | — | — | — | — | — | — | — | 700 | 700 | ||||||||||||||||
| Sabra’s share of unconsolidated JV Net Operating Income | — | — | — | — | — | — | 3,055 | — | 3,055 | ||||||||||||||||
| Net Operating Income | $ | 80,490 | $ | 13,411 | $ | 7,096 | $ | 20,507 | $ | 14,347 | $ | 2,941 | $ | 3,055 | $ | — | $ | 121,340 | |||||||
| Non-cash revenue and expense adjustments | (4,295) | (870) | — | (870) | (521) | (412) | — | — | (6,098) | ||||||||||||||||
| Foreign exchange rate adjustment | — | — | 8 | 8 | — | — | — | — | 8 | ||||||||||||||||
| Cash Net Operating Income | $ | 76,195 | $ | 12,541 | $ | 7,104 | $ | 19,645 | $ | 13,826 | $ | 2,529 | $ | 3,055 | $ | — | $ | 115,250 | |||||||
| Cash Net Operating Income not included in same store | (159) | ||||||||||||||||||||||||
| Same store Cash Net Operating Income | $ | 6,945 |
(1) Net Operating Income, Cash Net Operating Income and Same store Cash Net Operating Income include $0.9 million of COVID-19 Pandemic Expenses.
See reporting definitions. 9
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands)
| Three Months Ended December 31, 2020 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Skilled Nursing/ Transitional Care | Senior Housing | Specialty Hospitals and Other | |||||||||||||||||||||||
| Senior Housing - Leased | Senior Housing - Managed (1) | Total Senior Housing | Other | Unconsolidated Joint Venture | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 52,347 | $ | 6,267 | $ | 2,292 | $ | 8,559 | $ | 9,199 | $ | 3,184 | $ | (3,562) | $ | (32,610) | $ | 37,117 | |||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and amortization | 26,408 | 5,345 | 7,858 | 13,203 | 4,529 | — | — | 18 | 44,158 | ||||||||||||||||
| Interest | 304 | 409 | — | 409 | — | — | — | 23,811 | 24,524 | ||||||||||||||||
| General and administrative | — | — | — | — | — | — | — | 8,105 | 8,105 | ||||||||||||||||
| Provision for loan losses and other reserves | — | — | — | — | — | — | — | 1,149 | 1,149 | ||||||||||||||||
| Impairment of real estate | — | 849 | — | 849 | — | — | — | — | 849 | ||||||||||||||||
| Other expense | — | — | — | — | — | — | — | 154 | 154 | ||||||||||||||||
| Net gain on sales of real estate | (33) | — | — | — | — | — | — | — | (33) | ||||||||||||||||
| Loss from unconsolidated JV | — | — | — | — | — | — | 3,562 | — | 3,562 | ||||||||||||||||
| Income tax benefit | — | — | — | — | — | — | — | (627) | (627) | ||||||||||||||||
| Sabra’s share of unconsolidated JV Net Operating Income | — | — | — | — | — | — | 5,054 | — | 5,054 | ||||||||||||||||
| Net Operating Income | $ | 79,026 | $ | 12,870 | $ | 10,150 | $ | 23,020 | $ | 13,728 | $ | 3,184 | $ | 5,054 | $ | — | $ | 124,012 | |||||||
| Non-cash revenue and expense adjustments | (4,455) | (904) | — | (904) | (411) | (607) | — | — | (6,377) | ||||||||||||||||
| Foreign exchange rate adjustment | — | — | 49 | 49 | — | — | — | — | 49 | ||||||||||||||||
| Cash Net Operating Income | $ | 74,571 | $ | 11,966 | $ | 10,199 | $ | 22,165 | $ | 13,317 | $ | 2,577 | $ | 5,054 | $ | — | $ | 117,684 | |||||||
| Cash Net Operating Income not included in same store | — | ||||||||||||||||||||||||
| Same store Cash Net Operating Income | $ | 10,199 |
(1) Net Operating Income, Cash Net Operating Income and Same store Cash Net Operating Income include $0.6 million of Grant Income and $1.0 million of COVID-19 Pandemic Expenses.
See reporting definitions. 10
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Facility Type
(in thousands)
| Year Ended December 31, 2021 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Skilled Nursing/ Transitional Care | Senior Housing | Specialty Hospitals and Other | |||||||||||||||||||||||
| Senior Housing - Leased | Senior Housing - Managed (1) | Total Senior Housing | Other | Unconsolidated Joint Venture | Corporate | Total | |||||||||||||||||||
| Net income (loss) | $ | 156,121 | $ | 31,047 | $ | 900 | $ | 31,947 | $ | 44,089 | $ | 17,317 | $ | (192,081) | $ | (170,649) | $ | (113,256) | |||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and amortization | 105,917 | 21,227 | 33,431 | 54,658 | 18,344 | — | — | 72 | 178,991 | ||||||||||||||||
| Interest | 1,127 | 1,626 | — | 1,626 | — | — | — | 95,879 | 98,632 | ||||||||||||||||
| General and administrative | — | — | — | — | — | — | — | 34,669 | 34,669 | ||||||||||||||||
| Provision for loan losses and other reserves | — | — | — | — | — | — | — | 3,935 | 3,935 | ||||||||||||||||
| Impairment of real estate | 9,316 | 183 | — | 183 | — | — | — | — | 9,499 | ||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | — | — | 34,622 | 34,622 | ||||||||||||||||
| Other income | — | — | — | — | — | — | — | (373) | (373) | ||||||||||||||||
| Net (gain) loss on sales of real estate | (4,714) | (3,143) | 201 | (2,942) | (4,645) | — | — | — | (12,301) | ||||||||||||||||
| Loss from unconsolidated JV | — | — | — | — | — | — | 192,081 | — | 192,081 | ||||||||||||||||
| Income tax expense | — | — | — | — | — | — | — | 1,845 | 1,845 | ||||||||||||||||
| Sabra’s share of unconsolidated JV Net Operating Income | — | — | — | — | — | — | 4,654 | — | 4,654 | ||||||||||||||||
| Net Operating Income | $ | 267,767 | $ | 50,940 | $ | 34,532 | $ | 85,472 | $ | 57,788 | $ | 17,317 | $ | 4,654 | $ | — | $ | 432,998 | |||||||
| Non-cash revenue and expense adjustments | 29,181 | (1,329) | — | (1,329) | (1,929) | (1,988) | — | — | 23,935 | ||||||||||||||||
| Cash Net Operating Income | $ | 296,948 | $ | 49,611 | $ | 34,532 | $ | 84,143 | $ | 55,859 | $ | 15,329 | $ | 4,654 | $ | — | $ | 456,933 | |||||||
| Annualizing adjustments (2) | (20,116) | 1,545 | 3,914 | 5,459 | (2,949) | 17,685 | (4,654) | — | (4,575) | ||||||||||||||||
| Annualized Cash Net Operating Income | $ | 276,832 | $ | 51,156 | $ | 38,446 | $ | 89,602 | $ | 52,910 | $ | 33,014 | $ | — | $ | — | $ | 452,358 | |||||||
| Reallocation adjustments (3) | 721 | 6,016 | — | 6,016 | 23,978 | (30,715) | — | — | — | ||||||||||||||||
| Annualized Cash Net Operating Income, as adjusted | $ | 277,553 | $ | 57,172 | $ | 38,446 | $ | 95,618 | $ | 76,888 | $ | 2,299 | $ | — | $ | — | $ | 452,358 |
(1) Net Operating Income and Cash Net Operating Income include $0.5 million of Grant Income and $3.5 million of COVID-19 Pandemic Expenses.
