SUMMARIZED CONDENSED CONSOLIDATING INFORMATION (Tables)

9 Months Ended

Sep. 30, 2017

SUMMARIZED CONDENSED CONSOLIDATING INFORMATION [Abstract]

Schedule of Condensed Consolidating Balance Sheet (unaudited)

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2017

(in thousands)

(unaudited)



						Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾		Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾		Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾		Elimination			Consolidated
Assets
Real estate investments, net of accumulated depreciation	$	174		$	—	$	—	$	1,832,335	$	4,140,276	$	—		$	5,972,785
Loans receivable and other investments, net	(140		)	—		—		89,911		59,995		—			149,766
Cash and cash equivalents	25,214			—		—		1,014		4,645		—			30,873
Restricted cash	—			—		—		2,038		10,451		—			12,489
Lease intangible assets, net	—			—		—		22,801		240,016		—			262,817
Accounts receivable, prepaid expenses and other assets, net	2,219			30,483		—		87,304		43,771		(4,200		)	159,577
Intercompany	2,618,618			2,339,272		—		—		—		(4,957,890		)	—
Investment in subsidiaries	744,470			1,040,196		—		12,833		—		(1,797,499		)	—
Total assets	$	3,390,555		$	3,409,951	$	—	$	2,048,236	$	4,499,154	$	(6,759,589	)	$	6,588,307

Liabilities
Secured debt, net	$	—		$	—	$	—	$	—	$	257,571	$	—		$	257,571
Revolving credit facility	—			251,000		—		—		—		—			251,000
Term loans, net	—			1,091,939		—		98,948		—		—			1,190,887
Senior unsecured notes, net	—			1,305,996		—		—		—		—			1,305,996
Accounts payable and accrued liabilities	21,452			16,546		—		7,230		75,118		(4,200		)	116,146
Lease intangible liabilities, net	—			—		—		—		94,878		—			94,878
Intercompany	—			—		—		941,667		4,016,223		(4,957,890		)	—
Total liabilities	21,452			2,665,481		—		1,047,845		4,443,790		(4,962,090		)	3,216,478

Total Sabra Health Care REIT, Inc. stockholders' equity	3,369,103			744,470		—		1,000,391		52,638		(1,797,499		)	3,369,103
Noncontrolling interests	—			—		—		—		2,726		—			2,726
Total equity	3,369,103			744,470		—		1,000,391		55,364		(1,797,499		)	3,371,829
Total liabilities and equity	$	3,390,555		$	3,409,951	$	—	$	2,048,236	$	4,499,154	$	(6,759,589	)	$	6,588,307


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016

(in thousands)

(unaudited)



						Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾		Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾		Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾		Elimination			Consolidated
Assets
Real estate investments, net of accumulated depreciation	$	150		$	—	$	—	$	1,860,850	$	148,939	$	—		$	2,009,939
Loans receivable and other investments, net	(410		)	—		—		96,446		—		—			96,036
Cash and cash equivalents	18,168			—		—		2,675		4,820		—			25,663
Restricted cash	—			—		—		57		8,945		—			9,002
Lease intangible assets, net	—			—		—		25,489		761		—			26,250
Accounts receivable, prepaid expenses and other assets, net	2,859			18,023		—		70,812		9,244		(1,909		)	99,029
Intercompany	368,281			687,493		—		—		25,125		(1,080,899		)	—
Investment in subsidiaries	640,238			907,136		—		12,364		—		(1,559,738		)	—
Total assets	$	1,029,286		$	1,612,652	$	—	$	2,068,693	$	197,834	$	(2,642,546	)	$	2,265,919

Liabilities
Secured debt, net	$	—		$	—	$	—	$	—	$	160,752	$	—		$	160,752
Revolving credit facility	—			26,000		—		—		—		—			26,000
Term loans, net	—			243,626		—		92,047		—		—			335,673
Senior unsecured notes, net	—			688,246		—		—		—		—			688,246
Accounts payable and accrued liabilities	13,712			14,542		—		11,606		1,688		(1,909		)	39,639
Intercompany	—			—		—		1,080,899		—		(1,080,899		)	—
Total liabilities	13,712			972,414		—		1,184,552		162,440		(1,082,808		)	1,250,310

