8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 1, 2012

SABRA HEALTH CARE REIT, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-34950	27-2560479
(State of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

18500 Von Karman, Suite 550 Irvine, CA	92612
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number including area code: (888) 393-8248

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On August 1, 2012, Sabra Health Care REIT, Inc. ("Sabra") issued a press release reporting its results of operations for the three month period ended June 30, 2012. The press release referred to a supplemental information package that is available on Sabra's website, free of charge, at www.sabrahealth.com. The text of the press release and the supplemental information package are furnished herewith as Exhibits 99.1 and 99.2, respectively, and are specifically incorporated by reference herein.

The information in this Form 8-K and the related information in the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of Sabra under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits.
99.1	Press Release of Sabra Health Care REIT, Inc., dated August 1, 2012.
99.2	Sabra Health Care REIT, Inc. Supplemental Information Package, dated June 30, 2012.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SABRA HEALTH CARE REIT, INC.
/S/    HAROLD W. ANDREWS, JR.
Name:	Harold W. Andrews, Jr.
Title:	Executive Vice President, Chief Financial Officer and Secretary

Dated: August 1, 2012

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of Sabra Health Care REIT, Inc., dated August 1, 2012.
99.2	Sabra Health Care REIT, Inc. Supplemental Information Package, dated June 30, 2012.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

SABRA REPORTS SECOND QUARTER 2012 RESULTS AND DECLARES QUARTERLY DIVIDEND; REVENUES, NET INCOME, FFO AND AFFO INCREASED 34%, 184%, 61% AND 52%, RESPECTIVELY, OVER THE SECOND QUARTER 2011.

IRVINE, CA, August 1, 2012 — Sabra Health Care REIT, Inc. (“Sabra,” the “Company” or “we”) (NASDAQ:SBRA) today announced results of operations for the second quarter of 2012.

RECENT HIGHLIGHTS

• For the second quarter of 2012, we posted FFO, AFFO and net income per diluted share of $0.36, $0.42 and $0.16, respectively, up from $0.33, $0.40 and $0.08, respectively, for the second quarter of 2011.

• During the second quarter, revenues increased 34% over the same period in 2011 from $18.8 million to $25.1 million.

• During the second quarter, we purchased four skilled nursing facilities in two separate transactions for $25.7 million and originated a $11.0 million first mortgage with an option to purchase the skilled nursing facility securing the loan.

• During the second quarter, we refinanced four existing mortgage notes totaling $20.9 million and reduced the weighted average interest rate from 5.75% to 2.49%. We also amended our loan agreement on $58.6 million of variable rate mortgage debt and reduced the interest rate by 50 basis points. Subsequent to June 30, 2012, we refinanced an existing $13.5 million mortgage note and reduced the interest rate from 5.90% to 2.49%. These refinancings will result in annual interest savings of approximately $1.4 million.

• On July 26, 2012, we issued a $100 million aggregate principal amount add-on to our existing 8.125% senior notes due 2018 at a price of 106.0% fornet proceeds of $103.8 million (after underwriting costs but before other offering expenses) at a yield-to-maturity of 6.92%.

• On August 1, 2012, our board of directors declared a quarterly cash dividend of $0.33 per share of common stock. The dividend will be paid on August 31, 2012 to stockholders of record as of the close of business on August 15, 2012.

Commenting on the second quarter results, Rick Matros, CEO and Chairman, said, "We had a very productive second quarter as well as an active start to the third quarter considering our acquisition activity, refinancing, and the add on to our senior notes. Operationally, our tenants had a nice quarter with strong improvement in rent coverage and an improvement in occupancy in our skilled nursing/post-acute portfolio, despite this quarter being soft throughout the industry. As we look toward the remainder of the year, we fully expect to achieve our guidance on acquisition volume. Additionally, for the first time we expect our acquisition activity to demonstrate our commitment to expand Sabra's portfolio into senior housing."

Performance for the Second Quarter of 2012

During the second quarter of 2012, we recognized FFO of $13.5 million ($0.36 per diluted share) and AFFO of $15.7 million ($0.42 per diluted share), compared to FFO of $8.4 million ($0.33 per diluted share) and AFFO of $10.3 million ($0.40 per diluted share) for the same period in 2011. AFFO represents FFO excluding non-cash revenues (including straight-line rental income adjustments, amortization of acquired above/below market lease intangibles and non-cash interest income), non-cash expenses (including stock-based compensation expense and amortization of deferred financing costs) and acquisition pursuit costs, which aggregated to a net adjustment of $2.2 million ($0.06 per diluted share) for the period. During the second quarter of 2012, net income was $5.9 million ($0.16 per diluted share), compared to net income of $2.1 million ($0.08 per diluted share) for the same period in 2011. We recognized revenues of $25.1 million during the second quarter of 2012 compared to $18.8 million during the second quarter of 2011. In addition, during the second quarter of 2012, we generated $7.6 million of cash flow from operations up from $5.5 million during the same period of 2011. Finally, Adjusted Facility EBITDAR Coverage and Adjusted Tenant EBITDAR Coverage were 1.34x and 1.55x, respectively, for the three months ended June 30, 2012 after eliminating the impact of one facility identified as a strategic disposition candidate.

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LIQUIDITY

As of June 30, 2012, we had approximately $160.6 million in liquidity, consisting of unrestricted cash and cash equivalents of $3.1 million and available borrowings of $157.5 million under our secured revolving credit facility. A portion of the proceeds from our July 26, 2012 offering of 8.125% senior notes due 2018 was used to repay the $42.5 million outstanding under our secured revolving credit facility as of June 30, 2012.

CONFERENCE CALL AND COMPANY INFORMATION

A conference call to discuss the 2012 second quarter results will be held on Thursday, August 2, 2012 at 10:00am Pacific Time. The dial in number for the conference call is (888) 490-2767 and the participant code is “Sabra.” A replay of the call will also be available immediately following the call and for 30 days, ending on September 1, 2012, by dialing (888) 203-1112, and using passcode 2704460. The Company’s supplemental information package for the second quarter will also be available on the Company’s website in the “Investor Relations” section.

ABOUT SABRA

Sabra Health Care REIT, Inc. (NASDAQ: SBRA), a Maryland corporation, operates as a self-administered, self-managed real estate investment trust (a “REIT”) that, through its subsidiaries, owns and invests in real estate serving the healthcare industry. Sabra leases properties to tenants and operators throughout the United States. As of June 30, 2012, Sabra’s investment portfolio included 103 properties (consisting of (i) 93 skilled nursing/post-acute facilities, (ii) nine senior housing facilities, and (iii) one acute care hospital), one mezzanine loan investment and one mortgage loan investment. As of June 30, 2012, Sabra’s properties were located in 25 states and included 11,392 licensed beds.

FORWARD-LOOKING STATEMENTS SAFE HARBOR

This release contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified, without limitation, by the use of “expects,” “believes,” “intends,” “should” or comparable terms or the negative thereof. Forward-looking statements in this release include all statements regarding our expectations concerning our acquisition pipeline.

Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: our dependence on Sun Healthcare Group, Inc. ("Sun") until we are able to further diversify our portfolio; our dependence on the operating success of our tenants; changes in general economic conditions and volatility in financial and credit markets; the dependence of our tenants on reimbursement from governmental and other third-party payors; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to make acquisitions, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; our ability to raise capital through equity financings; the relatively illiquid nature of real estate investments; competitive conditions in our industry; the loss of key management personnel or other employees; the impact of litigation and rising insurance costs on the business of our tenants; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; our ability to qualify and maintain our status as a REIT; compliance with REIT requirements and certain tax matters related to status as a REIT; and other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission (the “SEC”), especially the “Risk Factors” sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. We assume no, and hereby disclaim any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.

TENANT INFORMATION

This release includes information regarding Sun. Sun is subject to the reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Sun's filings with the SEC can be found at www.sec.gov. This release also includes information regarding each of our other tenants that lease properties from us. The information related to Sun and our other tenants that is provided in this release has been provided by the tenants or, in the case of Sun, derived from Sun's public filings or provided by Sun. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only.

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NOTE REGARDING NON-GAAP FINANCIAL MEASURES

This release includes the following financial measures defined as non-GAAP financial measures by the SEC: EBITDA, funds from operations (“FFO”), Adjusted FFO (“AFFO”), Normalized AFFO, FFO per diluted share, AFFO per diluted share and normalized AFFO per diluted share. These measures may be different than non-GAAP financial measures used by other companies, and the presentation of these measures is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with U.S. generally accepted accounting principles. An explanation of these non-GAAP financial measures is included under “Definitions of Non-GAAP Financial Measures” in this release, and reconciliations of these non-GAAP financial measures to the GAAP financial measures we consider most comparable are included under “Reconciliations of Net Income to EBITDA, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO” in this release.

CONTACT

Investor & Media Inquiries: (949) 679-0410

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SABRA HEALTH CARE REIT, INC.

