SUMMARIZED CONDENSED CONSOLIDATING INFORMATION

In connection with the offering of the Senior Notes by the Issuers in October 2010, the Company and certain 100% owned subsidiaries of the Company (the “Guarantors”) have, jointly and severally, fully and unconditionally guaranteed the Senior Notes. These guarantees are subordinated to all existing and future senior debt and senior guarantees of the Guarantors and are unsecured. The Company conducts all of its business through and derives virtually all of its income from its subsidiaries. Therefore, the Company’s ability to make required payments with respect to its indebtedness (including the Senior Notes) and other obligations depends on the financial results and condition of its subsidiaries and its ability to receive funds from its subsidiaries.

Pursuant to Rule 3-10 of Regulation S-X, the following summarized consolidating information is provided for the Company (the “Parent Company”), the Issuers, the Guarantors, and the Company’s non-Guarantor subsidiaries with respect to the Senior Notes. This summarized financial information has been prepared from the books and records maintained by the Company, the Issuers, the Guarantors and the non-Guarantor subsidiaries. The summarized financial information may not necessarily be indicative of the results of operations or financial position had the Issuers, the Guarantors or non-Guarantor subsidiaries operated as independent entities. Sabra’s investments in its consolidated subsidiaries, are presented based upon Sabra's proportionate share of each subsidiary's net assets. The Guarantor subsidiaries’ investments in the non-Guarantor subsidiaries and non-Guarantor subsidiaries’ investments in Guarantor subsidiaries, are presented under the equity method of accounting. Intercompany activities between subsidiaries and the Parent Company are presented within operating activities on the condensed consolidating statement of cash flows.

Condensed consolidating financial statements for the Company and its subsidiaries, including the Parent Company only, the Issuers, the combined Guarantor subsidiaries and the combined non-Guarantor subsidiaries are as follows:

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2011

(in thousands, except share and per share amounts)



	Parent Company			Issuers		Combined Guarantor Subsidiaries		Combined Non- Guarantor Subsidiaries		Elimination			Consolidated
Assets
Real estate investments, net of accumulated depreciation	$	210		$	—	$	354,293	$	188,087	$	—		$	542,590
Cash and cash equivalents	3,326			—		—		128		—			3,454
Restricted cash	—			—		—		5,524		—			5,524
Deferred tax assets	26,300			—		—		—		—			26,300
Prepaid expenses, deferred financing costs and other assets	769			5,425		8,704		3,036		—			17,934
Intercompany	37,258			—		—		20,785		(58,043		)	—
Investment in subsidiaries	139,005			371,378		23,316		—		(533,699		)	—
Total assets	$	206,868		$	376,803	$	386,313	$	217,560	$	(591,742	)	$	595,802
Liabilities and stockholders’ equity
Mortgage notes payable	$	—		$	—	$	—	$	159,935	$	—		$	159,935
Senior unsecured notes payable	—			225,000		—		—		—			225,000
Accounts payable and accrued liabilities	4,726			3,048		112		839		—			8,725
Tax liability	26,300			—		—		—		—			26,300
Intercompany	—			9,750		48,292		—		(58,042		)	—
Total liabilities	31,026			237,798		48,404		160,774		(58,042		)	419,960
Stockholders’ equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2011	—			—		—		—		—			—
Common stock, $.01 par value; 125,000,000 shares authorized, 25,138,248 shares issued and outstanding as of June 30, 2011	251			—		—		—		—			251
Additional paid-in capital	180,300			128,585		319,215		52,763		(500,563		)	180,300
Retained earnings	(4,709		)	10,420		18,694		4,023		(33,137		)	(4,709		)
Total stockholders’ equity	175,842			139,005		337,909		56,786		(533,700		)	175,842
Total liabilities and stockholders’ equity	$	206,868		$	376,803	$	386,313	$	217,560	$	(591,742	)	$	595,802

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2010

(in thousands, except share and per share amounts)



