SUMMARIZED CONDENSED CONSOLIDATING INFORMATION

In connection with the offerings of the 2021 Notes and the 2023 Notes by the Issuers, the Company and certain 100% owned subsidiaries of the Company (the “Guarantors”) have, jointly and severally, fully and unconditionally guaranteed the 2021 Notes and the 2023 Notes, subject to release under certain customary circumstances as described below. In connection with the assumption of the 2026 Notes as a result of the CCP Merger (see Note 3, “CCP Merger and Recent Real Estate Acquisitions”), the Company has fully and unconditionally guaranteed the 2026 Notes, subject to release under certain circumstances as described below. 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.

A Guarantor will be automatically and unconditionally released from its obligations under the guarantees with respect to the 2021 Notes and the 2023 Notes in the event of:


•	Any sale of the subsidiary Guarantor or of all or substantially all of its assets;


•	A merger or consolidation of a subsidiary Guarantor with an issuer of the 2021 Notes or the 2023 Notes or another Guarantor, provided that the surviving entity remains a Guarantor;


•	A subsidiary Guarantor is declared “unrestricted” for covenant purposes under the indentures governing the 2021 Notes or the 2023 Notes;


•	The requirements for legal defeasance or covenant defeasance or to discharge the indentures governing the 2021 Notes or the 2023 Notes have been satisfied;


•	A liquidation or dissolution, to the extent permitted under the indentures governing the 2021 Notes or the 2023 Notes, of a subsidiary Guarantor; or


•	The release or discharge of the guaranty that resulted in the creation of the subsidiary guaranty, except a discharge or release by or as a result of payment under such guaranty.

The Company will be automatically and unconditionally released from its obligations under the guarantees with respect to the 2026 Notes in the event of:


•	A liquidation or dissolution, to the extent permitted under the indenture governing the 2026 Notes;


•	A merger or consolidation, provided that the surviving entity remains a Guarantor; or


•	The requirements for legal defeasance or covenant defeasance or to discharge the indenture governing the 2026 Notes have been satisfied.

Pursuant to Rule 3-10 of Regulation S-X, the following summarized condensed consolidating information is provided for the Company (the “Parent Company”), the Operating Partnership, Sabra Capital Corporation, the Guarantors, and the Company’s non-Guarantor subsidiaries with respect to the 2021 Notes and the 2023 Notes. This summarized financial information has been prepared from the books and records maintained by the Company, the Operating Partnership, Sabra Capital Corporation, 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 Operating Partnership, Sabra Capital Corporation, 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 Operating Partnership only, Sabra Capital Corporation only, the combined Guarantor subsidiaries and the combined non-Guarantor subsidiaries, are as follows:

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2018

(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	$	329		$	—	$	—	$	1,683,780	$	4,291,481	$	—		$	5,975,590
Loans receivable and other investments, net	(688		)	—		—		52,165		58,874		—			110,351
Investment in unconsolidated joint venture	—			—		—		—		344,341		—			344,341
Cash and cash equivalents	29,603			—		—		1,443		5,302		—			36,348
Restricted cash	—			—		—		92,027		11,141		—			103,168
Lease intangible assets, net	—			—		—		15,965		126,954		—			142,919
Accounts receivable, prepaid expenses and other assets, net	607			46,239		—		81,070		79,397		(9,691		)	197,622
Intercompany	2,089,878			2,645,837		—		—		—		(4,735,715		)	—
Investment in subsidiaries	1,266,833			1,611,594		—		15,038		—		(2,893,465		)	—
Total assets	$	3,386,562		$	4,303,670	$	—	$	1,941,488	$	4,917,490	$	(7,638,871	)	$	6,910,339

Liabilities
Secured debt, net	$	—		$	—	$	—	$	—	$	252,827	$	—		$	252,827
Revolving credit facility	—			619,000		—		—		—		—			619,000
Term loans, net	—			1,093,772		—		95,875		—		—			1,189,647
Senior unsecured notes, net	—			1,307,120		—		—		—		—			1,307,120
Accounts payable and accrued liabilities	23,661			16,945		—		3,758		52,212		(9,691		)	86,885
Lease intangible liabilities, net	—			—		—		—		87,602		—			87,602
Intercompany	—			—		—		542,824		4,192,891		(4,735,715		)	—
Total liabilities	23,661			3,036,837		—		642,457		4,585,532		(4,745,406		)	3,543,081

