EX-99.3 4 sbraex9932022q4.htm Q4 2022 NON-GAAP RECONCILIATIONS Document

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Reconciliations of Non-GAAP Financial Measures

December 31, 2022

(Unaudited)



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
FFO, Normalized FFO, AFFO and Normalized AFFO
(dollars in thousands, except per share data)
Three Months Ended December 31,Year Ended December 31,
 2022202120222021
Net loss$(84,948)$(24,353)$(77,605)$(113,256)
Add:
Depreciation and amortization of real estate assets49,927 45,079 187,782 178,991 
Depreciation, amortization and impairment of real estate assets related to unconsolidated joint ventures6,239 9,600 22,095 26,129 
Net loss (gain) on sales of real estate7,430 (14,085)12,011 (12,301)
Net (gain) loss on sales of real estate related to unconsolidated joint ventures— 3 (220)33 
Impairment of real estate21,440 9,004 94,042 9,499 
Other-than-temporary impairment of unconsolidated joint ventures57,778 — 57,778 164,126 
FFO$57,866 $25,248 $295,883 $253,221 
Write-offs of cash and straight-line rental income receivable and lease intangibles— 18,745 15,831 40,759 
Lease termination income(139)— (2,477)— 
Loss on extinguishment of debt— 32,862 411 34,622 
Provision for credit and loan losses and other reserves153 2,045 141 3,935 
Deferred tax valuation allowance related to unconsolidated joint ventures19,613 — 19,613 — 
Support payments paid to joint venture manager (1)
6,370 7,350 12,250 9,800 
Other normalizing items (2)
842 1,792 3,428 2,644 
Normalized FFO$84,705 $88,042 $345,080 $344,981 
FFO$57,866 $25,248 $295,883 $253,221 
Stock-based compensation expense2,086 927 7,453 7,914 
Non-cash rental and related revenues(2,787)15,710 2,183 25,823 
Non-cash interest income(602)(544)(2,285)(1,988)
Non-cash interest expense2,794 2,979 11,094 8,368 
Non-cash portion of loss on extinguishment of debt— 2,666 411 4,426 
Provision for loan losses and other reserves153 2,045 141 3,935 
Deferred tax valuation allowance related to unconsolidated joint ventures19,613 — 19,613 — 
Other adjustments related to unconsolidated joint ventures(1,099)(3,687)(5,155)(5,051)
Other adjustments44 172 2,474 492 
AFFO$78,068 $45,516 $331,812 $297,140 
Cash portion of lease termination income(139)— (2,477)— 
Cash portion of loss on extinguishment of debt— 30,196 — 30,196 
Write-off of cash rental income— — 71 — 
Support payments paid to joint venture manager (1)
6,370 7,350 12,250 9,800 
Other normalizing items (2)
827 1,752 1,077 2,715 
Normalized AFFO$85,126 $84,814 $342,733 $339,851 
Amounts per diluted common share:
Net loss$(0.37)$(0.11)$(0.34)$(0.52)
FFO$0.25 $0.11 $1.28 $1.15 
Normalized FFO$0.37 $0.39 $1.49 $1.57 
AFFO$0.34 $0.20 $1.43 $1.35 
Normalized AFFO$0.37 $0.37 $1.47 $1.54 
Weighted average number of common shares outstanding, diluted:
Net loss230,986,260 227,519,771 230,947,895 219,073,027 
FFO and Normalized FFO 232,059,703 228,591,078 231,851,542 220,102,563 
AFFO and Normalized AFFO 232,868,137 228,992,103 232,784,543 220,526,512 
(1)    Funding for support payments did not require capital contributions from Sabra but rather were funded with proceeds received by our Enlivant unconsolidated joint venture from TPG for the issuance of senior preferred interests for 2022 and 4Q 2021 and with cash on hand at the joint venture for 2Q 2021.
(2)     FFO and AFFO for year ended December 31, 2022 and 2021 includes $1.2 million and $0.4 million, respectively, earned during the period related to legacy Care Capital Properties, Inc. investments. FFO for the year ended December 31, 2022, includes $2.2 million of foreign currency transaction loss related to our Canadian borrowings. In addition, other normalizing items for FFO and AFFO include triple-net operating expenses, net of recoveries.
logo2.jpg See reporting definitions.                        2