Total Sabra Health Care REIT, Inc. stockholders' equity	1,015,574			640,238		—		884,141		35,359		(1,559,738		)	1,015,574
Noncontrolling interests	—			—		—		—		35		—			35
Total equity	1,015,574			640,238		—		884,141		35,394		(1,559,738		)	1,015,609
Total liabilities and equity	$	1,029,286		$	1,612,652	$	—	$	2,068,693	$	197,834	$	(2,642,546	)	$	2,265,919

Schedule of Condensed Consolidating Statement of Income (unaudited)

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Three Months Ended September 30, 2017

(dollars in thousands, except per share amounts)

(unaudited)



							Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾			Elimination			Consolidated
Revenues:
Rental income	$	—		$	—		$	—	$	54,640		$	48,692		$	(3,187	)	$	100,145
Interest and other income	8			47			—		1,991			2,091			(47		)	4,090
Resident fees and services	—			—			—		—			7,554			—			7,554
Total revenues	8			47			—		56,631			58,337			(3,234		)	111,789
Expenses:
Depreciation and amortization	217			—			—		15,500			10,216			—			25,933
Interest	—			21,765			—		792			2,011			—			24,568
Operating expenses	—			—			—		—			8,289			(3,187		)	5,102
General and administrative	10,058			16			—		1,671			1,199			—			12,944
Merger and acquisition costs	23,287			—			—		12			—			—			23,299
Provision for doubtful accounts and loan losses	533			—			—		4,616			—			—			5,149
Total expenses	34,095			21,781			—		22,591			21,715			(3,187		)	96,995
Other income (expense):
Loss on extinguishment of debt	—			(422		)	—		(131		)	—			—			(553		)
Other income (expense)	349			688			—		(986		)	—			—			51
Net gain (loss) on sales of real estate	—			—			—		614			(32		)	—			582
Total other income (expense)	349			266			—		(503		)	(32		)	—			80

Income in subsidiary	49,145			70,613			—		1,808			—			(121,566		)	—
Income before income tax expense	15,407			49,145			—		35,345			36,590			(121,613		)	14,874
Income tax benefit (expense)	(265		)	—			—		482			(22		)	—			195
Net income	15,142			49,145			—		35,827			36,568			(121,613		)	15,069
Net income attributable to noncontrolling interests	—			—			—		—			26			—			26
Net income attributable to Sabra Health Care REIT, Inc.	15,142			49,145			—		35,827			36,594			(121,613		)	15,095
Preferred stock dividends	(2,561		)	—			—		—			—			—			(2,561		)
Net income attributable to common stockholders	$	12,581		$	49,145		$	—	$	35,827		$	36,594		$	(121,613	)	$	12,534

Net loss attributable to common stockholders, per:
Basic common share																		$	0.11
Diluted common share																		$	0.11
Weighted-average number of common shares outstanding, basic																		112,149,638
Weighted-average number of common shares outstanding, diluted																		112,418,100


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Three Months Ended September 30, 2016

(dollars in thousands, except per share amounts)

(unaudited)



						Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾		Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾			Elimination			Consolidated
Revenues:
Rental income	$	—		$	—	$	—	$	52,233		$	5,187		$	(587	)	$	56,833
Interest and other income	1			—		—		3,156			68			(68		)	3,157
Resident fees and services	—			—		—		—			1,937			—			1,937
Total revenues	1			—		—		55,389			7,192			(655		)	61,927
Expenses:
Depreciation and amortization	211			—		—		15,320			1,571			—			17,102
Interest	—			13,215		—		878			1,701			—			15,794
Operating expenses	—			—		—		—			1,991			(587		)	1,404
General and administrative	4,527			21		—		375			43			—			4,966
Merger and acquisition costs	(105		)	—		—		1,156			—			—			1,051
Provision for doubtful accounts and loan losses	566			—		—		(26		)	—			—			540
Total expenses	5,199			13,236		—		17,703			5,306			(587		)	40,857
Other income (expense):
Other income (expense)	2,636			400		—		(91		)	—			—			2,945
Net gain on sales of real estate	—			—		—		1,451			—			—			1,451
Total other income (expense)	2,636			400		—		1,360			—			—			4,396

