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Published: 2020-11-05 16:07:11 ET
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EX-99.3 4 sbraex9932020q3.htm Q3 2020 NON-GAAP RECONCILIATIONS Document

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Reconciliations of Non-GAAP Financial Measures

September 30, 2020

(Unaudited)



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
FFO, Normalized FFO, AFFO and Normalized AFFO
(dollars in thousands, except per share data) 
Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Net income attributable to common stockholders$36,460 $23,282 $101,300 $29,255 
Add:
Depreciation and amortization of real estate assets44,209 43,092 132,579 137,517 
Depreciation and amortization of real estate assets related to noncontrolling interest— (14)— (93)
Depreciation and amortization of real estate assets related to unconsolidated joint venture10,391 5,439 21,525 16,102 
Net (gain) loss on sales of real estate(2,715)19 (2,828)(1,216)
Net (gain) loss on sales of real estate related to unconsolidated joint venture(7,537)— 3,271 1,690 
Impairment of real estate3,154 13,966 3,154 119,102 
FFO attributable to common stockholders$83,962 $85,784 $259,001 $302,357 
Write-offs of straight-line rental income receivable and lease intangibles14,522 1,460 21,200 7,326 
Lease termination income(300)— (300)(66,948)
Loss on extinguishment of debt139 644 531 10,763 
Provision for doubtful accounts and loan losses, net(90)57 706 1,457 
Other normalizing items (1)
589 2,163 (1,197)5,216 
Normalized FFO attributable to common stockholders$98,822 $90,108 $279,941 $260,171 
FFO attributable to common stockholders$83,962 $85,784 $259,001 $302,357 
Merger and acquisition costs5 130 433 192 
Stock-based compensation expense916 3,259 5,651 8,829 
Non-cash rental and related revenues7,907 (4,958)1,340 (12,965)
Non-cash interest income(608)(555)(1,743)(1,680)
Non-cash interest expense2,069 2,523 6,527 7,846 
Non-cash portion of loss on extinguishment of debt139 642 531 3,866 
Provision for loan losses and other reserves(90)57 706 1,457 
Non-cash lease termination income— — — (9,725)
Other non-cash adjustments related to unconsolidated joint venture394 777 1,337 2,923 
Other non-cash adjustments110 (3)137 95 
AFFO attributable to common stockholders$94,804 $87,656 $273,920 $303,195 
Cash portion of lease termination income(300)— (300)(57,223)
Cash portion of loss on extinguishment of debt— 2 — 6,897 
Other normalizing items (1)
567 2,050 (1,259)5,067 
Normalized AFFO attributable to common stockholders$95,071 $89,708 $272,361 $257,936 
Amounts per diluted common share attributable to common stockholders:
Net income $0.18 $0.12 $0.49 $0.16 
FFO$0.41 $0.45 $1.25 $1.64 
Normalized FFO$0.48 $0.47 $1.36 $1.41 
AFFO$0.46 $0.46 $1.32 $1.63 
Normalized AFFO$0.46 $0.47 $1.31 $1.39 
Weighted average number of common shares outstanding, diluted:
Net income, FFO and Normalized FFO 206,727,167 191,952,389 206,442,674 184,698,411 
AFFO and Normalized AFFO 207,523,386 192,590,320 207,288,178 185,480,674 




(1)     FFO and AFFO for the nine months ended September 30, 2020 includes $2.3 million earned during the period related to legacy Care Capital Properties, Inc. investments. In addition, other normalizing items for FFO and AFFO include triple-net operating expenses, net of recoveries.
sabralogo211a.jpg
See reporting definitions.
2