(2) Represents the annual effect of acquisitions, dispositions, lease modifications and scheduled rent increases completed during the period and mathematical adjustments needed to make Cash Net Operating Income for the period representative of Cash Net Operating Income for a full year. Annualizing adjustments also include the removal of COVID-19 Pandemic Expenses, Grant Income, triple-net operating expenses (net of recoveries), the Enlivant Joint Venture Cash NOI and the residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis, as well as an adjustment to reflect the reduction in Avamere's annual base rent to $30.7 million effective February 1, 2022.
(3) Adjustments to reflect Annualized Cash Net Operating Income from sales-type lease, mortgage and construction loans receivable and preferred equity investments in the related asset class of the underlying real estate.
See reporting definitions. 11
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Payor Type
(in thousands)
| Year Ended December 31, 2021 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Private Payors (1) | Non-Private Payors | Other | Unconsolidated Joint Venture | Corporate | Total | |||||||
| Net income (loss) | $ | 66,993 | $ | 165,164 | $ | 17,317 | $ | (192,081) | $ | (170,649) | $ | (113,256) |
| Adjustments: | ||||||||||||
| Depreciation and amortization | 81,082 | 97,837 | — | — | 72 | 178,991 | ||||||
| Interest | 1,739 | 1,014 | — | — | 95,879 | 98,632 | ||||||
| General and administrative | — | — | — | — | 34,669 | 34,669 | ||||||
| Provision for loan losses and other reserves | — | — | — | — | 3,935 | 3,935 | ||||||
| Impairment of real estate | 9,256 | 243 | — | — | — | 9,499 | ||||||
| Loss on extinguishment of debt | — | — | — | — | 34,622 | 34,622 | ||||||
| Other income | — | — | — | — | (373) | (373) | ||||||
| Net gain on sales of real estate | (3,469) | (8,832) | — | — | — | (12,301) | ||||||
| Loss from unconsolidated JV | — | — | — | 192,081 | — | 192,081 | ||||||
| Income tax expense | — | — | — | — | 1,845 | 1,845 | ||||||
| Sabra’s share of unconsolidated JV Net Operating Income | — | — | — | 4,654 | — | 4,654 | ||||||
| Net Operating Income | $ | 155,601 | $ | 255,426 | $ | 17,317 | $ | 4,654 | $ | — | $ | 432,998 |
| Non-cash revenue and expense adjustments | 3,668 | 22,255 | (1,988) | — | — | 23,935 | ||||||
| Cash Net Operating Income | $ | 159,269 | $ | 277,681 | $ | 15,329 | $ | 4,654 | $ | — | $ | 456,933 |
| Annualizing adjustments (2) | 9,396 | (27,002) | 17,685 | (4,654) | — | (4,575) | ||||||
| Annualized Cash Net Operating Income | $ | 168,665 | $ | 250,679 | $ | 33,014 | $ | — | $ | — | $ | 452,358 |
(1) Net Operating Income and Cash Net Operating Income include $0.5 million of Grant Income and $3.5 million of COVID-19 Pandemic Expenses.
(2) Represents the annual effect of acquisitions, dispositions, lease modifications and scheduled rent increases completed during the period and mathematical adjustments needed to make Cash Net Operating Income for the period representative of Cash Net Operating Income for a full year. Annualizing adjustments also include the removal of COVID-19 Pandemic Expenses, Grant Income, triple-net operating expenses (net of recoveries), the Enlivant Joint Venture Cash NOI and the residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis, as well as an adjustment to reflect the reduction in Avamere's annual base rent to $30.7 million effective February 1, 2022.
