Reconciliations of Non-GAAP Financial Measures

September 30, 2018

(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 September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Net income attributable to common stockholders	$	35,218		$	12,534		$	288,708		$	46,756
Add:
Depreciation and amortization of real estate assets	48,468			25,933			143,301			62,290
Depreciation and amortization of real estate assets related to noncontrolling interests	(39		)	—			(119		)	—
Depreciation and amortization of real estate assets related to unconsolidated joint venture	5,214			—			15,929			—
Net gain on sales of real estate	(14		)	(582		)	(142,445		)	(4,614		)
Impairment of real estate	—			—			1,413			—
FFO attributable to common stockholders	$	88,847		$	37,885		$	306,787		$	104,432
Lease termination fee	—			(351		)	—			(2,634		)
CCP merger and transition costs	380			27,576			1,720			33,983
Loss on extinguishment of debt	—			553			—			553
Provision for doubtful accounts and loan losses, net	10,860			4,583			5,568			6,365
Other normalizing items (1)	6,430			51			9,402			163
Normalized FFO attributable to common stockholders	$	106,517		$	70,297		$	323,477		$	142,862
FFO attributable to common stockholders	$	88,847		$	37,885		$	306,787		$	104,432
Merger and acquisition costs (2)	151			23,299			593			29,750
Stock-based compensation expense	2,436			2,669			6,275			6,988
Straight-line rental income adjustments	(10,652		)	(8,682		)	(34,404		)	(18,260		)
Amortization of above and below market lease intangibles, net	5,561			637			4,193			637
Non-cash interest income adjustments	(548		)	(188		)	(1,722		)	(137		)
Non-cash interest expense	2,551			2,044			7,548			5,288
Non-cash portion of loss on extinguishment of debt	—			553			—			553
Change in fair value of contingent consideration	—			270			—			(552		)
Provision for doubtful straight-line rental income, loan losses and other reserves	8,801			4,886			11,293			6,810
Other non-cash adjustments related to unconsolidated joint venture	118			—			1,132			—
Other non-cash adjustments	25			30			55			215
AFFO attributable to common stockholders	$	97,290		$	63,403		$	301,750		$	135,724
CCP transition costs	286			4,297			1,220			4,297
Lease termination fee	—			(351		)	—			(2,634		)
Provision for (recovery of) doubtful cash income	108			263			(2,160		)	443
Other normalizing items (1)	180			21			3,152			59
Normalized AFFO attributable to common stockholders	$	97,864		$	67,633		$	303,962		$	137,889
Amounts per diluted common share attributable to common stockholders:
Net income	$	0.20		$	0.11		$	1.62		$	0.57
FFO	$	0.50		$	0.34		$	1.72		$	1.28
Normalized FFO	$	0.60		$	0.63		$	1.81		$	1.75
AFFO	$	0.54		$	0.56		$	1.68		$	1.66
Normalized AFFO	$	0.55		$	0.60		$	1.69		$	1.69
Weighted average number of common shares outstanding, diluted:
Net income, FFO and Normalized FFO	178,941,213			112,418,100			178,729,853			81,429,044
AFFO and Normalized AFFO	179,469,883			112,693,779			179,428,243			81,741,288

⁽¹⁾  Other normalizing items for FFO and AFFO for the three and nine months ended September 30, 2018 include $6.3 million of acceleration of above market lease intangible amortization. In addition, the nine months ended September 30, 2018 includes $ $5.5 million of capitalized issuance costs related to our preferred stock issuance that were written off as a result of the June 1, 2018 preferred stock redemption and $0.6 million of expenses related to the previously anticipated refinancing of our senior notes, as well as legal fees related to the recovery of previously reserved cash rental income and non-Senior Housing - Managed operating expenses, partially offset by a contingency fee of $2.0 million earned during the period related to a legacy CCP investment and $0.9 million of interest income from a legacy CCP loan receivable that was fully repaid in June 2018, which represents the difference between the outstanding principal balance repaid and its discounted book value.

⁽²⁾  Merger and acquisition costs primarily relate to the CCP merger.

