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

September 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	$	197		$	—	$	463,038	$	186,016	$	—		$	649,251
Cash and cash equivalents	56,123			—		—		294		—			56,417
Restricted cash	—			—		—		6,286		—			6,286
Deferred tax assets	26,300			—		—		—		—			26,300
Prepaid expenses, deferred financing costs and other assets	319			5,244		11,302		2,926		—			19,791
Intercompany	—			154,180		—		22,843		(177,023		)	—
Investment in subsidiaries	307,416			380,609		23,445		—		(711,470		)	—
Total assets	$	390,355		$	540,033	$	497,785	$	218,365	$	(888,493	)	$	758,045
Liabilities and stockholders’ equity
Mortgage notes payable	$	—		$	—	$	—	$	159,180	$	—		$	159,180
Senior unsecured notes payable	—			225,000		—		—		—			225,000
Accounts payable and accrued liabilities	6,269			7,617		2,901		854		—			17,641
Tax liability	26,300			—		—		—		—			26,300
Intercompany	27,862			—		149,161		—		(177,023		)	—
Total liabilities	60,431			232,617		152,062		160,034		(177,023		)	428,121
Stockholders’ equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of September 30, 2011	—			—		—		—		—			—
Common stock, $.01 par value; 125,000,000 shares authorized, 36,868,248 shares issued and outstanding as of September 30, 2011	369			—		—		—		—			369
Additional paid-in capital	343,748			292,549		319,356		52,649		(664,554		)	343,748
Retained earnings	(14,193		)	14,867		26,367		5,682		(46,916		)	(14,193		)
Total stockholders’ equity	329,924			307,416		345,723		58,331		(711,470		)	329,924
Total liabilities and stockholders’ equity	$	390,355		$	540,033	$	497,785	$	218,365	$	(888,493	)	$	758,045

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 September 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	$	—		$	—		$	15,003		$	6,291	$	—		$	21,294
Interest income	12			—			163			1		—			176
Total revenues	12			—			15,166			6,292		—			21,470
Expenses:
Depreciation and amortization	13			—			4,763			2,074		—			6,850
Interest	—			4,755			336			2,533		—			7,624
General and administrative	2,104			—			2,522			26		—			4,652
Income in subsidiary	(4,449		)	(9,204		)	(128		)	—		13,781			—
Total expenses	(2,332		)	(4,449		)	7,493			4,633		13,781			19,126
Net income	$	2,344		$	4,449		$	7,673		$	1,659	$	(13,781	)	$	2,344
Net income per common share, basic															$	0.07
Net income per common share, diluted															$	0.07
Weighted-average number of common shares outstanding, basic															32,986,657
Weighted-average number of common shares outstanding, diluted															33,049,621

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Nine Months Ended September 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	$	—		$	—		$	38,609		$	18,874	$	—		$	57,483
Interest income	53			—			338			2		—			393
Total revenues	53			—			38,947			18,876		—			57,876
Expenses:
Depreciation and amortization	42			—			12,874			6,311		—			19,227
Interest	—			14,157			981			7,588		—			22,726
General and administrative	7,419			1			2,733			92		—			10,245
Income in subsidiary	(13,086		)	(27,244		)	(327		)	—		40,657			—
Total expenses	(5,625		)	(13,086		)	16,261			13,991		40,657			52,198
Net income	$	5,678		$	13,086		$	22,686		$	4,885	$	(40,657	)	$	5,678
Net income per common share, basic															$	0.20
Net income per common share, diluted															$	0.20
Weighted-average number of common shares outstanding, basic															27,797,411
Weighted-average number of common shares outstanding, diluted															27,891,690

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 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	$	32,101		$	—		$	—		$	2,408		$	—		$	34,509
Cash flows from investing activities:
Acquisitions of real estate	—			—			(187,700		)	—			—			(187,700		)
Acquisition of note receivable	(5,348		)	—			—			—			—			(5,348		)
Additions to real estate	(86		)	—			—			—			—			(86		)
Investment in Subsidiary	(163,984		)										163,984			—
Net cash used in investing activities	(169,418		)	—			(187,700		)	—			163,984			(193,134		)
Cash flows from financing activities:
Principal payments on mortgage notes payable	—			—			—			(2,249		)	—			(2,249		)
Payments of deferred financing costs	—			(495		)	—			—			—			(495		)
Issuance of common stock	163,431			—			—			—			—			163,431
Dividends paid	(19,878		)	—			—			—			—			(19,878		)
Contribution from Parent	—			163,934			—			50			(163,984		)	—
Distribution to Parent	—			—			—			(3,307		)	3,307			—
Distribution from Subsidiary	3,307			—			—			—			(3,307		)	—
Intercompany financing	(24,261		)	(163,439		)	187,700			—			—			—
Net cash provided by (used in) financing activities	122,599			—			187,700			(5,506		)	(163,984		)	140,809
Net decrease in cash and cash equivalents	(14,718		)	—			—			(3,098		)	—			(17,816		)
Cash and cash equivalents, beginning of period	70,841			—			—			3,392			—			74,233
Cash and cash equivalents, end of period	$	56,123		$	—		$	—		$	294		$	—		$	56,417