See reporting definitions. 12
SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Relationship
(in thousands)
| Year Ended December 31, 2021 | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| North American Healthcare | Signature Healthcare | Avamere Family of Companies | Signature Behavioral | Recovery Centers of America | Holiday AL Holdings LP | Cadia Healthcare | Healthmark Group | The McGuire Group | CommuniCare | All Other Relationships (1) | Corporate | Total | ||||||||||||||
| Net income (loss) | $ | 29,490 | $ | 23,697 | $ | (13,890) | $ | 24,750 | $ | 6,015 | $ | 822 | $ | 8,023 | $ | 11,054 | $ | 13,816 | $ | 10,946 | $ | (57,330) | $ | (170,649) | $ | (113,256) |
| Adjustments: | ||||||||||||||||||||||||||
| Depreciation and amortization | 11,213 | 14,280 | 11,906 | 10,167 | 889 | 19,610 | 10,667 | 4,787 | 7,127 | 4,520 | 83,753 | 72 | 178,991 | |||||||||||||
| Interest | — | — | — | — | — | — | — | — | — | — | 2,753 | 95,879 | 98,632 | |||||||||||||
| General and administrative | — | — | — | — | — | — | — | — | — | — | — | 34,669 | 34,669 | |||||||||||||
| Provision for loan losses and other reserves | — | — | — | — | — | — | — | — | — | — | — | 3,935 | 3,935 | |||||||||||||
| Impairment of real estate | — | — | — | — | — | — | — | — | — | — | 9,499 | — | 9,499 | |||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | — | — | — | — | — | — | 34,622 | 34,622 | |||||||||||||
| Other income | — | — | — | — | — | — | — | — | — | — | — | (373) | (373) | |||||||||||||
| Net (gain) loss on sales of real estate | — | — | — | (817) | — | — | — | 1,594 | — | — | (13,078) | — | (12,301) | |||||||||||||
| Loss from unconsolidated JV | — | — | — | — | — | — | — | — | — | — | 192,081 | — | 192,081 | |||||||||||||
| Income tax expense | — | — | — | — | — | — | — | — | — | — | — | 1,845 | 1,845 | |||||||||||||
| Sabra’s share of unconsolidated JV Net Operating Income | — | — | — | — | — | — | — | — | — | — | 4,654 | — | 4,654 | |||||||||||||
| Net Operating Income | $ | 40,703 | $ | 37,977 | $ | (1,984) | $ | 34,100 | $ | 6,904 | $ | 20,432 | $ | 18,690 | $ | 17,435 | $ | 20,943 | $ | 15,466 | $ | 222,332 | $ | — | $ | 432,998 |
| Non-cash revenue and expense adjustments | (2,301) | 7 | 42,458 | (273) | (213) | — | 654 | 5 | (4,851) | 323 | (11,874) | — | 23,935 | |||||||||||||
| Cash Net Operating Income | $ | 38,402 | $ | 37,984 | $ | 40,474 | $ | 33,827 | $ | 6,691 | $ | 20,432 | $ | 19,344 | $ | 17,440 | $ | 16,092 | $ | 15,789 | $ | 210,458 | $ | — | $ | 456,933 |
| Annualizing adjustments (2) | 715 | — | (9,774) | (3,276) | 17,452 | 92 | 195 | (6) | 26 | 138 | (10,137) | — | (4,575) | |||||||||||||
| Annualized Cash Net Operating Income | $ | 39,117 | $ | 37,984 | $ | 30,700 | $ | 30,551 | $ | 24,143 | $ | 20,524 | $ | 19,539 | $ | 17,434 | $ | 16,118 | $ | 15,927 | $ | 200,321 | $ | — | $ | 452,358 |
(1) Net Operating Income and Cash Net Operating Income include $0.5 million of Grant Income and $3.5 million of COVID-19 Pandemic Expenses.
(2) Represents the annual effect of acquisitions, dispositions, lease modifications and scheduled rent increases completed during the period and mathematical adjustments needed to make Cash Net Operating Income for the period representative of Cash Net Operating Income for a full year. Annualizing adjustments also include the removal of COVID-19 Pandemic Expenses, Grant Income, triple-net operating expenses (net of recoveries), the Enlivant Joint Venture Cash NOI and the residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis, as well as an adjustment to reflect the reduction in Avamere's annual base rent to $30.7 million effective February 1, 2022.
See reporting definitions. 13
SABRA HEALTH CARE REIT, INC.
REPORTING DEFINITIONS
Adjusted EBITDA. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company's long-term equity award program, and loan loss reserves. Adjusted EBITDA is an important non-GAAP supplemental measure of operating performance.
Annualized Cash Net Operating Income (“Annualized Cash NOI”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Annualized Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Annualized Cash NOI as Annualized Revenues less operating expenses, excluding COVID-19 Pandemic Expenses, and non-cash revenues and expenses. Annualized Cash NOI excludes all other financial statement amounts included in net income.
Annualized Revenues. The annual contractual rental revenues under leases and interest and other income generated by the Company’s loans receivable and other investments based on amounts invested and applicable terms as of the end of the period presented. Annualized Revenues do not include tenant recoveries, additional rents or Grant Income and are adjusted to (i) reflect actual payments received during the twelve months ended at the end of the respective period for leases no longer accounted for on an accrual basis, (ii) exclude residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis and (iii) reflect the reduction in Avamere’s annual base rent to $30.7 million effective February 1, 2022.
Cash Net Operating Income (“Cash NOI”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Cash NOI as total revenues less operating expenses and non-cash revenues and expenses. Cash NOI excludes all other financial statement amounts included in net income.
Consolidated Debt. The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements.
COVID-19 Pandemic Expenses. COVID-19 Pandemic Expenses consist primarily of (i) personal protective equipment (“PPE”) costs, (ii) incremental labor costs (including bonuses, hero pay and additional labor needed to implement new health and safety protocols) and (iii) incremental supply costs required to implement new health and safety protocols (e.g., disposable food containers and stronger disinfectants), in each case incurred by communities in our Senior Housing - Managed portfolio specifically as a result of the COVID-19 pandemic.
Funds From Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations, or FFO, as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“Nareit”), and adjusted funds from operations, or AFFO (and related per share amounts) are important non-GAAP supplemental measures of the Company’s 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. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and the Company’s share of gains or losses from real estate dispositions related to its unconsolidated joint venture, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus the Company’s share of depreciation and amortization related to its unconsolidated joint venture, and real estate impairment charges of both consolidated and unconsolidated entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. AFFO is defined as FFO excluding merger and acquisition costs, stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including ineffectiveness gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and the Company’s share of non-cash adjustments related to its unconsolidated joint venture. The Company believes that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of the Company’s operating results among investors and makes comparisons of operating results among real estate investment trusts more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of real estate investment trusts, 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 and AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than the Company does.
Grant Income. Grant Income consists of funds specifically paid to communities in our Senior Housing - Managed portfolio from state or federal governments related to the pandemic and were incremental to the amounts that would have otherwise been received for providing care to residents.