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
EBITDA, Adjusted EBITDA, Annualized Adjusted EBITDA, and Annualized Adjusted EBITDA, As Adjusted
(in thousands) 
Trailing Twelve Months EndedYear Ended
September 30, 2020December 31, 2019
Net income attributable to Sabra Health Care REIT, Inc.$141,041 $68,996 
Interest103,329 126,610 
Income tax expense2,447 3,402 
Depreciation and amortization176,611 181,549 
EBITDA$423,428 $380,557 
Loss from unconsolidated joint venture14,198 6,796 
Distributions from unconsolidated joint venture15,021 13,865 
Stock-based compensation expense 6,641 9,819 
Merger and acquisition costs665 424 
CCP transition costs94 197 
Provision for loan losses and other reserves487 1,238 
Impairment of real estate5,871 121,819 
Loss on extinguishment of debt6,108 16,340 
Other (income) loss(3,830)2,482 
Lease termination income(1,154)(67,802)
Net gain on sales of real estate(3,912)(2,300)
Adjusted EBITDA (1)
$463,617 $483,435 
Annualizing adjustments (2)
24,875 2,640 
Annualized Adjusted EBITDA (3)
$488,492 $486,075 
Adjustment for:
Distributions from unconsolidated joint venture(15,021)(13,865)
EBITDA from unconsolidated joint venture (4)
32,398 39,132 
Annualized Adjusted EBITDA, as adjusted (5)
$505,869 $511,342 


















(1)    Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company’s long-term equity award program and loan loss reserves.
(2)    Annualizing adjustments give effect to the acquisitions and dispositions completed during the twelve months ended for the respective period as though such acquisitions and dispositions were completed as of the beginning of the period.
(3)    Annualized Adjusted EBITDA is calculated as Adjusted EBITDA as adjusted to give effect to the adjustments described in footnote 2 above.
(4)    Represents Sabra’s pro rata share of unconsolidated joint venture EBITDA.
(5)    Annualized Adjusted EBITDA, as adjusted is used in the calculation of Net Debt to Adjusted EBITDA - Including Unconsolidated Joint Venture.
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3



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Income
Supplemental Information
(in thousands) 
Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Cash rental income$103,519 $101,138 $305,478 $313,342 
Straight-line rental income4,198 4,817 13,649 15,527 
Straight-line rental income receivable write-offs(10,409)(1,460)(13,750)(1,460)
Above/below market lease amortization2,196 1,601 5,823 4,803 
Above/below market lease intangible write-offs(3,894)— (7,063)(5,905)
Recoveries5,002 4,008 15,714 12,984 
Rental and related revenues$100,612 $110,104 $319,851 $339,291 


sabralogo211a.jpg
See reporting definitions.
4



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands) 
Three Months Ended September 30, 2020
Skilled Nursing/ Transitional CareSenior HousingSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed (Wholly-Owned)Senior Housing - Managed (Unconsolidated JV)Total Senior HousingInterest and Other IncomeCorporateTotal
Net income (loss)$44,845 $2,777 $3,708 $2,766 $9,251 $10,179 $3,299 $(31,114)$36,460 
Adjustments:
Depreciation and amortization26,452 5,328 7,888 — 13,216 4,524 — 17 44,209 
Interest399 420 — — 420 — — 24,085 24,904 
General and administrative— — — — — — — 7,216 7,216 
Recovery of loan losses and other reserves— — — — — — — (90)(90)
Impairment of real estate551 2,603 — — 2,603 — — — 3,154 
Loss on extinguishment of debt— — — — — — — 139 139 
Other income— — — — — — — (115)(115)
Net gain on sales of real estate(2,715)— — — — — — — (2,715)
Income from unconsolidated JV— — — (2,766)(2,766)— — — (2,766)
Income tax benefit— — — — — — — (138)(138)
Sabra’s share of unconsolidated JV Net Operating Income— — — 9,034 9,034 — — — 9,034 
Net Operating Income (1)
$69,532 $11,128 $11,596 $9,034 $31,758 $14,703 $3,299 $— $119,292 
Non-cash revenue and expense adjustments8,515 847 — — 847 (1,426)(608)— 7,328 
Cash Net Operating Income (1)
$78,047 $11,975 $11,596 $9,034 $32,605 $13,277 $2,691 $— $126,620 
Cash Net Operating Income not included in same store(655)5 (988)24 (959)(106)
Same store Cash Net Operating Income (2)
$77,392 $11,980 $10,608 $9,058 $31,646 $13,171 