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
EBITDA, Adjusted EBITDA, Annualized Adjusted EBITDA and Pro Forma Annualized Adjusted EBITDA
Net Debt and Net Debt to Adjusted EBITDA
(in thousands) 
Year Ended
December 31, 2022
Net loss$(77,605)
Interest105,471 
Income tax expense1,242 
Depreciation and amortization187,782 
EBITDA$216,890 
Loss from unconsolidated joint ventures40,254 
Other-than-temporary impairment of unconsolidated joint ventures57,778 
Stock-based compensation expense 7,453 
Merger and acquisition costs29 
Provision for loan losses and other reserves and non-cash revenue write-offs17,070 
Impairment of real estate94,042 
Loss on extinguishment of debt411 
Other expense2,984 
Lease termination income(2,477)
Net loss on sales of real estate12,011 
Adjusted EBITDA (1)
$446,445 
Annualizing adjustments (2)
(3,040)
Annualized Adjusted EBITDA (3)
$443,405 
Pro Forma adjustments for:
Post-quarter dispositions and acquisitions (4)
(5,151)
Pro Forma Annualized Adjusted EBITDA (5)
$438,254 
December 31, 2022
Secured debt$50,123 
Revolving credit facility178,525 
Term loans540,745 
Senior unsecured notes1,750,000 
Consolidated Debt2,519,393 
Cash and cash equivalents(49,308)
Net Debt (6)
$2,470,085 
Post-quarter dispositions and acquisitions (4)
(111,117)
Pro Forma Net Debt$2,358,968 
December 31, 2022
Net Debt$2,358,968 
Annualized Adjusted EBITDA$438,254 
Net Debt to Adjusted EBITDA5.38x
(1)    Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company’s long-term equity award program and loan loss reserves.
(2)    Annualizing adjustments give effect to the acquisitions and dispositions completed during the twelve months ended for the period as though such acquisitions and dispositions were completed as of the beginning of the period.
(3)    Annualized Adjusted EBITDA is calculated as Adjusted EBITDA as adjusted to give effect to the adjustments described in footnote 2 above.
(4)    Adjustment that gives effect to dispositions and acquisitions completed subsequent to the end of the period as though such dispositions and acquisitions were completed at the beginning of the period.
(5)    Pro Forma Annualized Adjusted EBITDA is calculated as Annualized Adjusted EBITDA to give effect to the adjustment described in footnote 4 above.
(6)    Net Debt assumes the January 4, 2023 amendment and restatement of our credit agreement was completed as of December 31, 2022.
logo2.jpg See reporting definitions.                        3



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Consolidated Statements of Loss
Supplemental Information
(in thousands)

Three Months Ended December 31,Year Ended December 31,
 2022202120222021
Cash rental income$96,501 $99,023 $385,033 $404,503 
Straight-line rental income1,219 1,945 8,261 13,059 
Straight-line rental income receivable write-offs— (157)(17,068)(25,370)
Above/below market lease amortization1,569 1,091 6,299 5,076 
Above/below market lease intangible write-offs— (18,588)326 (18,588)
Operating expense recoveries4,029 3,869 17,735 18,036 
Rental and related revenues$103,318 $87,183 $400,586 $396,716 


logo2.jpg See reporting definitions.                        4



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Senior Housing - Managed Revenues
(in thousands)

Three Months Ended
 December 31, 2022September 30, 2022June 30, 2022March 31, 2022December 31, 2021
Revenues: (1)
Resident fees and services$52,699 $47,337 $43,731 $41,798 $40,089 
Resident fees and services not included in same store(7,982)(4,257)(1,250)(911)— 
Same store resident fees and services$44,717 $43,080 $42,481 $40,887 $40,089 








































(1)    Revenues have been adjusted for changes in the foreign currency exchange rate where applicable.
logo2.jpg See reporting definitions.                        5