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Revenues	$	25,117		$	18,805		$	48,844	$	36,407
EBITDA	$	21,628		$	15,882		$	41,034	$	30,815
Net income	$	5,923		$	2,087		$	10,328	$	3,335
FFO	$	13,480		$	8,377		$	25,188	$	15,712
AFFO	$	15,669		$	10,308		$	29,668	$	19,368
Normalized AFFO	$	15,669		$	10,308		$	29,668	$	19,678
Per share data:
Diluted EPS	$	0.16		$	0.08		$	0.28	$	0.13
Diluted FFO	$	0.36		$	0.33		$	0.68	$	0.62
Diluted AFFO	$	0.42		$	0.40		$	0.79	$	0.76
Diluted Normalized AFFO	$	0.42		$	0.40		$	0.79	$	0.77
Weighted-average number of common shares outstanding, diluted:
EPS & FFO	37,191,687			25,226,179			37,119,005		25,210,575
AFFO & Normalized AFFO	37,538,337			25,480,729			37,472,271		25,474,693
Net cash flow from operations	$	7,623		$	5,470		$	24,087	$	17,928
	June 30, 2012			December 31, 2011
Real Estate Portfolio
Total Equity Investments (#)	103			97
Total Equity Investments, gross ($)	$	821,990		$	767,054
Total Licensed Beds/Units	11,392			10,877
Weighted Average Remaining Lease Term (in months)	142			144
Total Debt Investments (#)	2			—
Total Debt Investments, gross ($) (2)	$	21,202		$	—
	Three Months Ended June 30, 2012			Twelve Months Ended June 30, 2012
Adjusted Facility EBITDARM Coverage (1)	1.80x			1.81x
Adjusted Facility EBITDAR Coverage (1)	1.34x			1.34x
Adjusted Tenant EBITDAR Coverage (1)	1.55x			1.55x
	June 30, 2012			December 31, 2011
Debt (3)
Principal
Fixed Rate Debt	$	324,310		$	324,239
Variable Rate Debt	101,062			59,159
Total Debt	$	425,372		$	383,398
Weighted Average Effective Rate
Fixed Rate Debt	7.33		%	7.55		%
Variable Rate Debt	4.36		%	5.50		%
Total Debt	6.62		%	7.24		%
% of Total
Fixed Rate Debt	76.2		%	84.6		%
Variable Rate Debt	23.8		%	15.4		%
Total Debt	100.0		%	100.0		%
Availability Under Credit Facility:	$	157,500		$	100,000
Available Liquidity (Unrestricted Cash and Availability Under Credit Facility)	$	160,610		$	142,250

⁽¹⁾ Adjusted Facility EBITDAR, Adjusted Facility EBITDARM and Adjusted Tenant EBITDAR and related coverages for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities. All facility financial performance data are presented one month in arrears. Adjusted coverages exclude the impact of strategic disposition candidates. Including the impact of one facility identified as a strategic disposition candidate, the three months ended June 30, 2012 Facility EBITDARM, Facility EBITDAR and Tenant EBITDAR are 1.76x, 1.30x and 1.53x, respectively; and for the twelve months ended June 30, 2012, Facility EBITDARM, Facility EBITDAR and Tenant EBITDAR are 1.78x, 1.31x and 1.53x, respectively.

⁽²⁾ Total Debt Investments, gross consists of principal of $21.0 million plus capitalized origination fees of $0.2 million.

⁽³⁾ Subsequent to June 30, 2012, we issued an additional $100 million aggregate principal amount of senior notes, with gross proceeds of $106 million and net proceeds of $103.8 million after underwriting costs but before other offering expenses. A portion of the proceeds was used to repay the $42.5 million outstanding on our secured revolving credit facility. After taking into account the July 2012 issuance of senior notes and the repayment of the amount outstanding on our secured revolving credit facility, total debt and available liquidity on a proforma basis was $488.9 million and $264.4 million, respectively.

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SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Revenues:
Rental income	$	24,820	$	18,628	$	48,483	$	36,190
Interest income	297		177		361		217
Total revenues	25,117		18,805		48,844		36,407
Expenses:
Depreciation and amortization	7,557		6,290		14,860		12,377
Interest	8,148		7,505		15,846		15,103
General and administrative	3,489		2,923		7,810		5,592
Total expenses	19,194		16,718		38,516		33,072
Net income	$	5,923	$	2,087	$	10,328	$	3,335
Net income per common share, basic	$	0.16	$	0.08	$	0.28	$	0.13
Net income per common share, diluted	$	0.16	$	0.08	$	0.28	$	0.13
Weighted-average number of common shares outstanding, basic	37,147,942		25,154,284		37,092,683		25,140,781
Weighted-average number of common shares outstanding, diluted	37,191,687		25,226,179		37,119,005		25,210,575

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SABRA HEALTH CARE REIT, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

	June 30, 2012			December 31, 2011
Assets
Real estate investments, net of accumulated depreciation of $123,651 and $108,916 as of June 30, 2012 and December 31, 2011, respectively	$	698,578		$	658,377
Loans receivable, net	21,193			—
Cash and cash equivalents	3,110			42,250
Restricted cash	7,076			6,093
Deferred tax assets	25,540			25,540
Prepaid expenses, deferred financing costs and other assets	23,021			17,390
Total assets	$	778,518		$	749,650
Liabilities and stockholders’ equity
Mortgage notes payable	$	157,872		$	158,398
Secured revolving credit facility	42,500			—
Senior unsecured notes payable	225,000			225,000
Accounts payable and accrued liabilities	11,181			14,139
Tax liability	25,540			25,540
Total liabilities	462,093			423,077
Stockholders’ equity
Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2012 and December 31, 2011	—			—
Common stock, $.01 par value; 125,000,000 shares authorized, 37,051,242 and 36,891,712 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively	371			369
Additional paid-in capital	349,272			344,995
Cumulative distributions in excess of net income	(33,218		)	(18,791		)
Total stockholders’ equity	316,425			326,573
Total liabilities and stockholders’ equity	$	778,518		$	749,650

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SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities:
Net income	$	10,328		$	3,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,860			12,377
Non-cash interest income adjustments	9			—
Amortization of deferred financing costs	1,447			995
Stock-based compensation expense	3,842			2,478
Amortization of premium on notes payable	(8		)	(8		)
Straight-line rental income adjustments	(1,690		)	(128		)
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(779		)	219
Accounts payable and accrued liabilities	(1,914		)	485
Restricted cash	(2,008		)	(1,825		)
Net cash provided by operating activities	24,087			17,928
Cash flows from investing activities:
Acquisitions of real estate	(55,550		)	(74,000		)
Origination of loans receivable	(21,176		)	—
Acquisition of note receivable	—			(5,348		)
Additions to real estate	(730		)	(86		)
Net cash used in investing activities	(77,456		)	(79,434		)
Cash flows from financing activities:
Proceeds from secured revolving credit facility	42,500			—
Proceeds from mortgage notes payables	21,947			—
Principal payments on mortgage notes payable	(22,464		)	(1,499		)
Payments of deferred financing costs	(3,435		)	(270		)
Issuance of common stock	144			547
Dividends paid	(24,463		)	(8,051		)
Net cash provided by (used in) financing activities	14,229			(9,273		)
Net decrease in cash and cash equivalents	(39,140		)	(70,779		)
Cash and cash equivalents, beginning of period	42,250			74,233
Cash and cash equivalents, end of period	$	3,110		$	3,454
Supplemental disclosure of cash flow information:
Interest paid	$	14,677		$	14,476

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SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NET INCOME TO EBITDA, FUNDS FROM OPERATIONS (FFO),

ADJUSTED FUNDS FROM OPERATIONS (AFFO) AND NORMALIZED AFFO

(dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2.012			2.011
Net income	$	5,923		$	2,087		$	10,328		$	3,335
Interest expense	8,148			7,505			15,846			15,103
Depreciation and amortization	7,557			6,290			14,860			12,377
EBITDA	$	21,628		$	15,882		$	41,034		$	30,815
Net income	$	5,923		$	2,087		$	10,328		$	3,335
Add:
Depreciation of real estate assets	7,557			6,290			14,860			12,377
Funds from Operations (FFO)	$	13,480		$	8,377		$	25,188		$	15,712
Acquisition pursuit costs	381			224			872			311
Stock-based compensation expense	1,639			1,335			3,842			2,478
Straight-line rental income adjustments	(721		)	(128		)	(1,690		)	(128		)
Amortization of deferred financing costs	881			500			1,447			995
Non-cash interest income adjustments	9			—			9			—
Adjusted Funds from Operations (AFFO)	$	15,669		$	10,308		$	29,668		$	19,368
Start-up costs	—			—						310
Normalized AFFO	$	15,669		$	10,308		$	29,668		$	19,678
Net income per diluted common share	$	0.16		$	0.08		$	0.28		$	0.13
FFO per diluted common share	$	0.36		$	0.33		$	0.68		$	0.62
AFFO per diluted common share	$	0.42		$	0.40		$	0.79		$	0.76
Normalized AFFO per diluted common share	$	0.42		$	0.40		$	0.79		$	0.77
Weighted average number of common shares outstanding, diluted:
Net income and FFO	37,191,687			25,226,179			37,119,005			25,210,575
AFFO and Normalized AFFO	37,538,337			25,480,729			37,472,271			25,474,693

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DEFINITIONS OF NON-GAAP FINANCIAL MEASURES

This press release includes the non-GAAP financial measures of EBITDA, FFO, AFFO, normalized AFFO, FFO per diluted share, AFFO per diluted share and normalized AFFO per diluted share, which are reconciled to net income, which we believe is the most comparable GAAP measure. We believe that the use of FFO, AFFO and Normalized AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful.