Net Debt. The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements, net of cash and cash equivalents as reported in the Company’s consolidated financial statements.
Net Debt to Adjusted EBITDA. Net Debt to Adjusted EBITDA is calculated as Net Debt divided by Annualized Adjusted EBITDA, which is Adjusted EBITDA, as adjusted for annualizing adjustments that give effect to the acquisitions and dispositions completed during the respective period as though such acquisitions and dispositions were completed as of the beginning of the period presented.
See reporting definitions. 14
SABRA HEALTH CARE REIT, INC.
REPORTING DEFINITIONS
Net Operating Income (“NOI”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines NOI as total revenues less operating expenses. NOI excludes all other financial statement amounts included in net income.
Normalized FFO and Normalized AFFO. Normalized FFO and Normalized AFFO represent FFO and AFFO, respectively, adjusted for certain income and expense items that the Company does not believe are indicative of its ongoing operating results. The Company considers Normalized FFO and Normalized AFFO to be useful measures to evaluate the Company’s operating results excluding these income and expense items to help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized FFO and Normalized AFFO 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. Normalized FFO and Normalized AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of Normalized FFO and Normalized AFFO may not be comparable to Normalized FFO and Normalized AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define FFO and AFFO or Normalized FFO and Normalized AFFO differently than the Company does.
Senior Housing. Senior Housing communities include independent living, assisted living, continuing care retirement and memory care communities.
Senior Housing - Managed. Senior Housing communities operated by third-party property managers pursuant to property management agreements.
Skilled Nursing/Transitional Care. Skilled Nursing/Transitional Care facilities include skilled nursing, transitional care, multi-license designation and mental health facilities.
Specialty Hospitals and Other. Includes acute care, long-term acute care, rehabilitation and behavioral hospitals, facilities that provide residential services, which may include assistance with activities of daily living, and other facilities not classified as Skilled Nursing/Transitional Care or Senior Housing.
See reporting definitions. 15
investorpresentation_feb
What Happens Inside Our Buildings Matters Most Investor Presentation | February 22, 2022
Forward-Looking Statements This presentation contains “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995, that may be identified, without limitation, by the use of “expects,” “believes,” “intends,” “should” or comparable terms or the negative thereof. Forward-looking statements in this presentation include, but are not limited to, all statements regarding our expectations regarding our recent and pending investments, the impact of the COVID-19 pandemic on our tenants, operators and Senior Housing - Managed communities and our strategic and operational plans, as well as all statements regarding expected future financial position, results of operations, cash flows, liquidity, financing plans, business strategy, projected expenses and capital expenditures, competitive position, growth opportunities and potential investments, plans and objectives for future operations. Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: the ongoing COVID-19 pandemic and measures intended to prevent its spread, and the related impact on our tenants, operators and Senior Housing - Managed communities; operational risks with respect to our Senior Housing - Managed communities; competitive conditions in our industry; the loss of key management personnel; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; potential impairment charges and adjustments related to the accounting of our assets; the potential variability of our reported rental and related revenues as a result of Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs, on January 1, 2019; risks associated with our investment in our unconsolidated joint venture; catastrophic weather and other natural or man-made disasters, the effects of climate change on our properties and a failure to implement sustainable and energy-efficient measures; increased operating costs for our tenants and operators; increased healthcare regulation and enforcement; our tenants’ dependency on reimbursement from governmental and other third-party payor programs; the effect of our tenants declaring bankruptcy or becoming insolvent; our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties; the impact of litigation and rising insurance costs on the business of our tenants; the impact of required regulatory approvals of transfers of healthcare properties; environmental compliance costs and liabilities associated with real estate properties we own; our tenants’ or operators’ failure to adhere to applicable privacy and data security laws, or a material breach of our or our tenants’ or operators’ information technology; our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; adverse changes in our credit ratings; our ability to make dividend distributions at expected levels; our ability to raise capital through equity and debt financings; changes in foreign currency exchange rates and other risks associated with our ownership of property outside the U.S.; the relatively illiquid nature of real estate investments; our ability to maintain our status as a real estate investment trust (“REIT”) under the federal tax laws; compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT; changes in tax laws and regulations affecting REITs (including the potential effects of the Tax Cuts and Jobs Act); the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities; and the exclusive forum provisions in our bylaws. Additional information concerning risks and uncertainties that could affect our business can be found in our filings with the Securities and Exchange Commission (the “SEC”), including Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021. Forward-looking statements made in this presentation are not guarantees of future performance, events or results, and you should not place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law. Disclaimers February 22, 2022 Investor Presentation 2