Total Sabra Health Care REIT, Inc. stockholders’ equity	3,362,901			1,266,833		—		1,299,031		327,601		(2,893,465		)	3,362,901
Noncontrolling interests	—			—		—		—		4,357		—			4,357
Total equity	3,362,901			1,266,833		—		1,299,031		331,958		(2,893,465		)	3,367,258
Total liabilities and equity	$	3,386,562		$	4,303,670	$	—	$	1,941,488	$	4,917,490	$	(7,638,871	)	$	6,910,339


⁽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, 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	$	324		$	—	$	—	$	1,756,933	$	4,237,175	$	—		$	5,994,432
Loans receivable and other investments, net	(97		)	—		—		55,297		59,190		—			114,390
Cash and cash equivalents	511,670			—		—		449		6,513		—			518,632
Restricted cash	—			—		—		36,910		31,907		—			68,817
Lease intangible assets, net	—			—		—		17,577		149,542		—			167,119
Accounts receivable, prepaid expenses and other assets, net	3,499			36,073		—		80,739		53,765		(5,189		)	168,887
Intercompany	2,043,402			2,721,979		—		—		—		(4,765,381		)	—
Investment in subsidiaries	890,462			1,198,305		—		14,661		—		(2,103,428		)	—
Total assets	$	3,449,260		$	3,956,357	$	—	$	1,962,566	$	4,538,092	$	(6,873,998	)	$	7,032,277

Liabilities
Secured debt, net	$	—		$	—	$	—	$	—	$	256,430	$	—		$	256,430
Revolving credit facility	—			641,000		—		—		—		—			641,000
Term loans, net	—			1,092,397		—		98,377		—		—			1,190,774
Senior unsecured notes, net	—			1,306,286		—		—		—		—			1,306,286
Accounts payable and accrued liabilities	16,453			26,212		—		3,560		61,487		(5,189		)	102,523
Lease intangible liabilities, net	—			—		—		—		98,015		—			98,015
Intercompany	—			—		—		785,120		3,980,261		(4,765,381		)	—
Total liabilities	16,453			3,065,895		—		887,057		4,396,193		(4,770,570		)	3,595,028

Total Sabra Health Care REIT, Inc. stockholders’ equity	3,432,807			890,462		—		1,075,509		137,457		(2,103,428		)	3,432,807
Noncontrolling interests	—			—		—		—		4,442		—			4,442
Total equity	3,432,807			890,462		—		1,075,509		141,899		(2,103,428		)	3,437,249
Total liabilities and equity	$	3,449,260		$	3,956,357	$	—	$	1,962,566	$	4,538,092	$	(6,873,998	)	$	7,032,277


⁽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, 2018

(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	$	—		$	—		$	—	$	40,570		$	94,200		$	(4,303	)	$	130,467
Interest and other income	33			95			—		1,665			2,234			(95		)	3,932
Resident fees and services	—			—			—		—			17,403			—			17,403
Total revenues	33			95			—		42,235			113,837			(4,398		)	151,802
Expenses:
Depreciation and amortization	221			—			—		14,615			33,632			—			48,468
Interest	—			33,892			—		846			2,662			(95		)	37,305
Operating expenses	—			—			—		—			16,914			(4,303		)	12,611
General and administrative	6,933			24			—		614			451			—			8,022
Merger and acquisition costs	151			—			—		—			—			—			151
(Recovery of) provision for doubtful accounts and loan losses	(1,699		)	—			—		4,315			6,294			—			8,910
Total expenses	5,606			33,916			—		20,390			59,953			(4,398		)	115,467
Other (expense) income:
Other (expense) income	—			(11		)	—		(70		)	1,417			—			1,336
Net (loss) gain on sales of real estate	—			—			—		(1,158		)	1,172			—			14
Total other (expense) income	—			(11		)	—		(1,228		)	2,589			—			1,350
Income in subsidiary	41,283			75,115			—		1,924			—			(118,322		)	—
Income before loss from unconsolidated joint venture and income tax expense	35,710			41,283			—		22,541			56,473			(118,322		)	37,685
Loss from unconsolidated joint venture	—			—			—		—			(1,725		)	—			(1,725		)
Income tax expense	(492		)	—			—		(200		)	(40		)	—			(732		)
Net income	35,218			41,283			—		22,341			54,708			(118,322		)	35,228
Net income attributable to noncontrolling interests	—			—			—		—			(10		)	—			(10		)
Net income attributable to common stockholders	$	35,218		$	41,283		$	—	$	22,341		$	54,698		$	(118,322	)	$	35,218