EBITDA. The real estate industry uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, as a measure of both operating performance and liquidity. The Company uses EBITDA to measure both its operating performance and liquidity. By excluding interest expense, EBITDA allows investors to measure the Company’s operating performance independent of its capital structure and indebtedness and, therefore, allows for a more meaningful comparison of its operating performance between quarters as well as annual periods and to compare its operating performance to that of other companies, both in the real estate industry and in other industries. As a liquidity measure, the Company believes that EBITDA helps investors analyze the Company’s ability to meet its interest payments on outstanding debt. The Company believes investors should consider EBITDA in conjunction with net income (the primary measure of the Company’s performance) and the other required GAAP measures of its performance and liquidity, to improve their understanding of the Company’s operating results and liquidity, and to make more meaningful comparisons of its performance between periods and against other companies. EBITDA has limitations as an analytical tool and should be used in conjunction with the Company’s required GAAP presentations. EBITDA does not reflect the Company’s historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, the Company’s computation of EBITDA may not be comparable to similar measures reported by other companies.

Facility EBITDAR(M). Earnings before interest, taxes, depreciation, amortization, rent (“EBITDAR”) and management fees ("EBITDARM") for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses Facility EBITDAR(M) in determining Facility EBITDAR(M) Coverages. Facility EBITDAR(M) has limitations as an analytical tool. Facility EBITDAR(M) does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDAR(M) does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators. However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management. The Company utilizes Facility EBITDAR(M) as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company and EBITDARM in particular to evaluate the core operations of the properties by eliminating management fees, which vary based on operator/tenant and its operating structure. All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. All facility financial performance data are presented one month in arrears. The Company includes Facility EBITDAR(M) for a property if it was operated at any time during the period presented subject to a lease with the Company. Facility EBITDAR(M) for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities.

Facility EBITDAR(M) Coverage. Facility EBITDAR(M) for the trailing 3 and 12 month periods prior to and including the period presented divided by the same period cash rent. Facility EBITDAR(M) coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR(M). All facility financial performance data were derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. All facility financial performance data are presented one month in arrears.

Funds From Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that Funds From Operations, 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, or AFFO, (and related per share amounts) are important non-GAAP supplemental measures of operating performance for a real estate investment trust. 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, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or

9

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES

losses from real estate dispositions, plus real estate depreciation and amortization. AFFO is defined as FFO excluding non-cash revenues (including straight-line rental income adjustments, amortization of acquired above/below market lease intangibles and non-cash interest income adjustments), non-cash expenses (including stock-based compensation expense and amortization of deferred financing costs) and acquisition pursuit costs. 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 operating results of real estate investment trusts among investors and makes comparisons of operating results among such companies more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, and, for AFFO, by excluding non-cash revenues (including straight-line rental income adjustments, amortization of acquired above/below market lease intangibles and non-cash interest income adjustments), non-cash expenses (including stock-based compensation expense and amortization of deferred financing costs) and acquisition pursuit costs, 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 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 from the Company.

Normalized AFFO. Normalized AFFO represents AFFO adjusted for one-time start-up costs and non-recurring income and expenses. The Company considers normalized AFFO to be a useful measure to evaluate the Company’s operating results excluding start-up costs and non-recurring income and expenses. Normalized AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized AFFO does 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 AFFO also does not consider the costs associated with capital expenditures related to the Company’s real estate assets nor does it purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of normalized AFFO may not be comparable to 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 AFFO or normalized AFFO differently from the Company.

Tenant EBITDAR. Facility EBITDAR, as defined herein, plus EBITDAR (excluding one-time adjustments) for the period presented for all other operations of any entities that guarantee the tenants' lease obligations to the Company. The Company uses Tenant EBITDAR in determining Tenant EBITDAR Coverage. As with Facility EBITDAR, the Company receives the underlying information from its tenants and, with respect to Tenant EBITDAR, the guarantors of its tenants' lease obligation to the Company. To the extent that a particular tenant's lease obligations are not guaranteed by another entity, Tenant EBITDAR and Facility EBITDAR with respect to a particular tenant are the same. The Company utilizes Tenant EBITDAR as a supplemental measure of the ability of the tenant to meet its cash rent and other obligations to the Company should the facilities be unable to generate sufficient liquidity to meet related obligations to the Company. The usefulness of Tenant EBITDAR is limited by the same factors that limit the usefulness of Facility EBITDAR. All facility and tenant financial performance data was derived solely from information provided by operators/tenants, guarantors and borrowers without independent verification by the Company. All facility and tenant financial performance data are presented one month in arrears. The Company includes Tenant EBITDAR with respect to property if the property was operated at any time during the period presented subject to a lease with the Company. Tenant EBITDAR for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities.

Tenant EBITDAR Coverage. Tenant EBITDAR for the trailing 3 and 12 month periods prior to and including the period presented divided by the same period rent for all of our facilities plus rent expense for other operations of any entity that guarantees the tenants' lease obligation to the Company. Tenant EBITDAR coverage is a supplemental measure of a tenant's ability to meet its cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR and Tenant EBITDAR. All facility and tenant financial performance data were derived solely from information provided by operators/tenants, guarantors and borrowers without independent verification by the Company. All facility and tenant financial performance data are presented one month in arrears.

10

EX-99.2

Exhibit 99.2

Supplemental Information

June 30, 2012

(Unaudited)

Disclaimer

Certain statements in this supplement contain "forward-looking" information as that term is defined by the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include all statements regarding our expected future financial position, results of operations, business strategy, growth opportunities, potential acquisitions, and plans and objectives for future operations. You can identify some of the forward-looking statements by the use of forward-looking words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “should,” “may” and other similar expressions, although not all forward-looking statements contain these identifying words.

Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: our dependence on Sun Healthcare Group, Inc. (“Sun”) until we are able to further diversify our portfolio; our dependence on the operating success of our tenants; changes in general economic conditions and volatility in financial and credit markets; the dependence of our tenants on reimbursement from governmental and other third-party payors; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to make acquisitions, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; our ability to raise capital through equity financings; the relatively illiquid nature of real estate investments; competitive conditions in our industry; the loss of key management personnel or other employees; the impact of litigation and rising insurance costs on the business of our tenants; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; our ability to qualify and maintain our status as a REIT; compliance with REIT requirements and certain tax matters related to status as a REIT; and other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission (the “SEC”), especially the “Risk Factors” sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. We do not intend, and we undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this supplement or to reflect the occurrence of unanticipated events, unless required by law to do so.

Note Regarding Non-GAAP Financial Measures

This supplement includes the following financial measures defined as non-GAAP financial measures by the SEC: EBITDA, funds from operations (“FFO”), adjusted FFO (“AFFO”), normalized AFFO, FFO per diluted share, AFFO per diluted share and normalized AFFO per diluted share. These measures may be different than non-GAAP financial measures used by other companies, and the presentation of these measures is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with U.S. generally accepted accounting principles. Explanations of these non-GAAP financial measures are included under “Reporting Definitions” in this supplement and reconciliations of these non-GAAP financial measures to the GAAP financial measures we consider most comparable are included under “Reconciliations of Net Income to EBITDA, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO” in this supplement.

Tenant Information

This supplement includes information regarding Sun. Sun is subject to the reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Sun's filings with the SEC can be found at www.sec.gov. This supplement also includes information regarding each of our other tenants that lease properties from us. The information related to Sun and our other tenants that is provided in this supplement has been provided by the tenants or, in the case of Sun, derived from Sun's public filings or provided by Sun. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only.

Table of Contents

Company Information	1
Company Fact Sheet	2
Financial Highlights	3
Consolidated Statements of Income	4
Consolidated Balance Sheets	5
Consolidated Statement of Cash Flows	6
Reconciliations of Net Income to EBITDA, Funds from Operations (FFO),
Adjusted Funds from Operations (AFFO) and Normalized AFFO	7
Capitalization	8
Indebtedness	9
Debt Covenants	10
Portfolio Summary	11
Investment Activity	12
Real Estate Portfolio Geographic Concentrations
Property Type	13
Distribution of Licensed Beds/Units	13
Investment	14
Rental Income - Three Months Ended June 30, 2012	15
Rental Income - Six Months Ended June 30, 2012	15
Skilled Mix and Occupancy Percentage	16
Portfolio Lease Expirations	17
Recent Investment Activity
Investment Overview	18
Pro Forma Information	21
Reporting Definitions	22

Company Information

Board of Directors

Richard K. Matros Chairman of the Board, President and Chief Executive Officer Sabra Health Care REIT, Inc.	Michael J. Foster Managing Director RFE Management Corp.
Milton J. Walters President Tri-River Capital	Robert A. Ettl Chief Operating Officer Harvard Management Company
Craig A. Barbarosh Partner Katten Muchin Rosenman LLP

Senior Management

Richard K. Matros Chairman of the Board, President and Chief Executive Officer	Harold W. Andrews, Jr. Executive Vice President, Chief Financial Officer and Secretary
Talya Nevo-Hacohen Executive Vice President, Chief Investment Officer and Treasurer

Other Information

Corporate Headquarters 18500 Von Karman Avenue, Suite 550 Irvine, CA 92612 Transfer Agent American Stock Transfer and Trust Company 6201 15th Avenue Brooklyn, NY 11219

www.sabrahealth.com

The information in this supplemental information package should be read in conjunction with the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the SEC. The Reporting Definitions and Reconciliations of Non-GAAP Measures are an integral part of the information presented herein.

