EX-99.3 4 sbraex9932024q3.htm Q3 2024 NON-GAAP RECONCILIATIONS Document

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Reconciliations of Non-GAAP Financial Measures

September 30, 2024

(Unaudited)



SABRA HEALTH CARE REIT, INC.
2024 OUTLOOK

The table below sets forth our 2024 guidance (per diluted common share):
 LowHigh
Net income$0.48 $0.49 
Add:
Depreciation and amortization of real estate assets0.73 0.73 
Depreciation and amortization of real estate assets related to unconsolidated joint ventures0.04 0.04 
Net loss on sales of real estate0.10 0.10 
FFO$1.35 $1.36 
Normalizing items0.04 0.04 
Normalized FFO attributable to common stockholders$1.39 $1.40 
FFO attributable to common stockholders$1.35 $1.36 
Stock-based compensation expense0.04 0.04 
Non-cash rental and related revenues(0.02)(0.02)
Non-cash interest expense0.04 0.04 
AFFO$1.41 $1.42 
Normalizing items0.02 0.02 
Normalized AFFO attributable to common stockholders$1.43 $1.44 


Earnings guidance above:
•assumes year-over-year same store Cash NOI growth in the mid-to-high teens for the Senior Housing - Managed portfolio;
•incorporates all announced investment and disposition activity, as well as announced activity under the at-the-market equity offering program; and
•does not assume additional investment, disposition or capital transactions beyond those already disclosed.


The foregoing guidance ranges reflect management's view of current and future market conditions. There can be no assurance that the Company's actual results will not differ materially from the estimates set forth above. Except as otherwise required by law, the Company assumes no, and hereby disclaims any, obligation to update any of the foregoing guidance ranges as a result of new information or new or future developments.

logo2a.jpg See reporting definitions.                        2


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,
 2024202320242023
Net income (loss)$29,788 $(15,101)$80,017 $(3,400)
Add:
Depreciation and amortization of real estate assets42,720 43,242 127,315 140,211 
Depreciation, amortization and impairment of real estate assets related to unconsolidated joint ventures2,243 2,255 6,680 6,505 
Net loss on sales of real estate5,745 46,545 3,969 75,893 
Impairment of real estate— — 18,472 7,064 
FFO$80,496 $76,941 $236,453 $226,273 
Write-offs of cash and straight-line rental income receivable and lease intangibles3,086 939 5,539 1,371 
Loss on extinguishment of debt— — — 1,541 
(Recovery of) provision for loan losses(148)328 (446)549 
Other normalizing items (1)
119 (1,003)2,718 1,066 
Normalized FFO$83,553 $77,205 $244,264 $230,800 
FFO$80,496 $76,941 $236,453 $226,273 
Stock-based compensation expense2,586 2,235 6,448 5,468 
Non-cash rental and related revenues(433)(1,312)(2,229)(6,781)
Non-cash interest income12 8 24 (380)
Non-cash interest expense2,611 3,088 8,750 9,179 
Non-cash portion of loss on extinguishment of debt— — — 1,541 
(Recovery of) provision for loan losses(148)328 (446)549 
Other adjustments related to unconsolidated joint ventures113 133 401 371 
Other adjustments353 256 1,192 950 
AFFO$85,590 $81,677 $250,593 $237,170 
Write-off of cash rental income1,189 — 751 — 
Other normalizing items (1)
113 (1,017)2,549 1,021 
Normalized AFFO$86,892 $80,660 $253,893 $238,191 
Amounts per diluted common share:
Net income (loss)$0.13 $(0.07)$0.34 $(0.01)
FFO$0.34 $0.33 $1.01 $0.97 
Normalized FFO$0.35 $0.33 $1.04 $0.99 
AFFO$0.36 $0.35 $1.06 $1.01 
Normalized AFFO$0.37 $0.34 $1.08 $1.02 
Weighted average number of common shares outstanding, diluted:
Net income (loss)237,043,400 231,224,692 234,777,101 231,197,375 
FFO and Normalized FFO 237,043,400 232,835,849 234,777,101 232,566,392 
AFFO and Normalized AFFO 237,940,868 233,988,463 235,890,966 233,878,874 



(1)     Other normalizing items for FFO and AFFO primarily include triple-net operating expenses, net of recoveries.
logo2a.jpg See reporting definitions.                        3



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
EBITDA, Adjusted EBITDA, Adjusted EBITDA, as adjusted and Annualized Adjusted EBITDA, as adjusted
Net Debt and Net Debt to Adjusted EBITDA
(in thousands)

Three Months Ended
September 30, 2024
Net income$29,788 
Interest29,467 
Income tax benefit(265)
Depreciation and amortization42,720 
EBITDA$101,710 
Income from unconsolidated joint ventures(214)
Distributions from unconsolidated joint ventures1,190 
Stock-based compensation expense 2,586 
Acquisition and transaction costs283 
Non-cash revenue write-offs and recovery of loan losses1,764 
Other expense1,765 
Net loss on sales of real estate5,745 
Adjusted EBITDA (1)
$114,829 
Adjustments for current period activity (2)
(430)
Adjusted EBITDA, as adjusted$114,399 
Adjusted EBITDA, as adjusted, annualized$457,596 
September 30, 2024
Secured debt$46,623 
Revolving credit facility152,558 
Term loans540,985 
Senior unsecured notes1,750,000 
Consolidated Debt2,490,166 
Cash and cash equivalents(63,004)
Net Debt$2,427,162 
September 30, 2024
Net Debt$2,427,162 
Annualized Adjusted EBITDA, as adjusted$457,596 
Net Debt to Adjusted EBITDA5.30x