Net income attributable to common stockholders, per:
Basic common share																		$	0.20
Diluted common share																		$	0.20
Weighted-average number of common shares outstanding, basic																		178,317,769
Weighted-average number of common shares outstanding, diluted																		178,941,213


⁽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, 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) benefit	15,407			49,145			—		35,345			36,590			(121,613		)	14,874
Income tax (expense) benefit	(265		)	—			—		482			(22		)	—			195
Net income	15,142			49,145			—		35,827			36,568			(121,613		)	15,069
Net loss 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 income 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 Nine Months Ended September 30, 2018

(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	$	—		$	—		$	—	$	130,594		$	301,213		$	(12,856	)	$	418,951
Interest and other income	83			303			—		4,130			8,610			(303		)	12,823
Resident fees and services	—			—			—		—			52,426			—			52,426
Total revenues	83			303			—		134,724			362,249			(13,159		)	484,200
Expenses:
Depreciation and amortization	665			—			—		43,691			98,945			—			143,301
Interest	—			99,873			—		2,446			7,864			(303		)	109,880
Operating expenses	—			—			—		—			49,890			(12,856		)	37,034
General and administrative	20,764			52			—		1,424			2,920			—			25,160
Merger and acquisition costs	599			—			—		—			(6		)	—			593
Provision for doubtful accounts and loan losses	793			—			—		2,359			6,297			—			9,449
Impairment of real estate	—			—			—		1,413			—			—			1,413
Total expenses	22,821			99,925			—		51,333			165,910			(13,159		)	326,830
Other income:
Other income	1,977			222			—		308			1,649			—			4,156
Net gain on sales of real estate	—			—			—		140,704			1,741			—			142,445
Total other income	1,977			222			—		141,012			3,390			—			146,601
Income in subsidiary	320,082			419,483			—		5,649			—			(745,214		)	—
Income before loss from unconsolidated joint venture and income tax expense	299,321			320,083			—		230,052			199,729			(745,214		)	303,971
Loss from unconsolidated joint venture	—			—			—		—			(3,626		)	—			(3,626		)
Income tax expense	(845		)	(1		)	—		(742		)	(259		)	—			(1,847		)
Net income	298,476			320,082			—		229,310			195,844			(745,214		)	298,498
Net income attributable to noncontrolling interests	—			—			—		—			(22		)	—			(22		)
Net income attributable to Sabra Health Care REIT, Inc.	298,476			320,082			—		229,310			195,822			(745,214		)	298,476
Preferred stock dividends	(9,768		)	—			—		—			—			—			(9,768		)
Net income attributable to common stockholders	$	288,708		$	320,082		$	—	$	229,310		$	195,822		$	(745,214	)	$	288,708
Net income attributable to common stockholders, per:
Basic common share																		$	1.62
Diluted common share																		$	1.62
Weighted-average number of common shares outstanding, basic																		178,309,127
Weighted-average number of common shares outstanding, diluted																		178,729,853


⁽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:
Loss on extinguishment of debt	—			(422		)	—		(131		)	—			—			(553		)
Other income (expense)	2,634			707			—		(220		)	—			—			3,121
Net gain (loss) on sales of real estate	—			—			—		4,640			(26		)	—			4,614
Total other income	2,634			285			—		4,289			(26		)	—			7,182
Income in subsidiary	102,474			150,879			—		5,372			—			(258,725		)	—
Income before income tax (expense) benefit	54,782			102,475			—		115,362			40,710			(258,772		)	54,557
Income tax (expense) benefit	(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 income 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 COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2018

(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	$	35,218	$	41,283		$	—	$	22,341	$	54,708		$	(118,322	)	$	35,228
Other comprehensive income (loss):
Unrealized gain (loss), net of tax:
Foreign currency translation (loss) gain	—		(857		)	—		610		182			—			(65		)
Unrealized gain on cash flow hedges	—		2,000			—		10		—			—			2,010
Total other comprehensive income	—		1,143			—		620		182			—			1,945
Comprehensive income	35,218		42,426			—		22,961		54,890			(118,322		)	37,173
Comprehensive income attributable to noncontrolling interest	—		—			—		—		(10		)	—			(10		)
Comprehensive income attributable to Sabra Health Care REIT, Inc.	$	35,218	$	42,426		$	—	$	22,961	$	54,880		$	(118,322	)	$	37,163


⁽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 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 (loss) gain	—		(1,352		)	—		1,335			429		—			412
Unrealized gain (loss) on cash flow hedges	—		4,964			—		(307		)	—		—			4,657
Total other comprehensive income	—		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.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2018