On Sabra's website, www.sabrahealth.com, you can access, free of charge, Sabra’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such material is filed with, or furnished to, the SEC. The information contained on Sabra’s website is not incorporated by reference into, and should not be considered a part of, this supplemental information package. All material filed with the SEC can also be accessed through their website, www.sec.gov.

For more information, contact Harold W. Andrews, Jr., Executive Vice President, Chief Financial Officer and Secretary at (949) 679-0243.

1

SABRA HEALTH CARE REIT, INC.

COMPANY FACT SHEET

Company Profile

Sabra Health Care REIT, Inc., a Maryland corporation (“Sabra,” the “Company” or “we”), operates as a self-administered, self-managed real estate investment trust (“REIT”) that, through its subsidiaries, owns and invests in real estate serving the healthcare industry. Sabra primarily generates revenues by leasing properties to tenants and operators throughout the United States.

As of June 30, 2012, Sabra’s portfolio included 103 real estate properties (consisting of (i) 93 skilled nursing/post-acute facilities, (ii) nine senior housing facilities, and (iii) one acute care hospital), one mortgage loan investment and one mezzanine loan investment. As of June 30, 2012, Sabra’s real estate properties are located in 25 states and included 11,392 licensed beds.

Objectives and Strategies

Sabra’s business strategies focus on opportunistic acquisitions and property diversification. Sabra expects to continue to grow its portfolio primarily through the acquisition of healthcare facilities with a focus on skilled nursing, assisted living and memory care facilities and through the origination of financing secured directly or indirectly by healthcare facilities. Sabra also expects to opportunistically consider acquiring independent living and continuing care retirement community facilities and hospitals. Sabra intends to finance its investments with cash on hand and availability under its secured revolving credit facility, and proceeds from its July 2012 offering of $100 million aggregate principal amount of 8.125% senior notes. As Sabra acquires additional properties and expands its portfolio, Sabra expects to further diversify by tenant, asset class and geography within the healthcare sector. Sabra employs a disciplined, opportunistic approach in its healthcare real estate investment strategy by investing in assets that provide attractive opportunities for dividend growth and

appreciation of asset values, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value.

Market Facts		Portfolio Information (as of June 30, 2012)
Stock Information (as of June 30, 2012)		Investments
Closing Price:	$17.11	Equity Investments
52-Week range:	$7.86 - $17.25	Skilled Nursing/Post-Acute	93
Market Capitalization:	$633.9 million	Senior Housing	9
Enterprise Value:	$1.1 billion	Acute Care Hospital	1
Outstanding Shares:	37.1 million		103
Ticker symbol:	SBRA	Debt Investments	2
Stock Exchange:	NASDAQ	Total Investments	105
Credit Ratings
Moody's:	B1 (stable)	Bed/Unit Count
S&P:		Skilled Nursing/Post-Acute	10,549
Corporate Rating	B+ (stable)	Senior Housing	773
Senior Notes Rating	BB-	Acute Care Hospital	70
		Total Beds/Units	11,392

See reporting definitions. 2

SABRA HEALTH CARE REIT, INC.

FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Revenues	$	25,117		$	18,805		$	48,844	$	36,407
EBITDA	$	21,628		$	15,882		$	41,034	$	30,815
Net income	$	5,923		$	2,087		$	10,328	$	3,335
FFO	$	13,480		$	8,377		$	25,188	$	15,712
AFFO	$	15,669		$	10,308		$	29,668	$	19,368
Normalized AFFO	$	15,669		$	10,308		$	29,668	$	19,678
Per share data:
Diluted EPS	$	0.16		$	0.08		$	0.28	$	0.13
Diluted FFO	$	0.36		$	0.33		$	0.68	$	0.62
Diluted AFFO	$	0.42		$	0.40		$	0.79	$	0.76
Diluted Normalized AFFO	$	0.42		$	0.40		$	0.79	$	0.77
Weighted-average number of common shares outstanding, diluted:
EPS & FFO	37,191,687			25,226,179			37,119,005		25,210,575
AFFO & Normalized AFFO	37,538,337			25,480,729			37,472,271		25,474,693
Net cash flow from operations	$	7,623		$	5,470		$	24,087	$	17,928
	June 30, 2012			December 31, 2011
Real Estate Portfolio
Total Equity Investments (#)	103			97
Total Equity Investments, gross ($)	$	821,990		$	767,054
Total Licensed Beds/Units	11,392			10,877
Weighted Average Remaining Lease Term (in months)	142			144
Total Debt Investments (#)	2			—
Total Debt Investments, gross ($) (2)	$	21,202		$	—
	Three Months Ended June 30, 2012			Twelve Months Ended June 30, 2012
Adjusted Facility EBITDARM Coverage (1)	1.80x			1.81x
Adjusted Facility EBITDAR Coverage (1)	1.34x			1.34x
Adjusted Tenant EBITDAR Coverage (1)	1.55x			1.55x
	June 30, 2012			December 31, 2011
Debt (3)
Principal
Fixed Rate Debt	$	324,310		$	324,239
Variable Rate Debt	101,062			59,159
Total Debt	$	425,372		$	383,398
Weighted Average Effective Rate
Fixed Rate Debt	7.33		%	7.55		%
Variable Rate Debt	4.36		%	5.50		%
Total Debt	6.62		%	7.24		%
% of Total
Fixed Rate Debt	76.2		%	84.6		%
Variable Rate Debt	23.8		%	15.4		%
Total Debt	100.0		%	100.0		%
Availability Under Credit Facility:	$	157,500		$	100,000
Available Liquidity (Unrestricted Cash and Availability Under Credit Facility)	$	160,610		$	142,250

⁽¹⁾ Adjusted Facility EBITDAR, Adjusted Facility EBITDARM and Adjusted Tenant EBITDAR and related coverages for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities. All facility financial performance data are presented one month in arrears. Adjusted coverages exclude the impact of strategic disposition candidates. Including the impact of one facility identified as a strategic disposition candidate, for the three months ended June 30, 2012, Facility EBITDARM, Facility EBITDAR and Tenant EBITDAR are 1.76x, 1.30x and 1.53x, respectively; and for the twelve months ended June 30, 2012, Facility EBITDARM, Facility EBITDAR and Tenant EBITDAR are 1.78x, 1.31x and 1.53x, respectively.

⁽²⁾ Total Debt Investments, gross consists of principal of $21.0 million plus capitalized origination fees of $0.2 million.

⁽³⁾ Subsequent to June 30, 2012, we issued an additional $100 million aggregate principal amount of senior notes, with gross proceeds of $106 million and net proceeds of $103.8 million after underwriting costs but before other offering expenses. A portion of the proceeds was used to repay the $42.5 million outstanding on our secured revolving credit facility. After taking into account the July 2012 issuance of senior notes and the repayment of the amount outstanding on our secured revolving credit facility, total debt and available liquidity on a proforma basis was $488.9 million and $264.4 million, respectively.

See reporting definitions. 3

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Revenues:
Rental income	$	24,820	$	18,628	$	48,483	$	36,190
Interest income	297		177		361		217
Total revenues	25,117		18,805		48,844		36,407
Expenses:
Depreciation and amortization	7,557		6,290		14,860		12,377
Interest	8,148		7,505		15,846		15,103
General and administrative	3,489		2,923		7,810		5,592
Total expenses	19,194		16,718		38,516		33,072
Net income	$	5,923	$	2,087	$	10,328	$	3,335
Net income per common share, basic	$	0.16	$	0.08	$	0.28	$	0.13
Net income per common share, diluted	$	0.16	$	0.08	$	0.28	$	0.13
Weighted-average number of common shares outstanding, basic	37,147,942		25,154,284		37,092,683		25,140,781
Weighted-average number of common shares outstanding, diluted	37,191,687		25,226,179		37,119,005		25,210,575

