UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q ~~10-Q~~

(Mark One)



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2020



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34950

SABRA HEALTH CARE REIT, INC.

(Exact Name of Registrant as Specified in Its Charter)



~~Maryland~~

	~~27-2560479~~
Maryland		27-2560479
(State of Incorporation)		(I.R.S. Employer Identification No.)

18500 Von Karman Avenue, Suite 550

Irvine,, CA92612

(~~888~~) (888) 393-8248

(Address, zip code and telephone number of Registrant)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $.01 par value	SBRA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April~~October 29, 2020, there were ~~205,559,356~~206,928,325 shares of the registrant’s $0.01 par value Common Stock outstanding.

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SABRA HEALTH CARE REIT, INC. AND SUBSIDIARIES

Index

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References throughout this document to “Sabra,” “we,” “our,” “ours” and “us” refer to Sabra Health Care REIT, Inc. and its direct and indirect consolidated subsidiaries and not any other person.

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q (this “10-Q”) contain “forward-looking” information as that term is defined by the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward-looking statements. Examples of forward-looking statements include all statements regarding our expected future financial position, results of operations, cash flows, liquidity, financing plans, business strategy, tenants, the expected amounts and timing of dividends and other distributions, projected expenses and capital expenditures, competitive position, growth opportunities, potential investments, potential dispositions, plans and objectives for future operations, and compliance with and changes in governmental regulations. 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:

•the ongoing COVID-19 pandemic and measures intended to prevent its spread, including the impact on our tenants, operators and Senior Housing - Managed communities (as defined below);

•our dependence on the operating success of our tenants;

•the potential variability of our reported rental and related revenues following the adoption of Topic 842 (as defined below) on January 1, 2019;

•operational risks with respect to our Senior Housing - Managed communities;

•the effect of our tenants declaring bankruptcy or becoming insolvent;

•our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties;

•the impact of litigation and rising insurance costs on the business of our tenants;

•the possibility that Sabra may not acquire the remaining majority interest in the Enlivant Joint Venture (as defined below);

•risks associated with our investments in joint ventures;

•changes in healthcare regulation and political or economic conditions;

•the impact of required regulatory approvals of transfers of healthcare properties;

•competitive conditions in our industry;

•our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries;

• the significant amount of and our ability to service our indebtedness;

•covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms;

•increases in market interest rates;

•the potential phasing out of the London Interbank Offered Rate (“LIBOR”) benchmark after 2021;

•our ability to raise capital through equity and debt financings;

•changes in foreign currency exchange rates;

•the relatively illiquid nature of real estate investments;

•the loss of key management personnel;

•uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities;

•the impact of a failure or security breach of information technology in our operations;

•our ability to maintain our status as a real estate investment trust (“REIT”) under the federal tax laws;

•changes in tax laws and regulations affecting REITs (including the potential effects of the Tax Cuts and Jobs Act);

•compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT; and

•the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities.

We urge you to carefully consider these risks and review the additional disclosures we make concerning risks and other factors that may materially affect the outcome of our forward-looking statements and our future business and operating results, including those made in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019 (our “2019 Annual Report on Form 10-K”) and in Part II, Item 1A, “Risk Factors” of ~~this~~our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as such risk factors may be amended, supplemented or superseded from time to time

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by other reports we file with the Securities and Exchange

Commission (the “SEC”), including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. We caution you that any forward-looking statements made in this 10-Q are not guarantees of future performance, events or results, and you should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. 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 10-Q or to reflect the occurrence of unanticipated events, unless required by law to do so.