See reporting definitions. 2

SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

EBITDA, Adjusted EBITDA, Annualized Adjusted EBITDA, Pro Forma Annualized Adjusted EBITDA,

and Pro Forma Annualized Adjusted EBITDA, As Adjusted

(in thousands) 

	Trailing Twelve Months Ended			Year Ended
	September 30, 2018			December 31, 2017
Net income attributable to Sabra Health Care REIT, Inc.	$	402,420		$	158,383
Interest	142,102			88,440
Income tax expense	2,336			651
Depreciation and amortization	194,893			113,882
Sabra’s share of unconsolidated joint venture:
Interest, depreciation and amortization and income tax expense	30,471			—
EBITDA	$	772,222		$	361,356
Stock-based compensation expense	6,305			7,017
Merger and acquisition costs	1,098			30,255
CCP transition costs	1,928			5,005
Provision for loan losses and other reserves	16,838			6,367
Impairment of real estate	2,739			1,326
Loss on extinguishment of debt	553			553
Other income	(4,150		)	(2,876		)
Net gain on sales of real estate	(189,860		)	(52,029		)
Adjusted EBITDA(1)	$	607,673		$	356,974
Annualizing adjustments (2)	267			245,348
Annualized Adjusted EBITDA(3)	$	607,940		$	602,322
Pro Forma adjustments for:
Acquisitions and dispositions (4)	—			40,011
Genesis rent reductions	—			(19,000		)
Remaining CCP rent reductions	(825		)	(5,983		)
Facilities transitioned to new operator	—			(5,530		)
Unconsolidated joint venture interest expense	(16,837		)	—
Pro Forma Annualized Adjusted EBITDA(5)	$	590,278		$	611,820
Adjustment for:
Annualized unconsolidated joint venture interest expense (6)	16,837			18,993
Pro Forma Annualized Adjusted EBITDA, as adjusted	$	607,115		$	630,813

⁽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.

⁽⁴⁾  The year ended December 31, 2017 includes the Enlivant and North American Healthcare II acquisitions completed subsequent to December 31, 2017.

⁽⁵⁾ Pro Forma Annualized Adjusted EBITDA is calculated as Annualized Adjusted EBITDA adjusted to give effect to acquisitions, dispositions and other transactions completed after the period presented as though such acquisitions, dispositions and other transactions occurred at the beginning of the period.

⁽⁶⁾ Represents Sabra’s annualized pro rata share of unconsolidated joint venture interest expense.

See reporting definitions. 3

SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

Cash NOI by Facility Type

(in thousands) 

	Three Months Ended September 30, 2018
	Skilled Nursing/ Transitional Care			Senior Housing								Specialty Hospitals and Other
				Senior Housing - Leased			Senior Housing - Managed		Total Senior Housing						Interest and Other Income			Corporate			Total
Net income (loss)	$	57,540		$	15,391		$	348	$	15,739		$	9,455		$	3,932		$	(51,438	)	$	35,228
Adjustments:
Depreciation and amortization	32,609			8,739			2,719		11,458			4,180			—			221			48,468
Interest	2,105			462			—		462			—			—			34,738			37,305
General and administrative	—			—			—		—			—			—			8,022			8,022
Merger and acquisition costs	—			—			—		—			—			—			151			151
Provision for doubtful accounts and loan losses	—			—			—		—			—			—			8,910			8,910
Other income	—			—			—		—			—			—			(1,336		)	(1,336		)
Net gain on sales of real estate	(2		)	(12		)	—		(12		)	—			—			—			(14		)
Loss from unconsolidated JV	—			—			1,725		1,725			—			—			—			1,725
Income tax expense	—			—			—		—			—			—			732			732
Sabra’s share of unconsolidated JV Net Operating Income	—			—			8,747		8,747			—			—			—			8,747
Net Operating Income	$	92,252		$	24,580		$	13,539	$	38,119		$	13,635		$	3,932		$	—		$	147,938
Non-cash revenue adjustments	(719		)	(2,839		)	—		(2,839		)	(1,535		)	(547		)	—			(5,640		)
Cash Net Operating Income	$	91,533		$	21,741		$	13,539	$	35,280		$	12,100		$	3,385		$	—		$	142,298
Cash Net Operating Income not included in same store	122			(937		)	—		(937		)	—
Same store Cash Net Operating Income	$	91,655		$	20,804		$	13,539	$	34,343		$	12,100