(1)    Includes (i) $1.2 million and $3.0 million of government grant income under The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, and (ii) $1.2 million and $1.3 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
(2)    Includes (i) $1.0 million and $3.0 million of government grant income under the CARES Act for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, and (ii) $1.0 million and $1.3 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
sabralogo211a.jpg
See reporting definitions.
5



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands) 
Three Months Ended June 30, 2020
Skilled Nursing/ Transitional CareSenior HousingSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed (Wholly-Owned)Senior Housing - Managed (Unconsolidated JV)Total Senior HousingInterest and Other IncomeCorporateTotal
Net income (loss)$52,793 $7,673 $2,841 $(12,136)$(1,622)$9,940 $2,606 $(34,094)$29,623 
Adjustments:
Depreciation and amortization26,598 5,412 7,773 — 13,185 4,403 — 16 44,202 
Interest488 419 — — 419 — — 24,385 25,292 
General and administrative— — — — — — — 8,673 8,673 
Provision for loan losses and other reserves— — — — — — — 129 129 
Loss on extinguishment of debt— — — — — — — 392 392 
Other expense— — — — — — — 66 66 
Net gain on sales of real estate(330)— — — — — — — (330)
Loss from unconsolidated JV— — — 12,136 12,136 — — — 12,136 
Income tax expense— — — — — — — 433 433 
Sabra’s share of unconsolidated JV Net Operating Income— — — 6,305 6,305 — — — 6,305 
Net Operating Income (1)
$79,549 $13,504 $10,614 $6,305 $30,423 $14,343 $2,606 $— $126,921 
Non-cash revenue and expense adjustments(4,538)(458)— — (458)(1,179)(574)— (6,749)
Foreign exchange rate adjustment— — 60 — 60 — — — 60 
Cash Net Operating Income (1)
$75,011 $13,046 $10,674 $6,305 $30,025 $13,164 $2,032 $— $120,232 
Cash Net Operating Income not included in same store(895)(142)(970)292 (820)(60)
Same store Cash Net Operating Income (2)
$74,116 $12,904 $9,704 $6,597 $29,205 $13,104 







(1)    Includes $1.7 million and $2.3 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
(2)    Includes $1.5 million and $2.2 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
sabralogo211a.jpg
See reporting definitions.
6



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands) 
Three Months Ended March 31, 2020
Skilled Nursing/ Transitional CareSenior HousingSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed (Wholly-Owned)Senior Housing - Managed (Unconsolidated JV)Total Senior HousingInterest and Other IncomeCorporateTotal
Net income (loss)$46,897 $7,120 $4,971 $(3,667)$8,424 $9,887 $2,851 $(32,842)$35,217 
Adjustments:
Depreciation and amortization26,916 5,085 7,751 — 12,836 4,401 — 15 44,168 
Interest660 428 — — 428 — — 24,616 25,704 
General and administrative— — — — — — — 8,761 8,761 
Provision for loan losses and other reserves— — — — — — — 667 667 
Other income— — — — — — — (2,259)(2,259)
Net loss on sales of real estate217 — — — — — — — 217 
Loss from unconsolidated JV— — — 3,667 3,667 — — — 3,667 
Income tax expense— — — — — — — 1,042 1,042 
Sabra’s share of unconsolidated JV Net Operating Income— — — 8,370 8,370 — — — 8,370 
Net Operating Income (1)
$74,690 $12,633 $12,722 $8,370 $33,725 $14,288 $2,851 $— $125,554 
Non-cash revenue and expense adjustments1,546 (662)— — (662)(1,219)(561)— (896)
Foreign exchange rate adjustment— — 16 — 16 — — — 16 
Cash Net Operating Income (1)
$76,236 $11,971 $12,738 $8,370 $33,079 $13,069 $2,290 $— $124,674 
Cash Net Operating Income not included in same store(1,068)171 
Same store Cash Net Operating Income (1)
$11,670 $8,541 











(1)    Includes $0.3 million and $0.5 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
sabralogo211a.jpg
See reporting definitions.
7