Tenant and Borrower Information This presentation includes information (e.g., EBITDARM Coverage and Occupancy Percentage) regarding certain of our tenants that lease properties from us and our operators and borrowers, most of which are not subject to SEC reporting requirements. The information related to our tenants, operators and borrowers that is provided in this presentation has been provided by, or derived from information provided by, such tenants, operators and borrowers. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only. Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures related to Sabra Health Care REIT, Inc., including annualized cash NOI, net debt to adjusted EBITDA and funds from operations (FFO). These measures may be different than non-GAAP financial measures used by other companies, and the presentation of these measures is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with U.S. generally accepted accounting principles. An explanation of these non-GAAP financial measures is included under “Definitions” in the Appendix, and reconciliations of these non-GAAP financial measures to the GAAP financial measures we consider most comparable are included on the Investors section of our website at https://ir.sabrahealth.com/investors/financials/quarterly- results/default.aspx. Disclaimers February 22, 2022 Investor Presentation 3
Our passion for quality care and deep industry experience uniquely position Sabra to succeed in the dynamic healthcare real estate market. We have the size, know-how and resilient balance sheet necessary to deliver long-term value to shareholders. Uniquely Positioned to Thrive February 22, 2022 Investor Presentation 4
“We know what happens inside our buildings matters most. That’s why we align ourselves with operators who skillfully and compassionately care for the residents and patients in the buildings we own.” -Rick Matros (he/him), Chief Executive Officer STRATEGY February 22, 2022 Investor Presentation 5
Our Strategy — Passion Meets Know-how Unique, Accretive Investments - Utilize our operational and asset management experience to identify and capitalize on new opportunities where off-market price dislocation exists. Support Operator Expansion - Be the capital partner of choice for the expansion and growth of leading operators with regional expertise and concentrated in markets with favorable demographics. Structure deals opportunistically across the capital stack. Creatively Financed Development - Pursue strategic development opportunities and long-term partnerships with leading developers. Optimize Portfolio - Continue to curate our portfolio to optimize diversification and maintain a mix of assets well-positioned for the future of healthcare delivery. STRATEGY February 22, 2022 Investor Presentation 6
“By consistently and deliberately executing our strategy, we deliver long-term value to our shareholders and provide the capital our tenants need to invest in their business and deliver quality care.” -Talya Nevo-Hacohen (she/her), Chief Investment Officer STRATEGY IN ACTION February 22, 2022 Investor Presentation 7
February 22, 2022 Investor Presentation 8 Expanding our Relationship with Sienna STRATEGY IN ACTION ▪ Sabra and Sienna have announced the pending acquisition of a portfolio of 11 high- quality senior housing communities strategically positioned across the provinces of Ontario and Saskatchewan. ▪ Sabra and Sienna will acquire the 1,048 unit portfolio through a newly formed 50/50 joint venture, with Sienna to operate the portfolio. ▪ Total purchase price of C$307.5 million (USD $243 million), with Sabra’s commitment equating to approximately C$154 million (USD $121 million). ▪ The transaction is expected to close upon receipt of regulatory approvals, which is anticipated to occur in the second quarter of 2022. ▪ Excluding one recently constructed community in lease-up, the portfolio includes ten communities with 936 units and an estimated value of C$275 million (USD $217 million). Year-to-date as of September 30, 2021, average occupancy for these ten communities was approximately 90%. These communities are expected to have a year-one yield of roughly 6%. The lease-up community was opened in 2019 and has 112 units. Upon stabilization, this community is expected to generate a yield higher than 6%. ▪ The portfolio also has embedded incremental value-creation potential through expansion opportunities for an additional 233 units.
STRATEGY IN ACTION Recovery Centers of America Monroeville, PA • Purchased a shuttered inpatient rehabilitation facility on a beautiful secluded, wooded site • Invested capital to renovate and reconfigure the building for a new use—inpatient detox and substance use disorder facility • RCA pre-leased the building under a long-term triple-net lease • Facility opened in December 2020, amid the pandemic • Allowed RCA to continue its growth with minimal capital outlay • Accretive transaction for Sabra Recovery Centers of America Greenville, SC • Closed on a 132-bed hotel on December 16, 2021 for conversion to an addiction treatment facility • As in Monroeville, RCA pre-leased the building under a long-term triple net lease • Sabra purchased the hotel for $10.9 million and has agreed to invest up to $22.5 million in renovations to convert it to an addiction treatment facility Adaptive Reuse for Behavioral Health February 22, 2022 Investor Presentation 9
February 22, 2022 Investor Presentation 10 Good for the Planet. Good for Our Stakeholders. Our inaugural ESG report is available on our website at sabrahealth.com. “ESG principles are intrinsically tied to our objective to drive shareholder value by operating efficiently, sustainably and with our stakeholders’ best interest in mind.” -Rick Matros (he/him), Chief Executive Officer ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Committed to Diversity, Equity & Inclusion 58% As of February 18, 2022, women comprised 58% of our workforce and 64% of our management level/leadership roles. 28% As of February 18, 2022, 28% of our team members self-identified as being members of one or more ethnic minorities. We believe our ethnic diversity is higher than this reported percentage as another 19% of our team members chose not to self-identify. February 22, 2022 Investor Presentation 11 ENVIRONMENTAL, SOCIAL AND GOVERNANCE
February 22, 2022 Investor Presentation 12 Ethics. Transparency. Accountability. Our strong, independent board brings unique skill sets and relevant experience that enrich our decision making. Healthcare Real Estate Finance Leadership Portfolio Management ESG Regulatory Risk Management Policy ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Our Success Is Predicated on a Healthy Portfolio 1 Excludes our unconsolidated joint venture which consists of 158 facilities and 7,056 units. 2 Occupancy Percentage and Skilled Mix (together, “Operating Statistics”) and EBITDARM Coverage for each period presented include only Stabilized Facilities owned by the Company as of the end of such period and only for the duration such facilities were owned by the Company and classified as Stabilized Facilities. In addition, EBITDARM Coverage and Operating Statistics are presented for the twelve months ended at the end of the respective period and one quarter in arrears, and therefore, EBITDARM Coverage and Operating Statistics exclude assets acquired after September 30, 2021. 3 Effective February 1, 2022, Avamere’s annual base rent on the current portfolio has been reduced to $30.7 million from $44.1 million. Pro forma EBITDARM Coverage illustrates the impact of this rent reduction on our historical trailing twelve-month EBITDARM Coverages for Avamere, our Skilled Nursing/Transitional Care portfolio and our aggregate Post Acute and Other portfolio. 7 Years Wtd. Avg. Remaining Lease Term 443 Investments1 2.16x 1.04x 76 Relationships 40% Skilled Mix2 Average Occupancy Percentage2 71% 78% 79% 83% SH - Leased SH - Managed Hosp./Oth.SNF/TC SNF/TC/Hosp./Oth. SH - Leased Pro Forma Rent Coverage2,3 PORTFOLIO As of December 31, 2021 February 22, 2022 Investor Presentation 13