(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	$	298,476	$	320,082	$	—	$	229,310		$	195,844		$	(745,214	)	$	298,498
Other comprehensive income (loss):
Unrealized gain (loss), net of tax:
Foreign currency translation gain (loss)	—		1,048		—		(926		)	(300		)	—			(178		)
Unrealized gain on cash flow hedges	—		15,238		—		8			—			—			15,246
Total other comprehensive income (loss)	—		16,286		—		(918		)	(300		)	—			15,068
Comprehensive income	298,476		336,368		—		228,392			195,544			(745,214		)	313,566
Comprehensive income attributable to noncontrolling interest	—		—		—		—			(22		)	—			(22		)
Comprehensive income attributable to Sabra Health Care REIT, Inc.	$	298,476	$	336,368	$	—	$	228,392		$	195,522		$	(745,214	)	$	313,544


⁽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 (loss) gain	—		(2,718		)	—		2,466			804		—			552
Unrealized gain (loss) on cash flow hedges	—		5,977			—		(495		)	—		—			5,482
Total other comprehensive income	—		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.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2018

(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	$	271,511		$	—		$	—	$	1,296		$	10,217		$	—		$	283,024
Cash flows from investing activities:
Acquisition of real estate	—			—			—		(54,715		)	(184,286		)	—			(239,001		)
Origination and fundings of loans receivable	—			—			—		(2,650		)	(38,798		)	—			(41,448		)
Origination and fundings of preferred equity investments	—			—			—		(5,285		)	—			—			(5,285		)
Additions to real estate	(40		)	—			—		(5,763		)	(15,892		)	—			(21,695		)
Repayments of loans receivable	—			—			—		6,534			41,748			—			48,282
Repayments of preferred equity investments	—			—			—		6,491			—			—			6,491
Investment in unconsolidated JV	—			—			—		—			(354,461		)	—			(354,461		)
Net proceeds from the sales of real estate	—			—			—		233,703			57,161			—			290,864
Distribution from subsidiaries	5,421			5,421			—		—			—			(10,842		)	—
Intercompany financing	(369,732		)	(347,720		)	—		—			—			717,452			—
Net cash (used in) provided by investing activities	(364,351		)	(342,299		)	—		178,315			(494,528		)	706,610			(316,253		)
Cash flows from financing activities:
Net borrowings from revolving credit facility	—			(22,000		)	—		—			—			—			(22,000		)
Principal payments on secured debt	—			—			—		—			(3,202		)	—			(3,202		)
Payments of deferred financing costs	—			(12		)	—		—			—			—			(12		)
Distributions to noncontrolling interest	—			—			—		—			(107		)	—			(107		)
Preferred stock redemption	(143,750		)	—			—		—			—			—			(143,750		)
Issuance of common stock, net	(499		)	—			—		—			—			—			(499		)
Dividends paid on common and preferred stock	(244,978		)	—			—		—			—			—			(244,978		)
Distribution to parent	—			(5,421		)	—		—			(5,421		)	10,842			—
Intercompany financing	—			369,732			—		(123,418		)	471,138			(717,452		)	—
Net cash (used in) provided by financing activities	(389,227		)	342,299			—		(123,418		)	462,408			(706,610		)	(414,548		)
Net (decrease) increase in cash, cash equivalents and restricted cash	(482,067		)	—			—		56,193			(21,903		)	—			(447,777		)
Effect of foreign currency translation on cash, cash equivalents and restricted cash	—			—			—		(82		)	(74		)	—			(156		)
Cash, cash equivalents and restricted cash, beginning of period	511,670			—			—		37,359			38,420			—			587,449
Cash, cash equivalents and restricted cash, end of period	$	29,603		$	—		$	—	$	93,470		$	16,443		$	—		$	139,516


⁽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, 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		$	—		$	—	$	6,103		$	6,588		$	—		$	53,258
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		)
Repayments of loans receivable	—			—			—		2,221			6,489			—			8,710
Repayments of preferred equity investments	—			—			—		3,239			—			—			3,239
Net proceeds from the sale 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 (used in) provided by 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 in cash, cash equivalents and restricted cash	7,046			—			—		237			656			—			7,939
Effect of foreign currency translation on cash, cash equivalents and restricted cash	—			—			—		83			675			—			758
Cash, cash equivalents and restricted cash, beginning of period	18,168			—			—		2,732			13,765			—			34,665
Cash, cash equivalents and restricted cash, end of period	$	25,214		$	—		$	—	$	3,052		$	15,096		$	—		$	43,362


⁽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.