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands) 
Three Months Ended December 31, 2019
Skilled Nursing/ Transitional CareSenior HousingSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed (Wholly-Owned)Senior Housing - Managed (Unconsolidated JV)Total Senior HousingInterest and Other IncomeCorporateTotal
Net income (loss)$52,311 $5,649 $5,515 $(1,161)$10,003 $10,059 $4,395 $(37,027)$39,741 
Adjustments:
Depreciation and amortization27,725 4,901 7,007 — 11,908 4,384 — 15 44,032 
Interest665 445 — — 445 — — 26,319 27,429 
General and administrative— — — — — — — 5,934 5,934 
Recovery of loan losses and other reserves— — — — — — — (219)(219)
Impairment of real estate2,717 — — — — — — — 2,717 
Loss on extinguishment of debt— — — — — — — 5,577 5,577 
Other income— — — — — — — (1,709)(1,709)
Net gain on sales of real estate(1,084)— — — — — — — (1,084)
Loss from unconsolidated JV— — — 1,161 1,161 — — — 1,161 
Income tax expense— — — — — — — 1,110 1,110 
Sabra’s share of unconsolidated JV Net Operating Income— — — 10,089 10,089 — — — 10,089 
Net Operating Income$82,334 $10,995 $12,522 $10,089 $33,606 $14,443 $4,395 $— $134,778 
Non-cash revenue and expense adjustments(4,745)(524)— — (524)(1,187)(1,386)— (7,842)
Foreign exchange rate adjustment— — (21)— (21)— — — (21)
Cash Net Operating Income$77,589 $10,471 $12,501 $10,089 $33,061 $13,256 $3,009 $— $126,915 
Cash Net Operating Income not included in same store(230)190 
Same store Cash Net Operating Income$12,271 $10,279 
sabralogo211a.jpg
See reporting definitions.
8



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands) 
Three Months Ended September 30, 2019
Skilled Nursing/ Transitional CareSenior HousingSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed (Wholly-Owned)Senior Housing - Managed (Unconsolidated JV)Total Senior HousingInterest and Other IncomeCorporateTotal
Net income (loss)$48,511 $(5,139)$5,719 $(605)$(25)$9,648 $3,325 $(38,173)$23,286 
Adjustments:
Depreciation and amortization27,332 4,717 6,707 — 11,424 4,325 — 11 43,092 
Interest669 445 — — 445 — — 28,141 29,255 
General and administrative— — — — — — — 8,709 8,709 
Provision for loan losses and other reserves— — — — — — — 57 57 
Impairment of real estate3,131 10,835 — — 10,835 — — — 13,966 
Loss on extinguishment of debt— — — — — — — 644 644 
Other income— — — — — — — (215)(215)
Net loss on sales of real estate19 — — — — — — — 19 
Loss from unconsolidated JV— — — 605 605 — — — 605 
Income tax expense— — — — — — — 826 826 
Sabra’s share of unconsolidated JV Net Operating Income— — — 10,115 10,115 — — — 10,115 
Net Operating Income$79,662 $10,858 $12,426 $10,115 $33,399 $13,973 $3,325 $— $130,359 
Non-cash revenue and expense adjustments(3,137)(614)— — (614)(1,175)(555)— (5,481)
Foreign exchange rate adjustment— — (21)— (21)— — — (21)
Cash Net Operating Income$76,525 $10,244 $12,405 $10,115 $32,764 $12,798 $2,770 $— $124,857 
Cash Net Operating Income not included in same store— 69 
Same store Cash Net Operating Income$12,405 $10,184 