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Property Type
(in thousands)
Three Months Ended December 31, 2022
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed Consolidated
Senior Housing - Managed Unconsolidated (1)
Total Senior HousingOtherCorporateTotal
Net income (loss)$14,536 $5,623 $3,020 $(88,317)$(79,674)$6,594 $3,232 $8,968 $(38,604)$(84,948)
Adjustments:
Depreciation and amortization29,289 5,476 10,524 — 16,000 3,155 1,461 — 22 49,927 
Interest212 230 — — 230 — — — 27,456 27,898 
General and administrative— — — — — — — — 10,853 10,853 
Provision for loan losses and other reserves— — — — — — — — 153 153 
Impairment of real estate21,440 — — — — — — — — 21,440 
Other income— — — — — — — — (4)(4)
Net loss (gain) on sales of real estate7,519 (89)— — (89)— — — — 7,430 
Loss from unconsolidated JV— — — 88,317 88,317 — — — — 88,317 
Income tax expense— — — — — — — — 124 124 
Sabra’s share of unconsolidated JV Net Operating Income— — — 464 464 — — — — 464 
Net Operating Income$72,996 $11,240 $13,544 $464 $25,248 $9,749 $4,693 $8,968 $— $121,654 
Non-cash revenue and expense adjustments(1,998)(293)— — (293)(296)(175)(602)— (3,364)
Cash Net Operating Income$70,998 $10,947 $13,544 $464 $24,955 $9,453 $4,518 $8,366 $— $118,290 
Cash Net Operating Income not included in same store(610)(351)(1,512)(464)(2,327)13 (5)
Same store Cash Net Operating Income$70,388 $10,596 $12,032 $— $22,628 $9,466 $4,513 












(1)    Net Operating Income and Cash Net Operating Income include $0.1 million of Grant Income.
logo2.jpg         See reporting definitions.                                  6

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Property Type
(in thousands)
Three Months Ended September 30, 2022
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed Consolidated
Senior Housing - Managed Unconsolidated (1)
Total Senior HousingOtherCorporateTotal
Net (loss) income$(33,921)$4,602 $677 $(4,384)$895 $6,639 $3,213 $8,940 $(35,830)$(50,064)
Adjustments:
Depreciation and amortization27,586 5,068 10,228 — 15,296 3,062 1,461 — 22 47,427 
Interest214 233 — — 233 — — — 26,624 27,071 
General and administrative— — — — — — — — 9,676 9,676 
Recovery of loan losses and other reserves— — — — — — — — (217)(217)
Impairment of real estate60,857 — — — — — — — — 60,857 
Loss on extinguishment of debt— — — — — — — — 140 140 
Other income— — — — — — — — (994)(994)
Net loss on sales of real estate80 — — — — — — — — 80 
Loss from unconsolidated JV— — — 4,384 4,384 — — — — 4,384 
Income tax expense— — — — — — — — 579 579 
Sabra’s share of unconsolidated JV Net Operating Income— — — 4,160 4,160 — — — — 4,160 
Net Operating Income$54,816 $9,903 $10,905 $4,160 $24,968 $9,701 $4,674 $8,940 $— $103,099 
Non-cash revenue and expense adjustments13,304 263 — — 263 (304)(210)(589)— 12,464 
Foreign exchange rate adjustment— — (92)— (92)— — — — (92)
Cash Net Operating Income$68,120 $10,166 $10,813 $4,160 $25,139 $9,397 $4,464 $8,351 $— $115,471 
Cash Net Operating Income not included in same store(1,691)(71)(1,024)(4,160)(5,255)(10)(8)
Same store Cash Net Operating Income$66,429 $10,095 $9,789 $— $19,884 $9,387 $4,456 










(1)    Net Operating Income and Cash Net Operating Income include $0.1 million of Grant Income.
logo2.jpg         See reporting definitions.                                  7

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Property Type
(in thousands)
Three Months Ended June 30, 2022
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - Leased
Senior Housing - Managed Consolidated (1)
Senior Housing - Managed Unconsolidated (2)
Total Senior HousingOtherCorporateTotal
Net income (loss)$32,201 $3,742 $820 $(2,529)$2,033 $6,609 $3,207 $8,653 $(35,898)$16,805 
Adjustments:
Depreciation and amortization26,214 5,246 9,290 — 14,536 2,939 1,461 — 22 45,172 
Interest216 235 — — 235 — — — 25,079 25,530 
General and administrative— — — — — — — — 8,649 8,649 
Recovery of loan losses and other reserves— — — — — — — — (270)(270)
Impairment of real estate11,745 — — — — — — — — 11,745 
Other expense— — — — — — — — 2,163 2,163 
Net loss on sales of real estate2,615 1,886 — — 1,886 — — — — 4,501 
Loss from unconsolidated JV— — — 2,529 2,529 — — — — 2,529 
Income tax expense— — — — — — — — 255 255 
Sabra’s share of unconsolidated JV Net Operating Income— — — 5,055 5,055 — — — — 5,055 
Net Operating Income$72,991 $11,109 $10,110 $5,055 $26,274 $9,548 $4,668 $8,653 $— $122,134 
Non-cash revenue and expense adjustments(2,592)(436)— — (436)(319)(216)(547)— (4,110)
Foreign exchange rate adjustment— — (124)— (124)— — — — (124)
Cash Net Operating Income$70,399 $10,673 $9,986 $5,055 $25,714 $9,229 $4,452 $8,106 $— $117,900 
Cash Net Operating Income not included in same store(67)
Same store Cash Net Operating Income$9,919 