(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)    Adjustments for current period activity give effect to the acquisitions and dispositions completed during the period as though such acquisitions and dispositions were completed as of the beginning of the period and adjust for certain income and expense items that the Company does not believe are indicative of its operating results for the current period.
logo2a.jpg See reporting definitions.                        4



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

Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Cash rental income$91,829 $88,006 $273,955 $265,044 
Straight-line rental income1,119 796 3,383 3,561 
Write-offs of cash and straight-line rental income receivable and lease intangibles(3,086)(939)(5,539)(1,372)
Above/below market lease amortization1,212 1,456 3,634 4,592 
Operating expense recoveries3,481 3,766 9,994 11,404 
Rental and related revenues$94,555 $93,085 $285,427 $283,229 


logo2a.jpg See reporting definitions.                        5



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

Three Months Ended
 September 30, 2023December 31, 2023March 31, 2024June 30, 2024September 30, 2024
Revenues:
Resident fees and services$59,748 $61,256 $66,031 $67,939 $73,746 
Income (loss) from unconsolidated joint ventures:
Resident fees and services9,950 10,007 10,362 10,453 10,772 
Resident fees and services not included in same store (1)
(6,700)(6,969)(11,176)(11,960)(16,716)
Same store resident fees and services$62,998 $64,294 $65,217 $66,432 $67,802 
Net (loss) income$(15,101)$17,156 $26,254 $23,975 $29,788 
Adjustments:
Net loss (income) not related to Senior Housing - Managed18,275 (13,562)(21,673)(17,589)(22,789)
Depreciation and amortization11,885 11,707 12,084 11,278 12,727 
Other income(470)— (898)— — 
Net (gain) loss on sale of real estate(9)5 — — — 
Loss (income) from unconsolidated joint ventures645 761 595 (80)(214)
Sabra's share of unconsolidated joint ventures' Net Operating Income2,612 2,425 2,690 3,236 3,408 
Cash Net Operating Income$17,837 $18,492 $19,052 $20,820 $22,920 
Cash Net Operating Income not included in same store (1)
(516)(765)(1,152)(960)(2,523)
Same store Cash Net Operating Income$17,321 $17,727 $17,900 $19,860 $20,397 
















(1)    Includes adjustments for changes in the foreign currency exchange rate where applicable by applying the average exchange rate for the current period to prior period results.
logo2a.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, 2024
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed ConsolidatedSenior Housing - Managed UnconsolidatedTotal Senior HousingOtherCorporateTotal
Net income (loss)$38,778 $4,962 $6,785 $214 $11,961 $7,184 $3,299 $9,700 $(41,134)$29,788 
Adjustments:
Depreciation and amortization21,119 3,769 12,727 — 16,496 3,553 1,461 — 91 42,720 
Interest201 214 — — 214 — — — 29,052 29,467 
General and administrative— — — — — — — — 12,404 12,404 
Recovery of loan losses and other reserves— — — — — — — — (148)(148)
Net loss on sales of real estate5,745 — — — — — — — — 5,745 
Income from unconsolidated joint ventures— — — (214)(214)— — — — (214)
Income tax benefit— — — — — — — — (265)(265)
Sabra’s share of unconsolidated joint ventures’ Net Operating Income— — — 3,408 3,408 — — — — 3,408 
Net Operating Income$65,843 $8,945 $19,512 $3,408 $31,865 $10,737 $4,760 $9,700 $— $122,905 
Non-cash revenue and expense adjustments(1,252)1,015 — — 1,015 (141)(42)12 — (408)
Cash Net Operating Income$64,591 $9,960 $19,512 $3,408 $32,880 $10,596 $4,718 $9,712 $— $122,497 













logo2a.jpg         See reporting definitions.                                  7

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI and Annualized Cash NOI, as adjusted by Property Type
(in thousands)