sabralogo211a.jpg
See reporting definitions.
9



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Cash NOI by Facility Type
(in thousands) 
Nine Months Ended September 30, 2020
Skilled Nursing/ Transitional CareSenior HousingSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed (Wholly-Owned)Senior Housing - Managed (Unconsolidated JV)Total Senior HousingInterest and Other IncomeCorporateTotal
Net income (loss)$144,535 $17,570 $11,520 $(13,037)$16,053 $30,006 $8,756 $(98,050)$101,300 
Adjustments:
Depreciation and amortization79,966 15,825 23,412 — 39,237 13,328 — 48 132,579 
Interest1,547 1,267 — — 1,267 — — 73,086 75,900 
General and administrative— — — — — — — 24,650 24,650 
Provision for loan losses and other reserves— — — — — — — 706 706 
Impairment of real estate551 2,603 — — 2,603 — — — 3,154 
Loss on extinguishment of debt— — — — — — — 531 531 
Other income— — — — — — — (2,308)(2,308)
Net gain on sales of real estate(2,828)— — — — — — — (2,828)
Loss from unconsolidated JV— — — 13,037 13,037 — — — 13,037 
Income tax expense— — — — — — — 1,337 1,337 
Sabra’s share of unconsolidated JV Net Operating Income— — — 23,709 23,709 — — — 23,709 
Net Operating Income (1)
$223,771 $37,265 $34,932 $23,709 $95,906 $43,334 $8,756 $— $371,767 
Non-cash revenue and expense adjustments5,523 (273)— — (273)(3,824)(1,743)— (317)
Cash Net Operating Income (1)
$229,294 $36,992 $34,932 $23,709 $95,633 $39,510 $7,013 $— $371,450 
Annualizing adjustments90,715 12,885 11,646 5,629 30,160 13,207 3,099 — 137,181 
Annualized Cash Net Operating Income$320,009 $49,877 $46,578 $29,338 $125,793 $52,717 $10,112 $— $508,631 










(1)    Includes (i) $1.2 million and $3.0 million of government grant income under the CARES Act for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, and (ii) $3.2 million and $4.1 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
sabralogo211a.jpg
See reporting definitions.
10



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Payor Type
(in thousands) 
Nine Months Ended September 30, 2020
Private PayorsNon-Private PayorsInterest and
Other Income		CorporateTotal
Net income (loss)$56,818 $133,776 $8,756 $(98,050)$101,300 
Adjustments:
Depreciation and amortization59,877 72,654 — 48 132,579 
Interest1,498 1,316 — 73,086 75,900 
General and administrative— — — 24,650 24,650 
Provision for loan losses and other reserves— — — 706 706 
Impairment of real estate2,725 429 — — 3,154 
Loss on extinguishment of debt— — — 531 531 
Other income— — — (2,308)(2,308)
Net gain on sales of real estate(355)(2,473)— — (2,828)
Loss from unconsolidated JV13,037 — — — 13,037 
Income tax expense— — — 1,337 1,337 
Sabra’s share of unconsolidated JV Net Operating Income23,709 — — — 23,709 
Net Operating Income (1)
$157,309 $205,702 $8,756 $— $371,767 
Non-cash revenue and expense adjustments(3,658)5,084 (1,743)— (317)
Cash Net Operating Income (1)
$153,651 $210,786 $7,013 $— $371,450 
Annualizing adjustments50,931 83,151 3,099 — 137,181 
Annualized Cash Net Operating Income$204,582 $293,937 $10,112 $— $508,631 











(1)    Includes (i) $1.2 million and $3.0 million of government grant income under the CARES Act for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, and (ii) $3.2 million and $4.1 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
sabralogo211a.jpg
See reporting definitions.
11