(1)    Net Operating Income, Cash Net Operating Income and Same store Cash Net Operating Income include $0.1 million of Grant Income
(2)    Net Operating Income and Cash Net Operating Income include $3.4 million of Grant Income.
logo2.jpg         See reporting definitions.                                  8

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Property Type
(in thousands)
Three Months Ended March 31, 2022
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed ConsolidatedSenior Housing - Managed UnconsolidatedTotal Senior HousingOtherCorporateTotal
Net income (loss)$51,927 $6,797 $(93)$(2,802)$3,902 $6,314 $3,224 $10,992 $(35,757)$40,602 
Adjustments:
Depreciation and amortization26,303 5,340 9,216 — 14,556 2,917 1,460 — 20 45,256 
Interest217 376 — — 376 — — — 24,379 24,972 
General and administrative— — — — — — — — 10,396 10,396 
Provision for loan losses and other reserves— — — — — — — — 475 475 
Loss on extinguishment of debt— — — — — — — — 271 271 
Other income— — — — — — — — (68)(68)
Loss from unconsolidated JV— — — 2,802 2,802 — — — — 2,802 
Income tax expense— — — — — — — — 284 284 
Sabra’s share of unconsolidated JV Net Operating Income— — — 3,543 3,543 — — — — 3,543 
Net Operating Income$78,447 $12,513 $9,123 $3,543 $25,179 $9,231 $4,684 $10,992 $— $128,533 
Non-cash revenue and expense adjustments(2,947)(935)— — (935)(342)(228)(547)— (4,999)
Foreign exchange rate adjustment— — (124)— (124)— — — — (124)
Cash Net Operating Income$75,500 $11,578 $8,999 $3,543 $24,120 $8,889 $4,456 $10,445 $— $123,410 
Cash Net Operating Income not included in same store(184)
Same store Cash Net Operating Income$8,815 










logo2.jpg         See reporting definitions.                                  9

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Property Type
(in thousands)
Three Months Ended December 31, 2021
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed ConsolidatedSenior Housing - Managed UnconsolidatedTotal Senior HousingOtherCorporateTotal
Net income (loss)$26,649 $9,213 $(626)$(13,264)$(4,677)$7,354 $7,135 $7,940 $(68,754)$(24,353)
Adjustments:
Depreciation and amortization26,302 5,353 8,787 — 14,140 3,124 1,494 — 19 45,079 
Interest229 400 — — 400 — — — 25,047 25,676 
General and administrative— — — — — — — — 8,237 8,237 
Provision for loan losses and other reserves— — — — — — — — 2,045 2,045 
Impairment of real estate9,004 — — — — — — — 9,004 
Loss on extinguishment of debt— — — — — — — — 32,862 32,862 
Other expense— — — — — — — — 13 13 
Net gain on sales of real estate(7,153)(2,287)— — (2,287)(816)(3,829)— — (14,085)
Loss from unconsolidated JV— — — 13,264 13,264 — — — — 13,264 
Income tax expense— — — — — — — — 531 531 
Sabra’s share of unconsolidated JV Net Operating Income— — — (4,240)(4,240)— — — — (4,240)
Net Operating Income$55,031 $12,679 $8,161 $(4,240)$16,600 $9,662 $4,800 $7,940 $— $94,033 
Non-cash revenue and expense adjustments16,695 (582)— — (582)(140)(240)(544)— 15,189 
Foreign exchange rate adjustment— — (122)— (122)— — — — (122)
Cash Net Operating Income$71,726 $12,097 $8,039 $(4,240)$15,896 $9,522 $4,560 $7,396 $— $109,100 
Cash Net Operating Income not included in same store— 
Same store Cash Net Operating Income$8,039 