Nine Months Ended September 30, 2024
Skilled Nursing/ Transitional CareSenior HousingBehavioral HealthSpecialty Hospitals and Other
Senior Housing - LeasedSenior Housing - Managed ConsolidatedSenior Housing - Managed UnconsolidatedTotal Senior HousingOtherCorporateTotal
Net income (loss)$121,227 $20,746 $18,267 $(301)$38,712 $6,325 $9,932 $27,746 $(123,925)$80,017 
Adjustments:
Depreciation and amortization64,172 11,673 36,089 — 47,762 10,748 4,384 — 249 127,315 
Interest607 649 — — 649 — — — 85,933 87,189 
General and administrative— — — — — — — — 37,035 37,035 
Recovery of loan losses— — — — — — — — (446)(446)
Impairment of real estate5,679 — — — — 12,324 — — 469 18,472 
Other (income) expense— — (898)— (898)— — — 60 (838)
Net loss on sales of real estate3,969 — — — — — — — — 3,969 
Loss from unconsolidated joint ventures— — — 301 301 — — — — 301 
Income tax expense— — — — — — — — 625 625 
Sabra’s share of unconsolidated joint ventures’ Net Operating Income— — — 9,334 9,334 — — — — 9,334 
Net Operating Income$195,654 $33,068 $53,458 $9,334 $95,860 $29,397 $14,316 $27,746 $— $362,973 
Non-cash revenue and expense adjustments(3,794)(591)— — (591)2,383 (153)24 — (2,131)
Cash Net Operating Income$191,860 $32,477 $53,458 $9,334 $95,269 $31,780 $14,163 $27,770 $— $360,842 
Annualizing adjustments (1)
60,968 13,459 24,589 4,300 42,348 11,772 4,776 8,702 — 128,566 
Annualized Cash Net Operating Income$252,828 $45,936 $78,047 $13,634 $137,617 $43,552 $18,939 $36,472 $— $489,408 
Reallocation adjustments (2)
1,760 6,218 — — 6,218 24,426 — (32,404)— — 
Annualized Cash Net Operating Income, as adjusted$254,588 $52,154 $78,047 $13,634 $143,835 $67,978 $18,939 $4,068 $— $489,408 







(1)    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.
(2)    Adjustments to reflect Annualized Cash Net Operating Income from mortgage and construction loans receivable and preferred equity investments in the related asset class of the underlying real estate.
logo2a.jpg         See reporting definitions.                                  8

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Payor Source
(in thousands)

Nine Months Ended September 30, 2024
Private PayorsNon-Private PayorsOtherCorporateTotal
Net income (loss)$60,286 $115,910 $27,746 $(123,925)$80,017 
Adjustments:
Depreciation and amortization64,731 62,335 — 249 127,315 
Interest675 581 — 85,933 87,189 
General and administrative— — — 37,035 37,035 
Recovery of loan losses— — — (446)(446)
Impairment of real estate11,831 6,172 — 469 18,472 
Other (income) expense(898)— — 60 (838)
Net (gain) loss on sales of real estate(649)4,618 — — 3,969 
Loss from unconsolidated joint ventures301 — — — 301 
Income tax expense— — — 625 625 
Sabra’s share of unconsolidated joint ventures’ Net Operating Income9,334 — — — 9,334 
Net Operating Income$145,611 $189,616 $27,746 $— $362,973 
Non-cash revenue and expense adjustments776 (2,931)24 — (2,131)
Cash Net Operating Income$146,387 $186,685 $27,770 $— $360,842 
Annualizing adjustments (1)
59,126 60,738 8,702 — 128,566 
Annualized Cash Net Operating Income$205,513 $247,423 $36,472 $— $489,408 













(1)    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.
logo2a.jpg         See reporting definitions.                                  9

SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Annualized Cash NOI by Relationship
(in thousands)

Nine Months Ended September 30, 2024
Signature HealthcareEnsign GroupAvamere Family of CompaniesSignature BehavioralRecovery Centers of AmericaThe McGuire GroupAll Other RelationshipsCorporateTotal
Net income (loss)$18,877 $20,697 $10,331 $18,073 $19,038 $10,784 $106,142 $(123,925)$80,017 
Adjustments:
Depreciation and amortization10,103 9,737 8,812 6,721 1,563 5,345 84,785 249 127,315 
Interest— — — — — — 1,256 85,933 87,189 
General and administrative— — — — — — — 37,035 37,035 
Recovery of loan losses— — — — — — — (446)(446)
Impairment of real estate2,661 — — — — — 15,342 469 18,472 
Other (income) expense— — — — — — (898)60 (838)
Net loss (gain) on sales of real estate3 — 10,509 — — — (6,543)— 3,969 
Loss from unconsolidated joint ventures— — — — — — 301 — 301 
Income tax expense— — — — — — — 625 625 
Sabra’s share of unconsolidated joint ventures’ Net Operating Income— — — — — — 9,334 — 9,334 
Net Operating Income$31,644 $30,434 $29,652 $24,794 $20,601 $16,129 $209,719 $— $362,973 
Non-cash revenue and expense adjustments22 40 58 (386)(83)(2,906)1,124 — (2,131)
Cash Net Operating Income$31,666 $30,474 $29,710 $24,408 $20,518 $13,223 $210,843 $— $360,842 
Annualizing adjustments (1)
10,953 10,107 9,425 8,492 6,947 4,444 78,198 — 128,566 
Annualized Cash Net Operating Income$42,619 $40,581 $39,135 $32,900 $27,465 $17,667 $289,041 $— $489,408 













(1)    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.
logo2a.jpg         See reporting definitions.                                  10
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 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.
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 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 (recovery of) 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 noncapitalizable acquisition costs, transaction costs related to operator transitions and organizational or other restructuring activities, 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.
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.
logo2a.jpg         See reporting definitions.                                  11
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.
logo2a.jpg         See reporting definitions.                                  12