See reporting definitions. 4

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

	June 30, 2012			December 31, 2011
Assets
Real estate investments, net of accumulated depreciation of $123,651 and $108,916 as of June 30, 2012 and December 31, 2011, respectively	$	698,578		$	658,377
Loans receivable, net	21,193			—
Cash and cash equivalents	3,110			42,250
Restricted cash	7,076			6,093
Deferred tax assets	25,540			25,540
Prepaid expenses, deferred financing costs and other assets	23,021			17,390
Total assets	$	778,518		$	749,650
Liabilities and stockholders’ equity
Mortgage notes payable	$	157,872		$	158,398
Secured revolving credit facility	42,500			—
Senior unsecured notes payable	225,000			225,000
Accounts payable and accrued liabilities	11,181			14,139
Tax liability	25,540			25,540
Total liabilities	462,093			423,077
Stockholders’ equity
Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2012 and December 31, 2011	—			—
Common stock, $.01 par value; 125,000,000 shares authorized, 37,051,242 and 36,891,712 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively	371			369
Additional paid-in capital	349,272			344,995
Cumulative distributions in excess of net income	(33,218		)	(18,791		)
Total stockholders’ equity	316,425			326,573
Total liabilities and stockholders’ equity	$	778,518		$	749,650

See reporting definitions. 5

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities:
Net income	$	10,328		$	3,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,860			12,377
Non-cash interest income adjustments	9			—
Amortization of deferred financing costs	1,447			995
Stock-based compensation expense	3,842			2,478
Amortization of premium on notes payable	(8		)	(8		)
Straight-line rental income adjustments	(1,690		)	(128		)
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(779		)	219
Accounts payable and accrued liabilities	(1,914		)	485
Restricted cash	(2,008		)	(1,825		)
Net cash provided by operating activities	24,087			17,928
Cash flows from investing activities:
Acquisitions of real estate	(55,550		)	(74,000		)
Origination of loans receivable	(21,176		)	—
Acquisition of note receivable	—			(5,348		)
Additions to real estate	(730		)	(86		)
Net cash used in investing activities	(77,456		)	(79,434		)
Cash flows from financing activities:
Proceeds from secured revolving credit facility	42,500			—
Proceeds from mortgage notes payables	21,947			—
Principal payments on mortgage notes payable	(22,464		)	(1,499		)
Payments of deferred financing costs	(3,435		)	(270		)
Issuance of common stock	144			547
Dividends paid	(24,463		)	(8,051		)
Net cash provided by (used in) financing activities	14,229			(9,273		)
Net decrease in cash and cash equivalents	(39,140		)	(70,779		)
Cash and cash equivalents, beginning of period	42,250			74,233
Cash and cash equivalents, end of period	$	3,110		$	3,454
Supplemental disclosure of cash flow information:
Interest paid	$	14,677		$	14,476

See reporting definitions. 6

SABRA HEALTH CARE REIT, INC.

RECONCILIATIONS OF NET INCOME TO EBITDA, FUNDS FROM OPERATIONS (FFO),

ADJUSTED FUNDS FROM OPERATIONS (AFFO) AND NORMALIZED AFFO

(dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net income	$	5,923		$	2,087		$	10,328		$	3,335
Interest expense	8,148			7,505			15,846			15,103
Depreciation and amortization	7,557			6,290			14,860			12,377
EBITDA	$	21,628		$	15,882		$	41,034		$	30,815
Net income	$	5,923		$	2,087		$	10,328		$	3,335
Add:
Depreciation of real estate assets	7,557			6,290			14,860			12,377
Funds from Operations (FFO)	$	13,480		$	8,377		$	25,188		$	15,712
Acquisition pursuit costs	381			224			872			311
Stock-based compensation expense	1,639			1,335			3,842			2,478
Straight-line rental income adjustments	(721		)	(128		)	(1,690		)	(128		)
Amortization of deferred financing costs	881			500			1,447			995
Non-cash interest income adjustments	9			—			9			—
Adjusted Funds from Operations (AFFO)	$	15,669		$	10,308		$	29,668		$	19,368
Start-up costs	—			—						310
Normalized AFFO	$	15,669		$	10,308		$	29,668		$	19,678
Net income per diluted common share	$	0.16		$	0.08		$	0.28		$	0.13
FFO per diluted common share	$	0.36		$	0.33		$	0.68		$	0.62
AFFO per diluted common share	$	0.42		$	0.40		$	0.79		$	0.76
Normalized AFFO per diluted common share	$	0.42		$	0.40		$	0.79		$	0.77
Weighted average number of common shares outstanding, diluted:
Net income and FFO	37,191,687			25,226,179			37,119,005			25,210,575
AFFO and Normalized AFFO	37,538,337			25,480,729			37,472,271			25,474,693

See reporting definitions. 7

SABRA HEALTH CARE REIT, INC.

CAPITALIZATION

(dollars in thousands, except per share data)

Debt	June 30, 2012		December 31, 2011
Secured mortgage debt	$	157,872	$	158,398
Senior unsecured notes	225,000		225,000
Revolving line of credit	42,500		—
Total debt	$	425,372	$	383,398

Book capitalization(1)
Total debt	$	425,372	$	383,398
Total equity	316,425		326,573
Book capitalization	741,797		709,971
Accumulated depreciation and amortization	123,651		108,916
Undepreciated book capitalization	$	865,448	$	818,887

Enterprise Value
As of June 30, 2012	Shares Outstanding	Price		Value
Common stock	37,051,242	$	17.11	$	633,947
Total debt				425,372
Cash and cash equivalents				(3,110		)
Total enterprise value				$	1,056,209
As of December 31, 2011	Shares Outstanding	Price		Value
Common stock	36,891,712	$	12.09	$	446,021
Total debt				383,398
Cash and cash equivalents				(42,250		)
Total enterprise value				$	787,169

Common Stock and Equivalents
	Weighted Avg. Common Shares
	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
	EPS & FFO	AFFO & Normalized AFFO	EPS & FFO	AFFO & Normalized AFFO
Common stock	37,037,972	37,037,972	36,985,117	36,985,117
Common equivalents	109,970	109,970	107,566	107,566
Basic common and common equivalents	37,147,942	37,147,942	37,092,683	37,092,683
Dilutive securities:
Restricted stock and units	40,966	387,616	24,494	377,760
Options	2,779	2,779	1,828	1,828
Diluted common and common equivalents	37,191,687	37,538,337	37,119,005	37,472,271

⁽¹⁾ Book capitalization is based on the historical carrying value of Sabra’s real estate investments as previously reported by Old Sun (as discussed in the Company Profile section of this supplement). Therefore, total equity does not reflect any fair market value adjustment for Sabra’s real estate investments as of November 15, 2010 (the Separation Date), and accumulated depreciation and amortization are for the period from the date of acquisition of the assets by Old Sun to June 30, 2012.

See reporting definitions. 8

SABRA HEALTH CARE REIT, INC.

INDEBTEDNESS

June 30, 2012

(dollars in thousands)

	Principal		Weighted Average Effective Rate		% of Total
Fixed rate debt
Secured mortgage debt (1)	$	99,310	5.52	%	23.3	%
Unsecured senior notes	225,000		8.13	%	52.9	%
Total fixed rate debt (4)	324,310		7.33	%	76.2	%
Variable rate debt
Secured mortgage debt(2)	58,562		5.00	%	13.8	%
Revolving line of credit (3)	42,500		3.49	%	10.0	%
Total variable rate debt (4)	101,062		4.36	%	23.8	%
Total debt	$	425,372	6.62	%	100.0	%
Secured debt
Secured mortgage debt	$	157,872	5.33	%	37.1	%
Revolving line of credit (3)	42,500		3.49	%	10.0	%
Total secured debt (4)	200,372		4.94	%	47.1	%
Unsecured debt
Unsecured senior notes	225,000		8.13	%	52.9	%
Total unsecured debt (4)	225,000		8.13	%	52.9	%
Total debt	$	425,372	6.62	%	100.0	%

⁽¹⁾ Fixed rate secured mortgage debt includes $31.1 million which converts to a variable interest rate based on 90-day LIBOR plus 4.0% (1.00% floor) effective January 2014. This debt matures in August 2015. Fixed rate secured mortgage debt includes $0.5 million of mortgage premium.

⁽²⁾ Variable rate secured mortgage debt interest is based on 90-day LIBOR plus 4.0% (1.00% floor).

⁽³⁾ Borrowings under the revolving line of credit bear interest on the outstanding principal amount at a rate equal to, at our option, LIBOR plus 3.00% - 4.00% or a Base Rate plus 2.00% - 3.00%. The actual interest rate within the applicable range is determined based on our then applicable Consolidated Leverage Ratio.

⁽⁴⁾ On a pro forma basis, after taking into account the July 2012 issuance of senior notes and the repayment of the secured revolving line of credit, total fixed rate debt was $430.3 million with a weighted average effective interest rate of 7.23% and total variable rate debt was $58.6 million with a weighted average effective interest rate of 5.00%. On a pro forma basis, after taking into account the July 2012 issuance of senior notes and the repayment of the secured revolving line of credit, total secured debt was $157.9 million with a weighted average effective interest rate of 5.33% and total unsecured debt was $331.0 million with a weighted average effective rate of 7.75%.