See reporting definitions. 4

SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

Cash NOI by Facility Type

(in thousands) 

	Three Months Ended June 30, 2018
	Skilled Nursing/ Transitional Care						Senior Housing						Specialty Hospitals and Other
				Senior Housing - Leased			Senior Housing - Managed			Total Senior Housing						Interest and Other Income			Corporate			Total
Net income (loss)	$	196,515		$	33,787		$	235		$	34,022		$	9,460		$	4,553		$	(43,761	)	$	200,789
Adjustments:
Depreciation and amortization	31,369			8,438			2,649			11,087			4,150			—			222			46,828
Interest	2,063			469			—			469			—			—			34,225			36,757
General and administrative	—			—			—			—			—			—			9,271			9,271
Merger and acquisition costs	—			—			—			—			—			—			112			112
Recovery of doubtful accounts and loan losses	—			—			—			—			—			—			(674		)	(674		)
Impairment of real estate	881			—			—			—			—			—			—			881
Net gain on sales of real estate	(125,002		)	(17,901		)	—			(17,901		)	—			—			—			(142,903		)
Income from unconsolidated JV	—			—			2,347			2,347			—			—			—			2,347
Income tax expense	—			—			—			—			—			—			605			605
Sabra’s share of unconsolidated JV Net Operating Income	—			—			8,727			8,727			—			—			—			8,727
Net Operating Income	$	105,826		$	24,793		$	13,958		$	38,751		$	13,610		$	4,553		$	—		$	162,740
Non-cash revenue adjustments	(8,387		)	(2,875		)	—			(2,875		)	(1,610		)	(605		)	—			(13,477		)
Foreign exchange rate adjustment	—			—			(30		)	(30		)	—			—			—			(30		)
Cash Net Operating Income	$	97,439		$	21,918		$	13,928		$	35,846		$	12,000		$	3,948		$	—		$	149,233
Cash Net Operating Income not included in same store	(5,126		)	(1,026		)	—			(1,026		)	—
Same store Cash Net Operating Income	$	92,313		$	20,892		$	13,928		$	34,820		$	12,000

See reporting definitions. 5

SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

Annualized Cash NOI by Facility Type

(in thousands) 

	Nine Months Ended September 30, 2018
	Skilled Nursing/ Transitional Care			Senior Housing								Specialty Hospitals and Other
				Senior Housing - Leased			Senior Housing - Managed		Total Senior Housing						Interest and Other Income			Corporate			Total
Net income (loss)	$	326,364		$	63,403		$	3,425	$	66,828		$	28,360		$	12,823		$	(135,877	)	$	298,498
Adjustments:
Depreciation and amortization	95,951			25,870			8,341		34,211			12,474			—			665			143,301
Interest	6,155			1,406			—		1,406			—			—			102,319			109,880
General and administrative	—			—			—		—			—			—			25,160			25,160
Merger and acquisition costs	—			—			—		—			—			—			593			593
Provision for doubtful accounts and loan losses	—			—			—		—			—			—			9,449			9,449
Impairment of real estate	881			532			—		532			—			—			—			1,413
Other income	—			—			—		—			—			—			(4,156		)	(4,156		)
Net gain on sales of real estate	(124,532		)	(17,913		)	—		(17,913		)	—			—			—			(142,445		)
Loss from unconsolidated JV	—			—			3,626		3,626			—			—			—			3,626
Income tax expense	—			—			—		—			—			—			1,847			1,847
Sabra’s share of unconsolidated JV Net Operating Income	—			—			26,845		26,845			—			—			—			26,845
Net Operating Income	$	304,819		$	73,298		$	42,237	$	115,535		$	40,834		$	12,823		$	—		$	474,011
Non-cash revenue adjustments	(16,844		)	(8,466		)	—		(8,466		)	(4,902		)	(1,722		)	—			(31,934		)
Cash Net Operating Income	$	287,975		$	64,832		$	42,237	$	107,069		$	35,932		$	11,101		$	—		$	442,077
Annualizing adjustments	81,281			23,126			12,729		35,855			12,446			580			—			130,162
Annualized Cash Net Operating Income	$	369,256		$	87,958		$	54,966	$	142,924		$	48,378		$	11,681		$	—		$	572,239
Pro forma adjustments for:
Remaining CCP rent reductions	(825		)	—			—		—			—			—			—			(825		)
Pro forma Annualized Cash Net Operating Income (1)	$	368,431		$	87,958		$	54,966	$	142,924		$	48,378		$	11,681		$	—		$	571,414