logo2.jpg         See reporting definitions.                                  10

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Property Type
(in thousands)
Year Ended December 31, 2022
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - Leased
Senior Housing - Managed Consolidated (1)
Senior Housing - Managed Unconsolidated (2)
Total Senior HousingOtherCorporateTotal
Net income (loss)$64,743 $20,764 $4,424 $(98,032)$(72,844)$26,156 $12,876 $37,553 $(146,089)$(77,605)
Adjustments:
Depreciation and amortization109,392 21,130 39,258 — 60,388 12,073 5,843 — 86 187,782 
Interest859 1,074 — — 1,074 — — — 103,538 105,471 
General and administrative— — — — — — — — 39,574 39,574 
Provision for loan losses and other reserves— — — — — — — — 141 141 
Impairment of real estate94,042 — — — — — — — — 94,042 
Loss on extinguishment of debt— — — — — — — — 411 411 
Other expense— — — — — — — — 1,097 1,097 
Net loss on sales of real estate10,214 1,797 — — 1,797 — — — — 12,011 
Loss from unconsolidated JV— — — 98,032 98,032 — — — — 98,032 
Income tax expense— — — — — — — — 1,242 1,242 
Sabra’s share of unconsolidated JV Net Operating Income— — — 13,222 13,222 — — — — 13,222 
Net Operating Income$279,250 $44,765 $43,682 $13,222 $101,669 $38,229 $18,719 $37,553 $— $475,420 
Non-cash revenue and expense adjustments5,768 (1,400)— — (1,400)(1,262)(830)(2,285)— (9)
Cash Net Operating Income$285,018 $43,365 $43,682 $13,222 $100,269 $36,967 $17,889 $35,268 $— $475,411 
Annualizing adjustments (3)
(20,685)(777)11,520 (7,367)3,376 (174)389 (2,110)— (19,204)
Annualized Cash Net Operating Income$264,333 $42,588 $55,202 $5,855 $103,645 $36,793 $18,278 $33,158 $— $456,207 
Reallocation adjustments (4)
804 4,686 — — 4,686 24,426 — (29,916)— — 
Annualized Cash Net Operating Income, as adjusted$265,137 $47,274 $55,202 $5,855 $108,331 $61,219 $18,278 $3,242 $— $456,207 


(1)    Net Operating Income and Cash Net Operating Income include $0.1 million of Grant Income.
(2)    Net Operating Income and Cash Net Operating Income include $3.6 million of Grant Income.
(3)    Represents the annual effect of acquisitions, dispositions, lease modifications and scheduled rent increases completed during the period and mathematical adjustments needed to make Cash Net Operating Income for the period representative of Cash Net Operating Income for a full year. Annualizing adjustments also include the removal of triple-net operating expenses (net of recoveries), the Enlivant Joint Venture Cash NOI and the residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis, as well as adjustments to reflect the reduction in Avamere's annual base rent effective February 1, 2022 and the February 1, 2023 transition of our North American portfolio to Ensign and Avamere.
(4)    Adjustments to reflect Annualized Cash Net Operating Income from sales-type lease, mortgage and construction loans receivable and preferred equity investments in the related asset class of the underlying real estate.
logo2.jpg         See reporting definitions.                                  11

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Payor Source
(in thousands)
Year Ended December 31, 2022
Private Payors (1)
Non-Private PayorsOther
Senior Housing - Managed Unconsolidated (2)
CorporateTotal
Net income (loss)$63,345 $64,266 $37,553 $(96,680)$(146,089)$(77,605)
Adjustments:
Depreciation and amortization89,140 98,556 — — 86 187,782 
Interest1,151 782 — — 103,538 105,471 
General and administrative— — — — 39,574 39,574 
Provision for loan losses and other reserves— — — — 141 141 
Impairment of real estate11,121 82,921 — — — 94,042 
Loss on extinguishment of debt— — — — 411 411 
Other expense— — — — 1,097 1,097 
Net loss on sales of real estate3,595 8,416 — — — 12,011 
Loss from unconsolidated JV1,352 — — 96,680 — 98,032 
Income tax expense— — — — 1,242 1,242 
Sabra’s share of unconsolidated JV Net Operating Income3,172 — — 10,050 — 13,222 
Net Operating Income$172,876 $254,941 $37,553 $10,050 $— $475,420 
Non-cash revenue and expense adjustments(1,982)4,258 (2,285)— — (9)
Cash Net Operating Income$170,894 $259,199 $35,268 $10,050 $— $475,411 
Annualizing adjustments (3)
9,772 (16,816)(2,110)(10,050)— (19,204)
Annualized Cash Net Operating Income$180,666 $242,383 $33,158 $— $— $456,207 