	Maturities
	Secured Mortgage Debt					Unsecured Senior Notes					Revolving Line of Credit					Total
	Principal			Rate		Principal			Rate		Principal			Rate		Principal			Rate
July 1 through December 31, 2012	$	1,701		5.35	%	$	—		—		$	—		—		$	1,701		5.35	%
2013	3,690			5.40	%	—			—		—			—		3,690			5.40	%
2014	3,902			5.40	%	—			—		—			—		3,902			5.40	%
2015	86,291			5.25	%	—			—		42,500			3.49	%	128,791			4.67	%
2016	1,920			4.97	%	—			—		—			—		1,920			4.97	%
2017	2,027			4.96	%	—			—		—			—		2,027			4.96	%
2018	2,140			4.94	%	225,000			8.13	%	—			—		227,140			8.10	%
2019	2,262			4.92	%	—			—		—			—		2,262			4.92	%
2020	2,391			4.89	%	—			—		—			—		2,391			4.89	%
2021	2,532			4.84	%	—			—		—			—		2,532			4.84	%
Thereafter	48,524			4.79	%	—			—		—			—		48,524			4.79	%
	157,380					225,000					42,500					424,880
Mortgage premium	492					—					—					492
Total debt	$	157,872				$	225,000				$	42,500				$	425,372
Weighted average maturity in years	13.0					6.3					2.6					8.4
Weighted average effective interest rate	5.33		%			8.13		%			3.49		%			6.62		%

See reporting definitions. 9

SABRA HEALTH CARE REIT, INC.

DEBT COVENANTS

(dollars in millions)

	Minimum			Maximum		December 31, 2011		June 30, 2012			Pro Forma as June 30, 2012 (1)
Credit Facility:
Consolidated Leverage Ratio				5.75x		4.26x		4.29x			4.88x
Consolidated Fixed Charge Coverage Ratio	1.75x					2.87x		2.97x			2.52x
Consolidated Tangible Net Worth	$	342.0				$	425.9	$	428.5		$	428.5
Unsecured Senior Notes:
Total Debt/ Asset Value				60	%	0.39		42		%	45		%
Secured Debt/ Asset Value				40	%	0.16		20		%	15		%
Unencumbered Assets/ Unsecured Debt	150		%			2.27		193		%	152		%
Minimum Interest Coverage	2.00x					3.17x		3.29x			2.75x

⁽¹⁾ Assumes the July 2012 issuance of senior notes and related repayment of the secured revolving line credit occurred as of January 1, 2012.

Note: All covenants are based on terms defined in the related credit agreement and unsecured senior notes indenture. Asset Value and Unencumbered Assets used for debt covenant calculation purposes include a value for the initial real estate portfolio obtained in the separation from Sun, which is calculated by dividing the total initial annual rental revenue from this portfolio by an assumed 9.75% capitalization rate. This results in an assumed total portfolio value for the initial real estate portfolio of $720 million.

See reporting definitions. 10

SABRA HEALTH CARE REIT, INC.

PORTFOLIO SUMMARY

June 30, 2012

(dollars in thousands)

				Rental Income					Occupancy Percentage
				Three Months Ended June 30,					Three Months Ended June 30,
Facility Type	Number of Properties	Investment		2012		2011		Number of Licensed Beds/Units	2012		2011
Skilled Nursing/Post-Acute (1)	93	$	712,458	$	21,994	$	16,493	10,549	87.9	%	87.7	%
Senior Housing (1)	9	47,892		1,178		1,072		773	78.8	%	81.6	%
Acute Care Hospital	1	61,640		1,648		1,063		70	68.6	%	75.6	%
Total	103	$	821,990	$	24,820	$	18,628	11,392	87.2	%	87.2	%

	Three Months Ended June 30, 2012			Three Months Ended June 30, 2011
Facility Type	Facility EBITDARM Coverage	Facility EBITDAR Coverage	Tenant EBITDAR Coverage	Facility EBITDARM Coverage	Facility EBITDAR Coverage	Tenant EBITDAR Coverage
Skilled Nursing/Post-Acute (1)	1.67x	1.17x	1.43x	2.13x	1.58x	1.87x
Senior Housing (1) (2)	1.33x	1.05x	1.22x	1.68x	1.38x	1.87x
Acute Care Hospital	3.46x	3.39x	3.39x	0.95x	0.88x	0.88x
Total	1.76x	1.30x	1.53x	2.01x	1.52x	1.79x
Adjusted Total (3)	1.80x	1.34x	1.55x	2.05x	1.56x	1.81x

	Twelve Months Ended June 30, 2012			Twelve Months Ended June 30, 2011
Facility Type	Facility EBITDARM Coverage	Facility EBITDAR Coverage	Tenant EBITDAR Coverage	Facility EBITDARM Coverage	Facility EBITDAR Coverage	Tenant EBITDAR Coverage
Skilled Nursing/Post-Acute (1)	1.74x	1.24x	1.47x	2.01x	1.48x	1.73x
Senior Housing (1) (2)	1.46x	1.17x	1.38x	1.68x	1.37x	1.73x
Acute Care Hospital	2.58x	2.47x	2.47x	2.26x	2.16x	2.16x
Total	1.78x	1.31x	1.53x	2.01x	1.53x	1.76x
Adjusted Total (3)	1.81x	1.34x	1.55x	2.07x	1.59x	1.79x

Loan Type	Facility Type	Principal Balance as of June 30, 2012		Book Value as of June 30, 2012		Contractual Interest Rate		Annualized Effective Interest Rate		Interest Income Three Months Ended June 30, 2012		Maturity Date
Mezzanine	Skilled Nursing / Assisted Living	$	10,000	$	10,143	11.0	%	10.7	%	$	321	03/31/17
Mortgage	Skilled Nursing	11,000		11,050		8.5	%	8.5	%	23		06/30/17
Total		$	21,000	$	21,193					$	344

	Six Months Ended June 30,
Total Revenue	2012		2011
Sun	73.7	%	96.5	%
Cadia Portfolio	10.8		—
Texas Regional Medical Center	6.7		2.9
Aurora Portfolio	2.7		—
Pennsylvania Subacute Portfolio	1.8		—
Other	4.3		0.6
Total	100.0	%	100.0	%

⁽¹⁾ Occupancy percentage, Facility EBITDAR, Facility EBITDARM and Tenant EBITDAR and related coverages for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities. All facility financial performance data are presented one month in arrears.

⁽²⁾ Excluding the impact of Creekside, which was not stabilized as of June 30, 2012, the three months ended June 30, 2012 Facility EBITDARM, Facility EBITDAR and Tenant EBITDAR for Senior Housing facilities would have been 1.55x, 1.25x and 1.44x, respectively; and for the twelve months ended June 30, 2012, Facility EBITDARM, Facility EBITDAR and Tenant EBITDAR for Senior Housing facilities would have been 1.58x, 1.28x and 1.50x, respectively.

⁽³⁾ Adjusted Total coverage excludes the impact of strategic disposition candidates.

See reporting definitions. 11

SABRA HEALTH CARE REIT, INC.

INVESTMENT ACTIVITY

For the Six Months Ended June 30, 2012

(dollars in thousands)

	Acquisition Date	Facility Type	Beds	Investment Amount		Initial Cash Yield
Real Estate Investments
Pennsylvania Subacute Portfolio	03/30/12	Skilled Nursing	120	$	29,850	9.50	%
Ridgecrest Manor	05/01/12	Skilled Nursing	120	5,700		11.00
Aurora II Portfolio (1)	06/01/12	Skilled Nursing	327	20,000		10.18
Total real estate investments			567	$	55,550	9.90	%
Debt Investments
Meridian Mezzanine Loan (2)	03/15/12			$	10,000	11.00	%
Onion Creek Mortgage Loan (3)	06/22/12			11,000		8.50
Total debt investments				21,000		9.69	%
Total Investments				$	76,550	9.84	%

⁽¹⁾ The total funds paid at closing was $21.8 million, which included $1.8 million in deferred purchase price related to the original Aurora acquisition.

⁽²⁾ Includes an option to purchase three skilled nursing facilities and one assisted living facility located in Texas.

⁽³⁾ Includes an option to purchase one skilled nursing facility located in Texas.

Annualized Revenue Concentration

As of June 30, 2011 As of June 30, 2012

See reporting definitions. 12

SABRA HEALTH CARE REIT, INC.

REAL ESTATE PORTFOLIO GEOGRAPHIC CONCENTRATIONS

June 30, 2012

Property Type

State	Skilled Nursing/Post-Acute	Senior Housing	Acute Care Hospital	Total	% of Total
New Hampshire	14	2	—	16	15.5	%
Kentucky	13	2	—	15	14.6
Connecticut	12	1	—	13	12.6
Ohio	8	—	—	8	7.8
Oklahoma	4	1	—	5	4.9
Florida	5	—	—	5	4.9
Texas	3	—	1	4	3.9
Delaware	4	—	—	4	3.9
Montana	4	—	—	4	3.9
Massachusetts	3	—	—	3	2.9
Other (15 states)	23	3	—	26	25.1
Total	93	9	1	103	100.0	%

Distribution of Licensed Beds/Units

	Total Number of Properties	Bed Type
State		Skilled Nursing/Post-Acute		Senior Housing		Acute Care Hospital		Total		% of Total
Connecticut	13	1,770		49		—		1,819		16.0	%
New Hampshire	16	1,464		203		—		1,667		14.6
Kentucky	15	1,020		128		—		1,148		10.1
Ohio	8	897		—		—		897		7.9
Florida	5	660		—		—		660		5.8
Oklahoma	5	501		83		—		584		5.1
Montana	4	538		—		—		538		4.7
Delaware	4	500		—		—		500		4.4
Texas	4	360		—		70		430		3.8
New Mexico	3	155		215		—		370		3.2
Other (15 states)	26	2,684		95		—		2,779		24.4
Total	103	10,549		773		70		11,392		100.0	%
% of Total beds/units		92.6	%	6.8	%	0.6	%	100.0	%

See reporting definitions. 13

SABRA HEALTH CARE REIT, INC.