⁽¹⁾  Pro forma Annualized Cash Net Operating Income reflects the Senior Care Centers portfolio at the historical annual lease rate of $58.5 million as the leases for these assets were terminated during the three months ended September 30, 2018 due to non-payment of rent. Senior Care Centers is currently operating the facilities on a month-to-month basis.

See reporting definitions. 6

SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

Annualized Cash NOI by Payor Type

(in thousands) 

	Nine Months Ended September 30, 2018
	Private Payors			Non-Private Payors			Interest and Other Income			Corporate			Total
Net income (loss)	$	123,030		$	298,522		$	12,823		$	(135,877	)	$	298,498
Adjustments:
Depreciation and amortization	56,452			86,184			—			665			143,301
Interest	2,729			4,832			—			102,319			109,880
General and administrative	—			—			—			25,160			25,160
Merger and acquisition costs	—			—			—			593			593
Provision for doubtful accounts and loan losses	—			—			—			9,449			9,449
Impairment of real estate	576			837			—			—			1,413
Other income	—			—			—			(4,156		)	(4,156		)
Net gain on sales of real estate	(27,970		)	(114,475		)	—			—			(142,445		)
Loss from unconsolidated JV	3,626			—			—			—			3,626
Income tax expense	—			—			—			1,847			1,847
Sabra’s share of unconsolidated JV Net Operating Income	26,845			—			—			—			26,845
Net Operating Income	$	185,288		$	275,900		$	12,823		$	—		$	474,011
Non-cash revenue adjustments	(15,191		)	(15,021		)	(1,722		)	—			(31,934		)
Cash Net Operating Income	$	170,097		$	260,879		$	11,101		$	—		$	442,077
Annualizing adjustments	55,184			74,398			580			—			130,162
Annualized Cash Net Operating Income	$	225,281		$	335,277		$	11,681		$	—		$	572,239
Pro-forma adjustments for:
Remaining CCP rent reductions	(164		)	(661		)	—			—			(825		)
Pro-forma Annualized Cash Net Operating Income (1)	$	225,117		$	334,616		$	11,681		$	—		$	571,414

⁽¹⁾  Pro forma Annualized Cash Net Operating Income reflects the Senior Care Centers portfolio at the historical annual lease rate of $58.5 million as the leases for these assets were terminated during the three months ended September 30, 2018 due to non-payment of rent. Senior Care Centers is currently operating the facilities on a month-to-month basis.

See reporting definitions. 7

SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

Annualized Cash NOI by Relationship

(in thousands) 