	Parent Company		Issuers		Combined Guarantor Subsidiaries		Combined Non- Guarantor Subsidiaries		Elimination			Consolidated
Assets
Real estate investments, net of accumulated depreciation	$	230	$	—	$	289,748	$	192,319	$	—		$	482,297
Cash and cash equivalents	70,841		—		—		3,392		—			74,233
Restricted cash	—		—		—		4,716		—			4,716
Deferred tax assets	26,300		—		—		—		—			26,300
Prepaid expenses, deferred financing costs and other assets	662		5,471		2,261		3,619		—			12,013
Intercompany	—		—		5,635		6,953		(12,588		)	—
Investment in subsidiaries	124,061		347,030		22,903		—		(493,994		)	—
Total assets	$	222,094	$	352,501	$	320,547	$	210,999	$	(506,582	)	$	599,559
Liabilities and stockholders’ equity
Mortgage notes payable	$	—	$	—	$	—	$	161,440	$	—		$	161,440
Senior unsecured notes payable	—		225,000		—		—		—			225,000
Accounts payable and accrued liabilities	5,673		3,440		81		92		—			9,286
Tax liability	26,300		—		—		—		—			26,300
Intercompany	12,588		—		—		—		(12,588		)	—
Total liabilities	44,561		228,440		81		161,532		(12,588		)	422,026
Stockholders’ equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2010	—		—		—		—		—			—
Common stock, $.01 par value; 125,000,000 shares authorized, 25,061,072 shares issued and outstanding as of December 31, 2010	251		—		—		—		—			251
Additional paid-in capital	177,275		122,281		316,786		48,670		(487,737		)	177,275
Retained earnings	7		1,780		3,680		797		(6,257		)	7
Total stockholders’ equity	177,533		124,061		320,466		49,467		(493,994		)	177,533
Total liabilities and stockholders’ equity	$	222,094	$	352,501	$	320,547	$	210,999	$	(506,582	)	$	599,559

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Three Months Ended June 30, 2011

(in thousands, except share and per share amounts)



	Parent Company			Issuers			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries		Elimination			Consolidated
Revenues:
Rental income	$	—		$	—		$	12,337		$	6,291	$	—		$	18,628
Interest income	13			—			162			2		—			177
Total revenues	13			—			12,499			6,293		—			18,805
Expenses:
Depreciation and amortization	12			—			4,173			2,105		—			6,290
Interest	—			4,653			324			2,528		—			7,505
General and administrative	2,686			—			208			29		—			2,923
Income in subsidiary	(4,772		)	(9,425		)	(105		)	—		14,302			—
Total expenses	(2,074		)	(4,772		)	4,600			4,662		14,302			16,718
Net income	$	2,087		$	4,772		$	7,899		$	1,631	$	(14,302	)	$	2,087
Net income per common share, basic															$	0.08
Net income per common share, diluted															$	0.08
Weighted-average number of common shares outstanding, basic															25,154,284
Weighted-average number of common shares outstanding, diluted															25,226,179

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Six Months Ended June 30, 2011

(in thousands, except share and per share amounts)



	Parent Company			Issuers			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries		Elimination			Consolidated
Revenues:
Rental income	$	—		$	—		$	23,608		$	12,582	$	—		$	36,190
Interest income	41			—			175			1		—			217
Total revenues	41			—			23,783			12,583		—			36,407
Expenses:
Depreciation and amortization	29			—			8,111			4,237		—			12,377
Interest	—			9,403			646			5,054		—			15,103
General and administrative	5,315			—			211			66		—			5,592
Income in subsidiary	(8,638		)	(18,041		)	(199		)	—		26,878			—
Total expenses	(3,294		)	(8,638		)	8,769			9,357		26,878			33,072
Net income	$	3,335		$	8,638		$	15,014		$	3,226	$	(26,878	)	$	3,335
Net income per common share, basic															$	0.13
Net income per common share, diluted															$	0.13
Weighted-average number of common shares outstanding, basic															25,140,781
Weighted-average number of common shares outstanding, diluted															25,210,575

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2011

(in thousands, except share and per share amounts)



	Parent Company			Issuers			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Elimination			Consolidated
Net cash provided by operating activities	$	16,386		$	—		$	—		$	1,542		$	—		$	17,928
Cash flows from investing activities:
Acquisitions of real estate	—			—			(74,000		)	—			—			(74,000		)
Acquisition of note receivable	(5,348		)	—			—			—			—			(5,348		)
Additions to real estate	(86		)	—			—			—			—			(86		)
Net cash used in investing activities	(5,434		)	—			(74,000		)	—			—			(79,434		)
Cash flows from financing activities:
Principal payments on mortgage notes payable	—			—			—			(1,499		)	—			(1,499		)
Payments of deferred financing costs	—			(270		)	—			—			—			(270		)
Issuance of common stock	547			—			—			—			—			547
Dividends paid	(8,051		)	—			—			—			—			(8,051		)
Distribution to Parent	—			—			—			(3,307		)	3,307			—
Distribution from Subsidiary	3,307			—			—			—			(3,307		)	—
Intercompany financing	(74,270		)	270			74,000			—			—			—
Net cash provided by (used in) financing activities	(78,467		)	—			74,000			(4,806		)	—			(9,273		)
Net increase in cash and cash equivalents	(67,515		)	—			—			(3,264		)	—			(70,779		)
Cash and cash equivalents, beginning of period	70,841			—			—			3,392			—			74,233
Cash and cash equivalents, end of period	$	3,326		$	—		$	—		$	128		$	—		$	3,454