Income in subsidiary	28,073			40,909				1,711			—			(70,693		)	—
Income before income tax expense	25,511			28,073		—		40,757			1,886			(70,761		)	25,466
Income tax expense	(106		)	—		—		(27		)	(21		)	—			(154		)
Net income	25,405			28,073		—		40,730			1,865			(70,761		)	25,312
Net loss attributable to noncontrolling interests	—			—		—		—			25			—			25
Net income attributable to Sabra Health Care REIT, Inc.	25,405			28,073		—		40,730			1,890			(70,761		)	25,337
Preferred stock dividends	(2,561		)	—		—		—			—			—			(2,561		)
Net income attributable to common stockholders	$	22,844		$	28,073	$	—	$	40,730		$	1,890		$	(70,761	)	$	22,776

Net loss attributable to common stockholders, per:
Basic common share																	$	0.35
Diluted common share																	$	0.35
Weighted-average number of common shares outstanding, basic																	65,312,288
Weighted-average number of common shares outstanding, diluted																	65,591,428


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Nine Months Ended September 30, 2017

(dollars in thousands, except per share amounts)

(unaudited)



							Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾				Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾			Elimination			Consolidated
Revenues:
Rental income	$	—		$	—		$	—	$	160,121			$	58,316		$	(5,164	)	$	213,273
Interest and other income	21			47			—		6,014				2,045			(65		)	8,062
Resident fees and services	—			—			—		—				17,840			—			17,840
Total revenues	21			47			—		166,135				78,201			(5,229		)	239,175
Expenses:
Depreciation and amortization	649			—			—		47,882				13,759			—			62,290
Interest	—			48,689			—		2,237				5,292			—			56,218
Operating expenses	—			—			—		—				17,111			(5,182		)	11,929
General and administrative	19,380			47			—		3,429				1,303			—			24,159
Merger and acquisition costs	29,703			—			—		47				—			—			29,750
Provision for doubtful accounts and loan losses	615			—			—		6,839				—			—			7,454
Total expenses	50,347			48,736			—		60,434				37,465			(5,182		)	191,800
Other income (expense):
Loss on extinguishment of debt	—			(422		)	—		(131		)		—			—			(553		)
Other income (expense)	2,634			707			—		(220		)		—			—			3,121
Net gain (loss) on sale of real estate	—			—			—		4,640				(26		)	—			4,614
Total other income (expense)	2,634			285			—		4,289				(26		)	—			7,182

Income in subsidiary	102,474			150,879			—		5,372				—			(258,725		)	—
Income before income tax expense	54,782			102,475			—		115,362				40,710			(258,772		)	54,557
Income tax expense	(297		)	(1		)	—		255				(118		)	—			(161		)
Net income	54,485			102,474			—		115,617				40,592			(258,772		)	54,396
Net loss attributable to noncontrolling interests	—			—			—		—				42			—			42
Net income attributable to Sabra Health Care REIT, Inc.	54,485			102,474			—		115,617				40,634			(258,772		)	54,438
Preferred stock dividends	(7,682		)	—			—		—				—			—			(7,682		)
Net income attributable to common stockholders	$	46,803		$	102,474		$	—	$	115,617		—	$	40,634		$	(258,772	)	$	46,756

Net loss attributable to common stockholders, per:
Basic common share																			$	0.58
Diluted common share																			$	0.57
Weighted-average number of common shares outstanding, basic																			81,150,846
Weighted-average number of common shares outstanding, diluted																			81,429,044


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Nine Months Ended September 30, 2016

(dollars in thousands, except per share amounts)

(unaudited)



							Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾			Elimination			Consolidated
Revenues:
Rental income	$	—		$	—		$	—	$	153,658		$	15,533		$	(1,749	)	$	167,442
Interest and other income	3			—			—		25,490			196			(207		)	25,482
Resident fees and services	—			—			—		—			5,811			—			5,811
Total revenues	3			—			—		179,148			21,540			(1,956		)	198,735
Expenses:
Depreciation and amortization	595			—			—		45,955			4,723			—			51,273
Interest	—			41,238			—		2,772			5,129			—			49,139
Operating expenses	—			—			—		—			6,016			(1,760		)	4,256
General and administrative	12,440			42			—		902			129			—			13,513
Merger and acquisition costs	50			—			—		1,171			1			—			1,222
Provision for doubtful accounts and loan losses	(89		)	—			—		3,375			—			—			3,286
Impairment of real estate	—			—			—		29,811			—			—			29,811
Total expenses	12,996			41,280			—		83,986			15,998			(1,760		)	152,500
Other income (expense):
Loss on extinguishment of debt	—			(468		)	—		(88		)	—			—			(556		)
Other income (expense)	4,732			916			—		(230		)	(73		)	—			5,345
Net gain on sales of real estate	—			—			—		(3,203		)	—			—			(3,203		)
Total other income (expense)	4,732			448			—		(3,521		)	(73		)	—			1,586

Income in subsidiary	55,783			96,616			—		5,081			—			(157,480		)	—
Income before income tax expense	47,522			55,784			—		96,722			5,469			(157,676		)	47,821
Income tax expense	(225		)	(1		)	—		(512		)	(48		)	—			(786		)
Net income	47,297			55,783			—		96,210			5,421			(157,676		)	47,035
Net loss attributable to noncontrolling interests	—			—			—		—			66			—			66
Net income attributable to Sabra Health Care REIT, Inc.	47,297			55,783			—		96,210			5,487			(157,676		)	47,101
Preferred stock dividends	(7,682		)	—			—		—			—			—			(7,682		)
Net income attributable to common stockholders	$	39,615		$	55,783		$	—	$	96,210		$	5,487		$	(157,676	)	$	39,419

Net loss attributable to common stockholders, per:
Basic common share																		$	0.60
Diluted common share																		$	0.60
Weighted-average number of common shares outstanding, basic																		65,285,591
Weighted-average number of common shares outstanding, diluted																		65,470,589

Schedule of Condensed Consolidating Statement of Comprehensive Income

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2017

(dollars in thousands)

(unaudited)



						Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾		Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾		Elimination			Consolidated
Net income	$	15,142	$	49,145		$	—	$	35,827		$	36,568	$	(121,613	)	$	15,069
Other comprehensive income (loss):
Unrealized gain (loss), net of tax:
Foreign currency translation gain (loss)	—		(1,352		)	—		1,335			429		—			412
Unrealized gain (loss) on cash flow hedges⁽⁷⁾	—		4,964			—		(307		)	—		—			4,657
Total other comprehensive income (loss)	—		3,612			—		1,028			429		—			5,069
Comprehensive income	15,142		52,757			—		36,855			36,997		(121,613		)	20,138
Comprehensive income attributable to noncontrolling interest	—		—			—		—			26		—			26
Comprehensive income attributable to Sabra Health Care REIT, Inc.	$	15,142	$	52,757		$	—	$	36,855		$	37,023	$	(121,613	)	$	20,164


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.


⁽⁷⁾	Amounts are net of provision for income taxes of $0.4 million for the three months ended September 30, 2017.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2016

(dollars in thousands)

(unaudited)



					Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾		Operating Partnership⁽²⁾		Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾			Elimination			Consolidated
Net income	$	25,405	$	28,073	$	—	$	40,730		$	1,865		$	(70,761	)	$	25,312
Other comprehensive income (loss):
Unrealized gain (loss), net of tax:
Foreign currency translation gain (loss)	—		153		—		(512		)	(141		)	—			(500		)
Unrealized gain on cash flow hedges	—		398		—		—			—			—			398
Total other comprehensive income (loss)	—		551		—		(512		)	(141		)	—			(102		)
Comprehensive income	25,405		28,624		—		40,218			1,724			(70,761		)	25,210
Comprehensive loss attributable to noncontrolling interest	—		—		—		—			25			—			25
Comprehensive income attributable to Sabra Health Care REIT, Inc.	$	25,405	$	28,624	$	—	$	40,218		$	1,749		$	(70,761	)	$	25,235


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2017

(dollars in thousands)