REAL ESTATE PORTFOLIO GEOGRAPHIC CONCENTRATIONS

June 30, 2012

(dollars in thousands)

Investment

State	Total Number of Centers	Skilled Nursing/Post-Acute			Senior Housing			Acute Care Hospital			Total			% of Total
Connecticut	13	$	144,499		$	8,008		$	—		$	152,507		18.6	%
Delaware	4	95,780			—			—			95,780			11.7
New Hampshire	16	77,905			12,997			—			90,902			11.1
Texas	4	24,959			—			61,640			86,599			10.5
Kentucky	15	60,551			10,503			—			71,054			8.6
Ohio	8	43,662			—			—			43,662			5.3
Montana	4	42,809			—			—			42,809			5.2
Florida	5	31,600			—			—			31,600			3.8
Oklahoma	5	24,230			5,708			—			29,938			3.6
Pennsylvania	2	29,258			—			—			29,258			3.6
Other (15 states)	27	137,205			10,676			—			147,881			18.0
Total	103	$	712,458		$	47,892		$	61,640		$	821,990		100.0	%
% of Total Centers		86.7		%	5.8		%	7.5		%	100.0		%

See reporting definitions. 14

SABRA HEALTH CARE REIT, INC.

PORTFOLIO GEOGRAPHIC CONCENTRATIONS

June 30, 2012

(dollars in thousands)

Rental Income - Three Months Ended June 30, 2012

State	Total Number of Centers	Skilled Nursing/Post-Acute			Senior Housing			Acute Care Hospital			Total			% of Total
New Hampshire	16	$	2,955		$	335		$	—		$	3,290		13.3	%
Connecticut	13	3,055			74			—			3,129			12.6
Delaware	4	2,645			—			—			2,645			10.7
Kentucky	15	2,364			119			—			2,483			10.0
Texas	4	735			—			1,648			2,383			9.6
Florida	5	1,967			—			—			1,967			7.9
Ohio	8	1,313			—			—			1,313			5.3
Montana	4	1,304			—			—			1,304			5.3
Pennsylvania	2	847			—			—			847			3.4
Colorado	2	829			—			—			829			3.3
Other (15 states)	30	3,980			650			—			4,630			18.6
Total	103	$	21,994		$	1,178		$	1,648		$	24,820		100.0	%
% of Total centers		88.7		%	4.7		%	6.6		%	100.0		%

Rental Income - Six Months Ended June 30, 2012

State	Total Number of Centers	Skilled Nursing/Post-Acute			Senior Housing			Acute Care Hospital			Total			% of Total
New Hampshire	16	$	5,876		$	671		$	—		$	6,547		13.5	%
Connecticut	13	5,942			147			—			6,089			12.6
Delaware	4	5,289			—			—			5,289			10.9
Kentucky	15	4,729			237			—			4,966			10.2
Texas	4	1,470			—			3,297			4,767			9.8
Florida	5	3,934			—			—			3,934			8.1
Ohio	8	2,626			—			—			2,626			5.4
Montana	4	2,608			—			—			2,608			5.4
Colorado	2	1,658			—			—			1,658			3.4
Idaho	3	1,446			—			—			1,446			3.0
Other (15 states)	29	7,271			1,282			—			8,553			17.7
Total	103	$	42,849		$	2,337		$	3,297		$	48,483		100.0	%
% of Total centers		88.4		%	4.8		%	6.8		%	100.0		%

See reporting definitions. 15

SABRA HEALTH CARE REIT, INC.

SKILLED MIX AND OCCUPANCY PERCENTAGE

All Properties	Skilled Mix (1)
	Three Months Ended June 30,				Six Months Ended June 30,				Year Ended December 31,
	2012		2011		2012		2011		2011		2010		2009
Skilled Nursing	37.5	%	42.4	%	37.6	%	41.6	%	41.4	%	39.3	%	39.2	%
	Occupancy Percentage (1)
	Three Months Ended June 30,				Six Months Ended June 30,				Year Ended December 31,
	2012		2011		2012		2011		2011		2010		2009
Skilled Nursing/Post-Acute	87.9	%	87.7	%	88.2	%	88.2	%	88.0	%	88.5	%	90.1	%
Senior Housing	78.8		81.6		80.6		82.3		82.7		84.4		88.3
Acute Care Hospital	68.6		75.6		70.5		76.3		71.8		N/A		N/A
Weighted Average	87.2	%	87.2	%	87.6	%	87.7	%	87.5	%	88.2	%	90.0	%

⁽¹⁾ Skilled mix and occupancy percentage for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities. All facility financial performance data are presented one month in arrears.

See reporting definitions. 16

SABRA HEALTH CARE REIT, INC.

PORTFOLIO LEASE EXPIRATIONS

June 30, 2012

(dollars in thousands)

	2012 - 2019			2020			2021			2022			2023			2024			2025			Thereafter			Total
Skilled Nursing/Post-Acute
Properties	—			29			30			12			—			1			6			15			93
Annualized Revenues	$	—		$	24,607		$	27,183		$	8,246		$	—		$	1,821		$	5,748		$	22,286		$	89,891
Senior Housing
Properties	—			2			3			2			—			—			2			—			9
Annualized Revenues	—			1,762			1,321			474			—			—			1,225			—			4,782
Acute Care Hospital
Properties	—			—			—			—			—			—			—			1			1
Annualized Revenues	—			—			—			—			—			—			—			6,593			6,593
Total
Properties	—			31			33			14			—			1			8			16			103
Annualized Revenues	$	—		$	26,369		$	28,504		$	8,720		$	—		$	1,821		$	6,973		$	28,879		$	101,266
% of Revenue	—		%	26.1		%	28.1		%	8.6		%	—		%	1.8		%	6.9		%	28.5		%	100.0		%

See reporting definitions. 17

SABRA HEALTH CARE REIT, INC.

RECENT INVESTMENT ACTIVITY

Ridgecrest Manor

• Acquisition Date:	May 1, 2012
• Purchase Price:	$5.7 million
• Investment Type:	Equity
• Number of Properties:	1
• Location	Virginia
• Available Beds	120
• Property Type:	Skilled Nursing Facility
• Annualized GAAP Rental Income:	$0.8 million
• Initial Cash Yield:	11.00%

See reporting definitions. 18

SABRA HEALTH CARE REIT, INC.

RECENT INVESTMENT ACTIVITY

Aurora II Portfolio

• Acquisition Date:	June 1, 2012
• Purchase Price:	$20.0 million (1)
• Investment Type:	Equity
• Number of Properties:	3
• Location	Connecticut and New Hampshire
• Available Beds	327
• Property Type:	Skilled Nursing Facilities
• Annualized GAAP Rental Income:	$2.6 million
• Initial Cash Yield:	10.18%

⁽¹⁾ The total funds paid at closing was $21.8 million, which included $1.8 million in deferred purchase price related to the original Aurora acquisition.

See reporting definitions. 19

SABRA HEALTH CARE REIT, INC.

RECENT INVESTMENT ACTIVITY

Onion Creek Mortgage Loan

• Funding Date:	June 22, 2012
• Loan Amount:	$11.0 million
• Investment Type:	Debt (First Mortgage with a purchase option)
• Property Type:	Skilled Nursing Facility
• Location:	Texas
• Available Beds:	125
• Annualized GAAP Interest Income:	$0.9 million
• Initial Cash Yield:	8.50%

See reporting definitions. 20

SABRA HEALTH CARE REIT, INC.

RECENT INVESTMENT ACTIVITY - PRO FORMA INFORMATION

(dollars in thousands, except per share data)

Note: The following pro forma information assumes the acquisition of the Pennsylvania Subacute Portfolio, Ridgecrest Manor, Aurora II Portfolio and the origination of the Meridian Mezzanine loan and Onion Creek Mortgage loan were completed as of January 1, 2012.

Pro Forma Net Income, FFO, AFFO, and Normalized AFFO

	Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Net income	$	5,923		$	10,328
Revenues - real estate and debt investments	730			2,860
Depreciation and amortization - acquisitions (estimated)	(105		)	(475		)
Interest - revolving line of credit (estimated)	(193		)	(571		)
Pro forma net income	$	6,355		$	12,142
Pro forma net income	$	6,355		$	12,142
Add:
Depreciation of real estate assets (estimated)	7,662			15,335
Pro forma FFO	$	14,017		$	27,477
Straight-line rental income adjustments	(808		)	(2,057		)
Acquisition pursuit costs	381			872
Stock-based compensation expense	1,639			3,842
Amortization of deferred financing costs	881			1,447
Non-cash interest income adjustments	9			9
Pro forma AFFO	$	16,119		$	31,590
Pro forma net income per diluted common share	$	0.17		$	0.33
Pro forma FFO per diluted common share	$	0.38		$	0.74
Pro forma AFFO per diluted common share	$	0.43		$	0.84
Weighted average number of common shares outstanding, diluted
Pro forma net income and FFO	37,191,687			37,119,005
Pro forma AFFO	37,538,337			37,472,271

See reporting definitions. 21

SABRA HEALTH CARE REIT, INC.