(1)    Net Operating Income and Cash Net Operating Income include $0.1 million of Grant Income.
(2)    Reflects our Enlivant unconsolidated joint venture which consists of 157 facilities and 6,996 units. Net Operating Income and Cash Net Operating Income include $3.6 million of Grant Income.
(3)    Represents the annual effect of acquisitions, dispositions, lease modifications and scheduled rent increases completed during the period and mathematical adjustments needed to make Cash Net Operating Income for the period representative of Cash Net Operating Income for a full year. Annualizing adjustments also include the removal of triple-net operating expenses (net of recoveries), the Enlivant Joint Venture Cash NOI and the residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis, as well as an adjustment to reflect the reduction in Avamere's annual base rent effective February 1, 2022 and the February 1, 2023 transition of our North American portfolio to Ensign and Avamere.
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SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Relationship
(in thousands)
Year Ended December 31, 2022
Signature HealthcareThe Ensign GroupAvamere Family of CompaniesSignature BehavioralHoliday AL Holdings LPRecovery Centers of AmericaCadia HealthcareLeo Brown GroupThe McGuire GroupCommuniCare
All Other Relationships (1)
CorporateTotal
Net income (loss)$25,216 $12,237 $24,039 $23,164 $3,703 $23,029 $(68,616)$8,644 $13,972 $8,201 $(5,105)$(146,089)$(77,605)
Adjustments:
Depreciation and amortization14,365 18,024 12,737 8,969 20,152 1,211 10,244 8,064 7,127 4,475 82,328 86 187,782 
Interest— — — — — — — 494 — — 1,439 103,538 105,471 
General and administrative— — — — — — — — — — — 39,574 39,574 
Provision for loan losses and other reserves— — — — — — — — — — — 141 141 
Impairment of real estate— — — — — — 79,236 — — 3,061 11,745 — 94,042 
Loss on extinguishment of debt— — — — — — — — — — — 411 411 
Other expense— — — — — — — — — — — 1,097 1,097 
Net (gain) loss on sales of real estate— — — — — — — — — (15)12,026 — 12,011 
Loss from unconsolidated JV— — — — — — — — — — 98,032 — 98,032 
Income tax expense— — — — — — — — — — — 1,242 1,242 
Sabra’s share of unconsolidated JV Net Operating Income— — — — — — — — — — 13,222 — 13,222 
Net Operating Income$39,581 $30,261 $36,776 $32,133 $23,855 $24,240 $20,864 $17,202 $21,099 $15,722 $213,687 $— $475,420 
Non-cash revenue and expense adjustments8 12,210 2,267 (1,072)— (231)(823)(1,498)(4,530)595 (6,935)— (9)
Cash Net Operating Income$39,589 $42,471 $39,043 $31,061 $23,855 $24,009 $20,041 $15,704 $16,569 $16,317 $206,752 $— $475,411 
Annualizing adjustments (2)
594 (3,817)(5,163)254 3,627 629 807 1,847 247 181 (18,410)— (19,204)
Annualized Cash Net Operating Income$40,183 $38,654 $33,880 $31,315 $27,482 $24,638 $20,848 $17,551 $16,816 $16,498 $188,342 $— $456,207 