1 Concentrations exclude our unconsolidated joint venture which consists of 158 facilities and 7,056 units. Relationship and asset class concentrations include real estate investments and investments in loans receivable and other investments. Relationship concentrations use Annualized Cash NOI, and asset class concentrations use Annualized Cash NOI, as adjusted to reflect Annualized Cash NOI from our sales-type lease, mortgage and construction loans receivable and preferred equity investments in the related asset class of the underlying real estate. See the Appendix to this presentation for the definition of Annualized Cash NOI. Diverse Portfolio, Positioned to Perform Relationship Concentration1 Asset Class Concentration1 PORTFOLIO North American Healthcare, 8.6% Signature Healthcare, 8.4% Avamere Family of Companies, 6.8% Signature Behavioral, 6.8% Recovery Centers of America, 5.3% Holiday, 4.5% Enlivant, 1.2%Other, 2.8% Other, 55.6% Specialty Hospital and Other, 17.0% Senior Housing - Leased, 12.6% Senior Housing - Managed, 8.5% Other, 0.5% Skilled Nursing/ Transitional Care, 61.4% Managed (No Operator Credit Exposure), 8.5% As of December 31, 2021 February 22, 2022 Investor Presentation 14
“We invest in relationships with operators who are nimble and poised to deliver excellent care now and in the future.” -Peter Nyland, Executive Vice President, Asset Management PORTFOLIO February 22, 2022 Investor Presentation 15
COVID-19 Impact on Our Business PORTFOLIO ▪ From the beginning of the COVID-19 pandemic through January 2022, we have collected 99.6% of our forecasted rents. This includes drawing on a letter of credit to fund $11.9 million of rent from Avamere. Rent collections through the first three weeks of February are in line with what we normally receive through this point of the month. ▪ We continue to maintain a strong Net Debt to Adjusted EBITDA ratio of 4.98x as of December 31, 2021. ▪ As of December 31, 2021, we had approximately $1.1 billion of liquidity, consisting of unrestricted cash and cash equivalents of $112.0 million and available borrowings of $1.0 billion under our revolving credit facility. As of December 31, 2021, we also had $475.0 million available under the ATM Program. February 22, 2022 Investor Presentation 16
COVID-19 Impact on Our Portfolio (Cont.) PORTFOLIO OCCUPANCY TRENDS – SKILLED NURSING ▪ On average, Sabra’s seven largest skilled nursing tenants (representing 39% of Annualized Cash NOI) saw a slight sequential decline in occupancy in the fourth quarter driven primarily by the rise of the Omicron variant of COVID-19, as well as admissions restrictions related to state mandates and labor shortages. These headwinds continued into January, while preliminary data for February suggests occupancy is beginning to rebound. Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 North American 77.5% 79.6% 78.7% 78.7% 79.8% 79.7% 78.9% Signature Healthcare 75.5% 76.4% 76.2% 76.5% 76.8% 76.7% 75.9% Avamere 75.5% 75.6% 72.7% 71.7% 69.6% 70.8% 71.8% Cadia 81.8% 83.1% 84.5% 82.9% 83.4% 82.8% 81.5% Healthmark 62.5% 64.0% 64.1% 64.0% 63.7% 64.7% 64.8% The McGuire Group 81.1% 82.7% 85.3% 85.4% 84.2% 83.4% 84.5% CommuniCare 80.2% 80.8% 83.2% 83.0% 81.6% 79.3% 79.0% Total 75.7% 76.7% 76.6% 76.4% 76.0% 76.0% 75.8% February 22, 2022 Investor Presentation 17
4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Occupancy - AL 77.9% 68.8% 70.8% 73.5% 73.3% Sequential Change (9.1)% 2.0% 2.7% (0.2)% Occupancy - IL 80.5% 79.0% 78.6% 79.8% 80.7% Sequential Change (1.5)% (0.4)% 1.2% 0.9% Resident fees and services 38,343$ 35,675$ 36,636$ 37,002$ 37,852$ Sequential Change (7.0)% 2.7% 1.0% 2.3% Cash NOI 10,199$ 6,945$ 9,316$ 8,246$ 7,374$ Sequential Change (31.9)% 34.1% (11.5)% (10.6)% COVID-19 Impact on Our Portfolio (Cont.) PORTFOLIO SAME-STORE SENIOR HOUSING – MANAGED ▪ After several months of steady gains following the implementation of vaccine clinics, occupancy growth slowed in the fourth quarter due to the rise of the Omicron variant of COVID-19 and normal seasonality. In addition, Cash NOI declined sequentially as revenue growth was more than offset by operating expense headwinds. Operating expense growth was concentrated in our assisted-living portfolio and was primarily driven by labor challenges that forced operators to increase wages and utilize agency staffing to fill open positions. 1 Resident fees and services and Cash NOI balances include $0.6 million and $0.5 million of Grant Income for 4Q 2020 and 2Q 2021, respectively. 1 February 22, 2022 Investor Presentation 18 1
Advancing the Quality of Care We Work with Operators Who Are: • Committed to their mission • Nimble • Regional experts • In markets with favorable demographics • Well-positioned for the future of healthcare delivery OPERATORS February 22, 2022 Investor Presentation 19
We Support Our Operators We Invest in Our Tenants’ Success: • Redevelopment • Expansion • Strategic development • Flexible equity and debt capital solutions OPERATORS February 22, 2022 Investor Presentation 20
Driving Performance with Free Access to Industry-Leading Business Intelligence Tools OPERATORS February 22, 2022 Investor Presentation 21
PointRight Solutions for SNF Tenants OPERATORS Data Integrity Audit (DIA) Real-time MDS verification analysis. Ensures accuracy and quality of MDS data with insights into PDPM reimbursement. Each MDS is checked for logical and clinical coding accuracy with helpful alerts to identify quality measure triggers and reimbursement items for compliance monitoring. • Using the DIA tool, Sabra facilities using PointRight were able to increase their reimbursement under Medicare Part A by a four-quarter average of $3.50 per day during calendar year 2021. PointRight® Pro 30® Rehospitalization PointRight® Pro 30® Rehospitalization shows overall performance with rehospitalization, which clinical cohorts are being manage well and areas for improvement. Performance can be shared over time with healthcare partners for market positioning with key referral and payer sources. • From December 2019 through October 2021, Sabra facilities using PointRight have been able to reduce rehospitalizations by 0.5%. Five-Star FastTrack PointRight® Five-Star FastTrack® provides interactive monitoring and management of CMS Five- Star Quality Rating performance. The “What If” features allow setting of targets for improvement efforts. Enables proactive Five-Star performance management, helping users quickly attain and maintain optimal Five-Star ratings. • From May 2020 to October 2021, 17% of Sabra's facilities using PointRight have improved their CMS Quality Measure rating to five-stars. February 22, 2022 Investor Presentation 22