REPORTING DEFINITIONS

Acute Care Hospital. A facility designed to provide extended medical and rehabilitation care for patients who are clinically complex and have multiple acute or chronic conditions.

Annualized Revenues. The annual straight-line rental revenues under leases. Annualized Revenues do not include tenant recoveries or additional rents.  The Company uses Annualized Revenues for the purpose of determining tenant concentrations and lease expirations.

Assisted Living Facility (“ALF”). A senior housing facility that predominantly consists of assisted living units is classified by the Company as an ALF.

Continuing Care Retirement Community (“CCRC”). A senior housing facility which provides at least three levels of care (i.e., independent living, assisted living and skilled nursing) is classified by the Company as a CCRC.

EBITDA. The real estate industry uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, as a measure of both operating performance and liquidity. The Company uses EBITDA to measure both its operating performance and liquidity. By excluding interest expense, EBITDA allows investors to measure the Company’s operating performance independent of its capital structure and indebtedness and, therefore, allows for a more meaningful comparison of its operating performance between quarters as well as annual periods and to compare its operating performance to that of other companies, both in the real estate industry and in other industries. As a liquidity measure, the Company believes that EBITDA helps investors analyze the Company’s ability to meet its interest payments on outstanding debt. The Company believes investors should consider EBITDA in conjunction with net income (the primary measure of the Company’s performance) and the other required GAAP measures of its performance and liquidity, to improve their understanding of the Company’s operating results and liquidity, and to make more meaningful comparisons of its performance between periods and against other companies. EBITDA has limitations as an analytical tool and should be used in conjunction with the Company’s required GAAP presentations. EBITDA does not reflect the Company’s historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, the Company’s computation of EBITDA may not be comparable to similar measures reported by other companies.

Enterprise Value. The Company believes Enterprise Value is an important measurement as it is a measure of a company’s value. We calculate Enterprise Value as market equity capitalization plus debt. Market equity capitalization is calculated as the number of shares of common stock multiplied by the closing price of our common stock on the last day of the period presented. Total Enterprise Value includes our market equity capitalization and consolidated debt, less cash and cash equivalents.

Facility EBITDAR(M). Earnings before interest, taxes, depreciation, amortization, rent (“EBITDAR”) and management fees ("EBITDARM") for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses Facility EBITDAR(M) in determining Facility EBITDAR(M) Coverages. Facility EBITDAR(M) has limitations as an analytical tool. Facility EBITDAR(M) does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDAR(M) does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators. However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management. The Company utilizes Facility EBITDAR(M) as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company and EBITDARM in particular to evaluate the core operations of the properties by eliminating management fees, which vary based on operator/tenant and its operating structure. All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. All facility financial performance data are presented one month in arrears. The Company includes Facility EBITDAR(M) for a property if it was operated at any time during the period presented subject to a lease with the Company. Facility EBITDAR(M) for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities.

Facility EBITDAR(M) Coverage. Facility EBITDAR(M) for the trailing 3 and 12 month periods prior to and including the period presented divided by the same period cash rent. Facility EBITDAR(M) coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR(M). All facility financial performance data were derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. All facility financial performance data are presented one month in arrears.

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SABRA HEALTH CARE REIT, INC.

REPORTING DEFINITIONS

Funds From Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that Funds From Operations, 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 or AFFO (and related per share amounts) are important non-GAAP supplemental measures of operating performance for a real estate investment trust. 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, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization. AFFO is defined as FFO excluding non-cash revenues (including straight-line rental income adjustments, amortization of acquired above/below market lease intangibles and non-cash interest income adjustments), non-cash expenses (including stock-based compensation expense and amortization of deferred financing costs) and acquisition pursuit costs. 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 operating results of real estate investment trusts among investors and makes comparisons of operating results among such companies more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, and, for AFFO, by excluding non-cash revenues (including straight-line rental income adjustments, amortization of acquired above/below market lease intangibles and non-cash interest income adjustments), non-cash expenses (including stock-based compensation expense and amortization of deferred financing costs) and acquisition pursuit costs, 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 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 from the Company.

Independent Living Facility (“ILF”). A senior housing facility that predominantly consists of independent living units.

Investment. Represents the carrying amount of real estate assets after adding back accumulated depreciation and amortization.

Licensed Beds/Units. Senior housing facilities are measured in units (e.g., studio, one or two bedroom units). Skilled nursing and mental health facilities are measured in licensed bed count. All facility financial performance data were derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.

Market Capitalization. Total common shares of Sabra outstanding multiplied by the closing price per share as of a given period.

Mental Health Facility. Mental Health Facilities provide a range of inpatient and outpatient behavioral health services for adults and children through specialized treatment programs.

Multi-License Designation. A senior housing facility that provides two levels of care (i.e. skilled nursing and assisted living or assisted living and independent living) is classified by the Company as Multi-License Designation.

Normalized AFFO. Normalized AFFO represents AFFO adjusted for one-time start-up costs and non-recurring income and expenses. The Company considers normalized AFFO to be a useful measure to evaluate the Company’s operating results excluding start-up costs and non-recurring income and expenses. Normalized AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized AFFO does 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 AFFO also does not consider the costs associated with capital expenditures related to the Company’s real estate assets nor does it purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of normalized AFFO may not be comparable to 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 AFFO or normalized AFFO differently from the Company.

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SABRA HEALTH CARE REIT, INC.

REPORTING DEFINITIONS

Occupancy Percentage. Occupancy Percentage represents the facilities’ average operating occupancy for the period indicated. The percentages are calculated by dividing the actual census from the period presented by the available beds/units for the same period. Occupancy for independent living facilities can be greater than 100% for a given period as multiple residents could occupy a single unit. All facility financial performance data were derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. All facility financial performance data are presented one month in arrears. The Company includes the occupancy percentage for a property if it was owned by the Company at any time during the period presented. Occupancy Percentage for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities.

Senior Housing. Senior housing facilities include independent living, assisted living and continuing care retirement community facilities.

Skilled Mix. Skilled Mix is defined as the total Medicare and non-Medicaid managed care patient revenue at skilled nursing facilities divided by the total revenues at skilled nursing facilities for any given period. All facility financial performance data were derived solely from information provided by the Company's tenants without independent verification by the Company. All facility financial performance data are presented one month in arrears. The Company includes skilled mix for a property if it was owned by the Company at any time during the period presented. Skilled Mix for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities.

Skilled Nursing/Post-Acute. Skilled nursing/post-acute facilities include skilled nursing facilities, multi-license designation, and mental health facilities.

Tenant EBITDAR. Facility EBITDAR, as defined herein, plus EBITDAR (excluding one-time adjustments) for the period presented for all other operations of any entities that guarantee the tenants' lease obligations to the Company. The Company uses Tenant EBITDAR in determining Tenant EBITDAR Coverage. As with Facility EBITDAR, the Company receives the underlying information from its tenants and, with respect to Tenant EBITDAR, the guarantors of its tenants' lease obligation to the Company. To the extent that a particular tenant's lease obligations are not guaranteed by another entity, Tenant EBITDAR and Facility EBITDAR with respect to a particular tenant are the same. The Company utilizes Tenant EBITDAR as a supplemental measure of the ability of the tenant to meet its cash rent and other obligations to the Company should the facilities be unable to generate sufficient liquidity to meet related obligations to the Company. The usefulness of Tenant EBITDAR is limited by the same factors that limit the usefulness of Facility EBITDAR. All facility and tenant financial performance data was derived solely from information provided by operators/tenants, guarantors and borrowers without independent verification by the Company. All facility and tenant financial performance data are presented one month in arrears. The Company includes Tenant EBITDAR with respect to property if the property was operated at any time during the period presented subject to a lease with the Company. Tenant EBITDAR for facilities with new tenants/operators are only included in periods subsequent to our acquisition of the facilities.

Tenant EBITDAR Coverage. Tenant EBITDAR for the trailing 3 and 12 month periods prior to and including the period presented divided by the same period rent for all of our facilities plus rent expense for other operations of any entity that guarantees the tenants' lease obligation to the Company. Tenant EBITDAR coverage is a supplemental measure of a tenant's ability to meet its cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR and Tenant EBITDAR. All facility and tenant financial performance data were derived solely from information provided by operators/tenants, guarantors and borrowers without independent verification by the Company. All facility and tenant financial performance data are presented one month in arrears.

Total Debt. The carrying amount of the Company’s secured revolving credit facility, senior unsecured notes, and mortgage indebtedness, as reported in the Company’s consolidated financial statements.

Total Secured Debt. Mortgage and other debt secured by real estate.

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