	Nine Months Ended September 30, 2018
	Senior Care Centers			Enlivant		Avamere Family of Companies			Signature Healthcare			Holiday AL Holdings LP			North American Healthcare			Signature Behavioral			Genesis Healthcare, Inc.			Cadia Healthcare			Healthmark Group		All Other Relationships			Corporate			Total
Net income (loss)	$	30,862		$	1,052	$	25,459		$	18,167		$	18,050		$	20,304		$	17,627		$	161,188		$	17,003		$	523	$	124,140		$	(135,877	)	$	298,498
Adjustments:
Depreciation and amortization	10,750			2,768		9,207			11,176			11,388			8,061			7,234			7,686			7,030			2,706		64,630			665			143,301
Interest	2,752			—		—			—			—			—			—			3,579			—			—		1,230			102,319			109,880
General and administrative	—			—		—			—			—			—			—			—			—			—		—			25,160			25,160
Merger and acquisition costs	—			—		—			—			—			—			—			—			—			—		—			593			593
Provision for doubtful accounts and loan losses	—			—		—			—			—			—			—			—			—			—		—			9,449			9,449
Impairment of real estate	—			—		—			—			—			—			—			—			—			—		1,413			—			1,413
Other income	—			—		—			—			—			—			—			—			—			—		—			(4,156		)	(4,156		)
Net gain on sales of real estate	—			—		—			(414		)	—			—			—			(140,727		)	—			—		(1,304		)	—			(142,445		)
Loss from unconsolidated JV	—			3,626		—			—			—			—			—			—			—			—		—			—			3,626
Income tax expense	—			—		—			—			—			—			—			—			—			—		—			1,847			1,847
Sabra’s share of unconsolidated JV Net Operating Income	—			26,845		—			—			—			—			—			—			—			—		—			—			26,845
Net Operating Income	$	44,364		$	34,291	$	34,666		$	28,929		$	29,438		$	28,365		$	24,861		$	31,726		$	24,033		$	3,229	$	190,109		$	—		$	474,011
Non-cash revenue adjustments	(2,471		)	—		(4,234		)	(1,325		)	(4,040		)	(3,238		)	(1,543		)	245			(3,990		)	7,061		(18,399		)	—			(31,934		)
Cash Net Operating Income	$	41,893		$	34,291	$	30,432		$	27,604		$	25,398		$	25,127		$	23,318		$	31,971		$	20,043		$	10,290	$	171,710		$	—		$	442,077
Annualizing adjustments	16,645			11,401		10,759			7,734			8,466			8,539			8,229			(1,280		)	8,977			5,821		44,871			—			130,162
Annualized Cash Net Operating Income	$	58,538		$	45,692	$	41,191		$	35,338		$	33,864		$	33,666		$	31,547		$	30,691		$	29,020		$	16,111	$	216,581		$	—		$	572,239
Pro forma adjustments for:
Remaining CCP rent reductions	—			—		—			—			—			—			—			—			—			—		(825		)	—			(825		)
Pro forma Annualized Cash Net Operating Income (1)	$	58,538		$	45,692	$	41,191		$	35,338		$	33,864		$	33,666		$	31,547		$	30,691		$	29,020		$	16,111	$	215,756		$	—		$	571,414

⁽¹⁾  Pro forma Annualized Cash Net Operating Income reflects the Senior Care Centers portfolio at the historical annual lease rate of $58.5 million as the leases for these assets were terminated during the three months ended September 30, 2018 due to non-payment of rent. Senior Care Centers is currently operating the facilities on a month-to-month basis.

See reporting definitions. 8

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 attributable to common stockholders 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 and non-cash revenues. Annualized Cash NOI excludes all other financial statement amounts included in net income.

Annualized Revenues. The annual straight-line 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 or additional rents.

Cash Net Operating Income (“Cash NOI”).   The Company believes that net income attributable to common stockholders 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. Cash NOI excludes all other financial statement amounts included in net income.

Funds From Operations Attributable to Common Stockholders (“FFO”) and Adjusted Funds from Operations Attributable to Common Stockholders (“AFFO”). The Company believes that net income attributable to common stockholders as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations attributable to common stockholders, 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 attributable to common stockholders, 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 attributable to common stockholders, as defined by GAAP. FFO is defined as net income attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus the Company’s share of depreciation and amortization related to our unconsolidated joint venture, and real estate impairment charges. AFFO is defined as FFO excluding merger and acquisition costs, stock-based compensation expense, straight-line rental income adjustments, amortization of above and below market lease intangibles, non-cash interest income adjustments, non-cash interest expense, change in fair value of contingent consideration, non-cash portion of loss on extinguishment of debt, provision for doubtful straight-line rental income, loan losses and other reserves 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 our share of non-cash adjustments related to our 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 attributable to common stockholders 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.

Net Operating Income (“NOI”).  The Company believes that net income attributable to common stockholders 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 REITs 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.

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