(1)    Net Operating Income and Cash Net Operating Income include $3.6 million of Grant Income.
(2)    Represents the annual effect of acquisitions, dispositions, lease modifications and scheduled rent increases completed during the period and mathematical adjustments needed to make Cash Net Operating Income for the period representative of Cash Net Operating Income for a full year. Annualizing adjustments also include the removal of triple-net operating expenses (net of recoveries), the Enlivant Joint Venture Cash NOI and the residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis, as well as an adjustment to reflect the reduction in Avamere's annual base rent effective February 1, 2022 and the February 1, 2023 transition of our North American portfolio to Ensign and Avamere.
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SABRA HEALTH CARE REIT, INC.
REPORTING DEFINITIONS
Adjusted EBITDA. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company's long-term equity award program, and loan loss reserves. Adjusted EBITDA is an important non-GAAP supplemental measure of operating performance.
Annualized Cash Net Operating Income (“Annualized Cash NOI”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Annualized Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Annualized Cash NOI as Annualized Revenues less operating expenses and non-cash revenues and expenses. Annualized Cash NOI excludes all other financial statement amounts included in net income.
Annualized Revenues. The annual contractual rental revenues under leases and interest and other income generated by the Company’s loans receivable and other investments based on amounts invested and applicable terms as of the end of the period presented. Annualized Revenues do not include tenant recoveries or additional rents and are adjusted to (i) reflect actual payments received related to the twelve months ended at the end of the respective period for leases no longer accounted for on an accrual basis, (ii) exclude residual rents due to Sabra from prior asset sales under the Company’s 2017 memorandum of understanding with Genesis and (iii) reflect the reduction in Avamere’s annual base rent effective February 1, 2022.
Behavioral Health. Includes behavioral hospitals that provide inpatient and outpatient care for patients with mental health conditions, chemical dependence or substance addictions and addiction treatment centers that provide treatment services for chemical dependence and substance addictions, which may include inpatient care, outpatient care, medical detoxification, therapy and counseling.
Cash Net Operating Income (“Cash NOI”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Cash NOI as total revenues less operating expenses and non-cash revenues and expenses. Cash NOI excludes all other financial statement amounts included in net income.
Consolidated Debt. The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements.
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 the Company’s operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and the Company’s share of gains or losses from real estate dispositions related to its unconsolidated joint ventures, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus the Company’s share of depreciation and amortization related to its unconsolidated joint ventures, and real estate impairment charges of both consolidated and unconsolidated entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. AFFO is defined as FFO excluding merger and acquisition costs, stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including ineffectiveness gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and the Company’s share of non-cash adjustments related to its unconsolidated joint ventures. The Company believes that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of the Company’s operating results among investors and makes comparisons of operating results among real estate investment trusts more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of real estate investment trusts, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO and AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than the Company does.
Grant Income. Grant Income consists of funds specifically paid to communities in our Senior Housing - Managed portfolio from state or federal governments related to the pandemic and were incremental to the amounts that would have otherwise been received for providing care to residents.
Net Debt. The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements, net of cash and cash equivalents as reported in the Company’s consolidated financial statements.
Net Debt to Adjusted EBITDA. Net Debt to Adjusted EBITDA is calculated as Net Debt divided by Annualized Adjusted EBITDA, which is Adjusted EBITDA, as adjusted for annualizing adjustments that give effect to the acquisitions and dispositions completed during the respective period as though such acquisitions and dispositions were completed as of the beginning of the period presented.
Net Operating Income (“NOI”). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines NOI as total revenues less operating expenses. NOI excludes all other financial statement amounts included in net income.
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SABRA HEALTH CARE REIT, INC.
REPORTING DEFINITIONS
Normalized FFO and Normalized AFFO. Normalized FFO and Normalized AFFO represent FFO and AFFO, respectively, adjusted for certain income and expense items that the Company does not believe are indicative of its ongoing operating results. The Company considers Normalized FFO and Normalized AFFO to be useful measures to evaluate the Company’s operating results excluding these income and expense items to help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized FFO and Normalized AFFO do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. Normalized FFO and Normalized AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of Normalized FFO and Normalized AFFO may not be comparable to Normalized FFO and Normalized AFFO reported by other 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 FFO and AFFO or Normalized FFO and Normalized AFFO differently than the Company does.
Senior Housing. Senior Housing communities include independent living, assisted living, continuing care retirement and memory care communities.
Senior Housing - Managed. Senior Housing communities operated by third-party property managers pursuant to property management agreements.
Skilled Nursing/Transitional Care. Skilled Nursing/Transitional Care facilities include skilled nursing, transitional care, multi-license designation and mental health facilities.
Specialty Hospitals and Other. Includes acute care, long-term acute care and rehabilitation hospitals, facilities that provide residential services, which may include assistance with activities of daily living, and other facilities not classified as Skilled Nursing/Transitional Care, Senior Housing or Behavioral Health.
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