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Relationship
(in thousands) 
Nine Months Ended September 30, 2020
Avamere Family of CompaniesEnlivantNorth American HealthcareSignature HealthcareCadia HealthcareSignature BehavioralHoliday AL Holdings LPGenesis Healthcare, Inc.Healthmark GroupThe McGuire GroupAll Other RelationshipsCorporateTotal
Net income (loss)$25,466 $(8,801)$22,028 $2,542 $10,894 $17,685 $6,331 $16,169 $9,533 $10,362 $87,141 $(98,050)$101,300 
Adjustments:
Depreciation and amortization9,138 3,036 8,410 10,903 7,752 7,595 13,857 1,560 3,637 5,345 61,298 48 132,579 
Interest— — — — — — — 1,707 — — 1,107 73,086 75,900 
General and administrative— — — — — — — — — — — 24,650 24,650 
Provision for loan losses and other reserves— — — — — — — — — — — 706 706 
Impairment of real estate— — — — — — — — — — 3,154 — 3,154 
Loss on extinguishment of debt— — — — — — — — — — — 531 531 
Other income— — — — — — — — — — — (2,308)(2,308)
Net loss (gain) on sales of real estate— — — 2,386 — — — (5,428)— — 214 — (2,828)
Loss from unconsolidated JV— 13,037 — — — — — — — — — — 13,037 
Income tax expense— — — — — — — — — — — 1,337 1,337 
Sabra’s share of unconsolidated JV Net Operating Income— 23,709 — — — — — — — — — — 23,709 
Net Operating Income (1)
$34,604 $30,981 $30,438 $15,831 $18,646 $25,280 $20,188 $14,008 $13,170 $15,707 $152,914 $— $371,767 
Non-cash revenue and expense adjustments(2,497)— (2,423)12,136 231 (419)— 3,599 5 (3,881)(7,068)— (317)
Cash Net Operating Income (1)
$32,107 $30,981 $28,015 $27,967 $18,877 $24,861 $20,188 $17,607 $13,175 $11,826 $145,846 $— $371,450 
Annualizing adjustments11,349 7,684 9,400 9,187 17,530 8,625 5,766 4,201 4,236 3,976 55,227 — 137,181 
Annualized Cash Net Operating Income$43,456 $38,665 $37,415 $37,154 $36,407 $33,486 $25,954 $21,808 $17,411 $15,802 $201,073 $— $508,631 



(1)    Includes (i) $1.2 million and $3.0 million of government grant income under the CARES Act for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, and (ii) $3.2 million and $4.1 million of expenses for the Senior Housing - Managed wholly-owned and unconsolidated JV properties, respectively, related to increased supplies and labor needs related to the COVID-19 pandemic.
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See reporting definitions.
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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 attributable to common stockholders as defined by GAAP is the most appropriate earnings measure. The Company considers Annualized Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Annualized Cash NOI as Annualized Revenues less operating expenses, excluding expenses related to the COVID-19 pandemic, 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, additional rents or government grant income and are net of repositioning reserves, if applicable.
Cash Net Operating Income (“Cash NOI”).   The Company believes that net income attributable to common stockholders as defined by GAAP is the most appropriate earnings measure. The Company considers Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Cash NOI as total revenues less operating expenses and non-cash revenues and expenses. Cash NOI excludes all other financial statement amounts included in net income.
Funds From Operations Attributable to Common Stockholders (“FFO”) and Adjusted Funds from Operations Attributable to Common Stockholders (“AFFO”). The Company believes that net income attributable to common stockholders as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations attributable to common stockholders, or FFO, as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“Nareit”), and adjusted funds from operations attributable to common stockholders, or AFFO (and related per share amounts) are important non-GAAP supplemental measures of the Company’s operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income attributable to common stockholders, as defined by GAAP. FFO is defined as net income attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and the Company’s share of gains or losses from real estate dispositions related to its unconsolidated joint venture, 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 venture, and real estate impairment charges. 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 venture. The Company believes that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of the Company’s operating results among investors and makes comparisons of operating results among real estate investment trusts more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of real estate investment trusts, they do not represent cash flows from operations or net income attributable to common stockholders as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO and AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than the Company does.
Net Operating Income (“NOI”). The Company believes that net income attributable to common stockholders as defined by GAAP is the most appropriate earnings measure. The Company considers NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines NOI as total revenues less operating expenses. NOI excludes all other financial statement amounts included in net income.
Normalized FFO and Normalized AFFO. Normalized FFO and Normalized AFFO represent FFO and AFFO, respectively, adjusted for certain income and expense items that the Company does not believe are indicative of its ongoing operating results. The Company considers Normalized FFO and Normalized AFFO to be useful measures to evaluate the Company’s operating results excluding these income and expense items to help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized FFO and Normalized AFFO do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. Normalized FFO and Normalized AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of Normalized FFO and Normalized AFFO may not be comparable to Normalized FFO and Normalized AFFO reported by other 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.

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