(unaudited)



						Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾		Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾		Elimination			Consolidated
Net income	$	54,485	$	102,474		$	—	$	115,617		$	40,592	$	(258,772	)	$	54,396
Other comprehensive income (loss):
Unrealized gain (loss), net of tax:
Foreign currency translation gain (loss)	—		(2,718		)	—		2,466			804		—			552
Unrealized gain (loss) on cash flow hedges⁽⁷⁾	—		5,977			—		(495		)	—		—			5,482
Total other comprehensive income (loss)	—		3,259			—		1,971			804		—			6,034
Comprehensive income	54,485		105,733			—		117,588			41,396		(258,772		)	60,430
Comprehensive loss attributable to noncontrolling interest	—		—			—		—			42		—			42
Comprehensive income attributable to Sabra Health Care REIT, Inc.	$	54,485	$	105,733		$	—	$	117,588		$	41,438	$	(258,772	)	$	60,472


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.


⁽⁷⁾	Amounts are net of provision for income taxes of $0.6 million for the nine months ended September 30, 2017.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2016

(dollars in thousands)

(unaudited)



						Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾		Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾		Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾		Elimination			Consolidated
Net income	$	47,297	$	55,783		$	—	$	96,210	$	5,421	$	(157,676	)	$	47,035
Other comprehensive income (loss):
Unrealized gain (loss), net of tax:
Foreign currency translation gain (loss)	—		(2,204		)	—		1,144		311		—			(749		)
Unrealized loss on cash flow hedges	—		(1,300		)	—		—		—		—			(1,300		)
Total other comprehensive income (loss)	—		(3,504		)	—		1,144		311		—			(2,049		)
Comprehensive income	47,297		52,279			—		97,354		5,732		(157,676		)	44,986
Comprehensive loss attributable to noncontrolling interest	—		—			—		—		66		—			66
Comprehensive income attributable to Sabra Health Care REIT, Inc.	$	47,297	$	52,279		$	—	$	97,354	$	5,798	$	(157,676	)	$	45,052

Schedule of Condensed Consolidating Statement of Cash Flows (unaudited)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2017

(in thousands)

(unaudited)



							Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾			Elimination			Consolidated
Net cash provided by operating activities	$	40,567		$	—		$	—	$	4,122		$	5,082		$	—		$	49,771
Cash flows from investing activities:
Acquisition of real estate	—			—			—		(393,064		)	—			—			(393,064		)
Cash received in CCP Merger	77,858			—			—		—			—			—			77,858
Origination and fundings of loans receivable	—			—			—		(1,488		)	(4,154		)	—			(5,642		)
Origination and fundings of preferred equity investments	—			—			—		(2,713		)	—			—			(2,713		)
Additions to real estate	(22		)	—			—		(2,847		)	(364		)	—			(3,233		)
Repayment of loans receivable	—			—			—		2,221			6,489			—			8,710
Repayments of preferred equity investments	—			—			—		3,239			—			—			3,239
Net proceeds from the sales of real estate	—			—			—		11,328			395			—			11,723
Distribution from subsidiaries	2,474			2,474			—		—			—			(4,948		)	—
Intercompany financing	(346,044		)	(374,728		)	—		—			—			720,772			—
Net cash provided by (used in) investing activities	(265,734		)	(372,254		)	—		(383,324		)	2,366			715,824			(303,122		)
Cash flows from financing activities:
Net repayments of revolving credit facility	—			(137,000		)	—		—			—			—			(137,000		)
Proceeds from term loans	—			181,000			—		—			—			—			181,000
Principal payments on secured debt	—			—			—		—			(3,094		)	—			(3,094		)
Payments of deferred financing costs	—			(15,316		)	—		—			—			—			(15,316		)
Issuance of common stock, net	319,026			—			—		—			—			—			319,026
Dividends paid on common and preferred stock	(86,813		)	—			—		—			—			—			(86,813		)
Distribution to parent	—			(2,474		)	—		—			(2,474		)	4,948			—
Intercompany financing	—			346,044			—		377,458			(2,730		)	(720,772		)	—
Net cash provided by (used in) financing activities	232,213			372,254			—		377,458			(8,298		)	(715,824		)	257,803
Net increase (decrease) in cash and cash equivalents	7,046			—			—		(1,744		)	(850		)	—			4,452
Effect of foreign currency translation on cash and cash equivalents	—			—			—		83			675			—			758
Cash and cash equivalents, beginning of period	18,168			—			—		2,675			4,820			—			25,663
Cash and cash equivalents, end of period	$	25,214		$	—		$	—	$	1,014		$	4,645		$	—		$	30,873


⁽¹⁾	The Parent Company guarantees the 2021 Notes, the 2023 Notes and the 2026 Notes.