“What started with a single sale/leaseback transaction for a senior living community in Indiana has grown into a multi-state, multi- community relationship. We truly value the collaboration, insight and support we receive from Sabra. Sabra is who we think about first when it comes to a capital partner to support our company’s growth.” – Tom Smith, Chief Executive Officer & Co-Founder Leo Brown Group OPERATORS February 22, 2022 Investor Presentation 23
PERFORMANCE “With a strong balance sheet and ready access to capital, Sabra is well-positioned to capitalize on investment opportunities and drive value for our shareholders.” –Michael Costa, Chief Financial Officer February 22, 2022 Investor Presentation 24
Balanced Capital Structure Common Equity Value 58% Secured Debt 1% Unsecured Debt 41% Capital Structure 1 Our diverse menu of capital options and $1.1 billion of available liquidity ensures that we have ready access to low cost capital to fund our growth. Our credit facility contains an accordion feature that can increase the total available borrowings to $2.75 billion (up from $2.0 billion plus CAD $125.0 million today). CONSOLIDATED ENTERPRISE VALUE $5.4B PERFORMANCE 1 As of 12/31/2021. Common equity value estimated using outstanding common stock of 230.4 million shares and Sabra’s closing pr ice of $13.53 as of 2/18/2022. February 22, 2022 Investor Presentation 25
Sabra 4Q 21 1 Investment grade peers median 2 Net Debt to Adjusted EBITDA 4.98x 3 6.12x Interest Coverage Ratio 5.19x 3 4.29x Debt as a % of Asset Value 34% 39% Secured Debt as a % of Asset Value 1% 5% Strong Investment-Grade Credit Metrics 1 Key credit statistics (except Net Debt to Adjusted EBITDA) are calculated in accordance with the credit agreement relating to the revolving credit facility and the indentures relating to our unsecured senior notes. 2 Investment-Grade Peers consists of WELL, VTR, OHI and NHI. The metrics used to calculate Investment-Grade Peers Median are sourced from most recent public filings with the SEC and may not be calculated in a manner identical to Sabra’s metrics. 3 Based on the trailing twelve-month period ended as of the date indicated. PERFORMANCE February 22, 2022 Investor Presentation 26
Favorable Profile with Staggered Maturities PERFORMANCE 1 Revolving Credit Facility is subject to two six-month extension options. 2 Represents actual contractual interest rates excluding private mortgage insurance and impact of interest rate derivative agreements. (Dollars in millions) Debt maturity profile at December 31, 2021 21 February 22, 2022 Investor Presentation 27
Attractive Relative Valuation PERFORMANCE -13.6% -3.9% 2.1% 5.8% 14.5% 20.6% SBRA CTRE NHI OHI LTC Big 2 Average 8.9% 3.2% 5.9% 6.6% 6.7% 9.5% SBRA Big 2 Average CTRE NHI LTC OHI 8.4x 9.6x 11.4x 11.5x 13.4x 20.2x SBRA OHI CTRE NHI LTC Big 2 Average 21% 13% 19% 55% 40% 63% 61% 87% 75% 8% 59% 32% 18% 6% 37% 1% 5% SBRA CTRE OHI Big 2 Average LTC NHI Senior Housing Skilled Nursing Other Forward FFO multiples 1 Dividend yield 2 Premium / discount to consensus NAV Portfolio composition (% Annualized Cash NOI) 4 Sources: SNL Financial as of 2/18/2022, unless otherwise noted. 1 Forward FFO multiple is calculated as stock price as of 2/18/2022 divided by the forward four quarter consensus FFO from SNL Financial. 2 Dividend yield is calculated as most recent quarterly dividends declared per share annualized divided by stock price as of 2/18/2022. 3 Big 2 average consists of WELL and VTR. 4 Represents latest available concentration for peers from company filings as of 2/18/2022. 5 Based on Annualized Cash NOI for the quarter ended 12/31/2021. See the appendix to this presentation for the definition of Annualized Cash NOI. 3 3 3 3 5 February 22, 2022 Investor Presentation 28
Well-Positioned Portfolio PERFORMANCE SNF concentration 1 1 Represents latest available concentration and coverage for peers as of 2/18/2022. 2 Based on Annualized Cash NOI as of 12/31/2021 for real estate investments, investments in loans receivable and other investments. See the appendix to this presentation for the definition of Annualized Cash NOI. 3 Represents SNF EBITDARM Coverage for LTC and NHI; total portfolio EBITDARM Coverage for OHI and CTRE. 4 See appendix to this presentation for the definition of EBITDARM Coverage. 5 Sabra EBITDARM coverage is pro forma for the impact of the Avamere rent reduction. Pro forma EBITDARM coverage illustrates the impact of this rent reduction on our historical trailing twelve-month EBITDARM Coverages for Avamere and our Skilled Nursing/Transitional Care portfolio. Top five relationships concentration 1 SNF EBITDARM coverage 1,3 SH EBITDARM coverage 1 61% 32% 59% 75% 87% SBRA NHI LTC OHI CTRE 36% 39% 50% 64% 64% SBRA OHI LTC NHI CTRE 1.04x 0.95x 0.99x 1.06x 1.10x SBRA WELL LTC NHI VTR 1.86x 1.52x 2.06x 2.70x 2.80x SBRA OHI LTC CTRE NHI2 2 4,5 4 February 22, 2022 Investor Presentation 29
February 22, 2022 Investor Presentation 30 Appendix
Adjusted EBITDA.* Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger- related costs, stock-based compensation expense under the Company’s long-term equity award program, and loan loss reserves. Adjusted EBITDA is an important non-GAAP supplemental measure of operating performance. Annualized Cash Net Operating Income (“Annualized Cash NOI”).* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Annualized Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Annualized Cash NOI as Annualized Revenues less operating expenses, excluding COVID-19 Pandemic Expenses, and non-cash revenues and expenses. Annualized Cash NOI excludes all other financial statement amounts included in net income. Annualized Revenues. The annual contractual rental revenues under leases and interest and other income generated by the Company’s loans receivable and other investments based on amounts invested and applicable terms as of the end of the period presented. Annualized Revenues do not include tenant recoveries, additional rents or Grant Income and are adjusted to (i) reflect actual payments received during the twelve months ended at the end of the respective period for leases no longer accounted for on an accrual basis, (ii) exclude residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis and (iii) reflect the reduction in Avamere’s annual base rent to $30.7 million effective February 1, 2022. Cash Net Operating Income (“Cash NOI”).* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Cash NOI as total revenues less operating expenses and non-cash revenues and expenses. Cash NOI excludes all other financial statement amounts included in net income. COVID-19 Pandemic Expenses. COVID-19 Pandemic Expenses consist primarily of (i) personal protective equipment (“PPE”) costs, (ii) incremental labor costs (including bonuses, hero pay and additional labor needed to implement new health and safety protocols) and (iii) incremental supply costs required to implement new health and safety protocols (e.g., disposable food containers and stronger disinfectants), in each case incurred by communities in our Senior Housing - Managed portfolio specifically as a result of the COVID-19 pandemic. EBITDARM. Earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses EBITDARM in determining EBITDARM Coverage. EBITDARM has limitations as an analytical tool. EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, EBITDARM does not represent a property’s net income or cash flows from operations and should not be considered an alternative to those indicators. The Company utilizes EBITDARM to evaluate the core operations of the properties by eliminating management fees, which may vary by operator/tenant and operating structure, and as a supplemental measure of the ability of the Company’s operators/tenants and relevant guarantors to generate sufficient liquidity to meet related obligations to the Company. EBITDARM Coverage. Represents the ratio of EBITDARM to cash rent for owned facilities (excluding Senior Housing - Managed communities) for the period presented. EBITDARM Coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of EBITDARM. EBITDARM Coverage includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. APPENDIX Definitions February 22, 2022 Investor Presentation 31
Funds From Operations (“FFO”) and Adjusted FFO (“AFFO”).* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations, or FFO, as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“Nareit”), and adjusted funds from operations, or AFFO (and related per share amounts) are important non-GAAP supplemental measures of the Company’s 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. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and the Company’s share of gains or losses from real estate dispositions related to its unconsolidated joint venture, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus the Company’s share of depreciation and amortization related to its unconsolidated joint venture, and real estate impairment charges of both consolidated and unconsolidated entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. AFFO is defined as FFO excluding merger and acquisition costs, stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including ineffectiveness gain/loss on derivative instruments, and noncash revenue and expense amounts related to noncontrolling interests) and the Company’s share of non-cash adjustments related to its unconsolidated joint venture. The Company believes that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of the Company’s operating results among investors and makes comparisons of operating results among real estate investment trusts more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of real estate investment trusts, 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 and AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than the Company does. Grant Income. Grant Income consists of funds specifically paid to communities in our Senior Housing - Managed portfolio from state or federal governments related to the pandemic and were incremental to the amounts that would have otherwise been received for providing care to residents. Net Debt. The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements, net of cash and cash equivalents as reported in the Company’s consolidated financial statements. Net Debt to Adjusted EBITDA. Net Debt to Adjusted EBITDA is calculated as Net Debt divided by Annualized Adjusted EBITDA, which is Adjusted EBITDA, as adjusted for annualizing adjustments that give effect to the acquisitions and dispositions completed during the respective period as though such acquisitions and dispositions were completed as of the beginning of the period presented. Occupancy Percentage. Occupancy Percentage represents the facilities’ average operating occupancy for the period indicated. The percentages are calculated by dividing the actual census from the period presented by the available beds/units for the same period. Occupancy includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. APPENDIX Definitions February 22, 2022 Investor Presentation 32
Senior Housing. Senior Housing communities include independent living, assisted living, continuing care retirement and memory care communities. Senior Housing - Managed. Senior Housing communities operated by third-party property managers pursuant to property management agreements. Skilled Mix. Skilled Mix is defined as the total Medicare and non-Medicaid managed care patient revenue at Skilled Nursing/Transitional Care facilities divided by the total revenues at Skilled Nursing/Transitional Care facilities for the period indicated. Skilled Mix includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. Skilled Nursing/Transitional Care. Skilled Nursing/Transitional Care facilities include skilled nursing, transitional care, multi-license designation and mental health facilities. Specialty Hospitals and Other. Includes acute care, long-term acute care, rehabilitation and behavioral hospitals, facilities that provide residential services, which may include assistance with activities of daily living, and other facilities not classified as Skilled Nursing/Transitional Care or Senior Housing. Stabilized Facility. At the time of acquisition, the Company classifies each facility as either stabilized or non-stabilized. In addition, the Company may classify a facility as non-stabilized after acquisition. Circumstances that could result in a facility being classified as non-stabilized include newly completed developments, facilities undergoing major renovations or additions, facilities being repositioned or transitioned to new operators, and significant transitions within the tenants’ business model. Such facilities are typically reclassified to stabilized upon the earlier of maintaining consistent occupancy (85% for Skilled Nursing/Transitional Care facilities and 90% for Senior Housing communities) or 24 months after the date of classification as non-stabilized. Stabilized Facilities exclude (i) facilities held for sale, (ii) strategic disposition candidates, (iii) facilities being transitioned to a new operator, (iv) facilities being transitioned from being leased by the Company to being operated by the Company and (v) facilities acquired during the three months preceding the period presented. * Non-GAAP Financial Measures: Reconciliations, definitions and important discussions regarding the usefulness and limitations of the Non-GAAP Financial Measures used in this presentation can be found in the Investors section of our website at https://ir.sabrahealth.com/investors/financials/quarterly- results/default.aspx. APPENDIX Definitions February 22, 2022 Investor Presentation 33