⁽²⁾	The Operating Partnership is the co-issuer of the 2021 Notes and the 2023 Notes and the issuer of the 2026 Notes.


⁽³⁾	Sabra Capital Corporation is the co-issuer of the 2021 Notes and the 2023 Notes.


⁽⁴⁾	The Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2021 Notes and the 2023 Notes.


⁽⁵⁾	The Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes consist of the subsidiaries that do not guarantee the 2021 Notes and the 2023 Notes.


⁽⁶⁾	None of Sabra Capital Corporation, the Combined Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes, nor the Combined Non-Guarantor Subsidiaries of the 2021 Notes and the 2023 Notes guarantee the 2026 Notes.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2016

(in thousands)

(unaudited)



							Combined Non-Guarantor Subsidiaries of 2026 Notes⁽⁶⁾
	Parent Company⁽¹⁾			Operating Partnership⁽²⁾			Sabra Capital Corporation⁽³⁾		Combined Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁴⁾			Combined Non- Guarantor Subsidiaries of 2021 Notes and 2023 Notes⁽⁵⁾			Elimination			Consolidated
Net cash provided by (used in) operating activities	$	113,886		$	—		$	—	$	10,683		$	9,247		$	—		$	133,816
Cash flows from investing activities:
Acquisitions of real estate	—			—			—		(109,619		)	—			—			(109,619		)
Origination and fundings of loans receivable	—			—			—		(9,478		)	—			—			(9,478		)
Origination and fundings of preferred equity investments	—			—			—		(6,845		)	—			—			(6,845		)
Additions to real estate	(124		)	—			—		(400		)	(377		)	—			(901		)
Repayment of loans receivable	—			—			—		214,947			—			—			214,947
Investment in subsidiaries	(200		)	(200		)	—		—			—			400			—
Net proceeds from the sale of real estate	—			—			—		85,449			—			—			85,449
Distribution from subsidiaries	6,404			6,404			—		—			—			(12,808		)	—
Intercompany financing	(17,684		)	197,638			—		—			—			(179,954		)	—
Net cash provided by (used in) investing activities	(11,604		)	203,842			—		174,054			(377		)	(192,362		)	173,553
Cash flows from financing activities:
Net repayments of revolving credit facility	—			(255,000		)	—		—			—			—			(255,000		)
Proceeds from term loans	—			45,000			—		24,360			—			—			69,360
Principal payments on secured debt	—			—			—		(10,766		)	(2,990		)	—			(13,756		)
Payments of deferred financing costs	—			(5,322		)	—		(611		)	—			—			(5,933		)
Issuance of common stock, net	(1,289		)	—			—		—			—			—			(1,289		)
Dividends paid on common and preferred stock	(89,283		)	—			—		—			—			—			(89,283		)
Contribution from parent	—			200			—		—			200			(400		)	—
Distribution to parent	—			(6,404		)	—		—			(6,404		)	12,808			—
Intercompany financing	—			17,684			—		(197,638		)	—			179,954			—
Net cash provided by (used in) financing activities	(90,572		)	(203,842		)	—		(184,655		)	(9,194		)	192,362			(295,901		)
Net increase (decrease) in cash and cash equivalents	11,710			—			—		82			(324		)	—			11,468
Effect of foreign currency translation on cash and cash equivalents	—			—			—		756			16			—			772
Cash and cash equivalents, beginning of period	2,548			—			—		1,008			3,878			—			7,434
Cash and cash equivalents, end of period	$	14,258		$	—		$	—	$	1,846		$	3,570		$	—		$	19,674