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PART I. FINANCIAL INFORMATION



ITEM 1.			FINANCIAL STATEMENTS

SABRA HEALTH CARE REIT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)


	September 30, 2020		December 31, 2019
	(unaudited)
Assets
Real estate investments, net of accumulated depreciation of $640,214 and $539,213 as of September 30, 2020 and December 31, 2019, respectively	$	5,306,272	$	5,341,370
Loans receivable and other investments, net	103,820		107,374
Investment in unconsolidated joint venture	293,801		319,460
Cash and cash equivalents	35,034		39,097
Restricted cash	6,815		10,046

Lease intangible assets, net	85,943		101,509
Accounts receivable, prepaid expenses and other assets, net	159,933		150,443
Total assets	$	5,991,618	$	6,069,299

Liabilities
Secured debt, net	$	78,975	$	113,070
Revolving credit facility	56,000		0
Term loans, net	1,039,685		1,040,258
Senior unsecured notes, net	1,248,324		1,248,773

Accounts payable and accrued liabilities	143,742		108,792
Lease intangible liabilities, net	60,552		69,946

Total liabilities	2,627,278		2,580,839

Commitments and contingencies (Note 12)

Equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2020 and December 31, 2019	0		0
Common stock, $0.01 par value; 500,000,000 shares authorized, 206,928,325 and 205,208,018 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively	2,069		2,052
Additional paid-in capital	4,101,269		4,072,079
Cumulative distributions in excess of net income	(689,828)		(573,283)
Accumulated other comprehensive loss	(49,170)		(12,388)


Total equity	3,364,340		3,488,460
Total liabilities and equity	$	5,991,618	$	6,069,299

March 31, 2020 December 31, 2019
(unaudited)
Assets
Real estate investments, net of accumulated depreciation of $569,752 and $539,213 as of March 31, 2020 and December 31, 2019, respectively $ 5,363,168
$ 5,341,370
Loans receivable and other investments, net 88,370
107,374
Investment in unconsolidated joint venture 311,753
319,460
Cash and cash equivalents 54,051
39,097
Restricted cash 8,375
10,046
Lease intangible assets, net 96,758
101,509
Accounts receivable, prepaid expenses and other assets, net 169,829
150,443
Total assets $ 6,092,304
$ 6,069,299

Liabilities
Secured debt, net $ 97,066
$ 113,070
Revolving credit facility 101,000
—
Term loans, net 1,033,110
1,040,258
Senior unsecured notes, net 1,248,170
1,248,773
Accounts payable and accrued liabilities 150,926
108,792
Lease intangible liabilities, net 66,819
69,946
Total liabilities 2,697,091
2,580,839

Commitments and contingencies (Note 13)

Equity
Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2020 and December 31, 2019 —
—
Common stock, $.01 par value; 250,000,000 shares authorized, 205,559,356 and 205,208,018 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively 2,056
2,052
Additional paid-in capital 4,075,781
4,072,079
Cumulative distributions in excess of net income (631,251 ) (573,283 )
Accumulated other comprehensive loss (51,373 ) (12,388 )
Total equity 3,395,213
3,488,460
Total liabilities and equity $ 6,092,304
$ 6,069,299

See accompanying notes to condensed consolidated financial statements.

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SABRA HEALTH CARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME ~~(LOSS)~~

(dollars in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues:
Rental and related revenues	$	100,612	$	110,104	$	319,851	$	339,291
Interest and other income	3,299		3,325		8,756		77,145
Resident fees and services	39,341		36,405		117,908		89,537

Total revenues	143,252		149,834		446,515		505,973

Expenses:
Depreciation and amortization	44,209		43,092		132,579		137,517
Interest	24,904		29,255		75,900		99,181
Triple-net portfolio operating expenses	5,249		5,611		15,481		17,140
Senior housing - managed portfolio operating expenses	27,745		23,979		82,976		60,258
General and administrative	7,216		8,709		24,650		24,952

(Recovery of) provision for loan losses and other reserves	(90)		57		706		1,457
Impairment of real estate	3,154		13,966		3,154		119,102

Total expenses	112,387		124,669		335,446		459,607

Other income (expense):
Loss on extinguishment of debt	(139)		(644)		(531)		(10,763)
Other income	115		215		2,308		385
Net gain (loss) on sales of real estate	2,715		(19)		2,828		1,216

Total other income (expense)	2,691		(448)		4,605		(9,162)

Income before income (loss) from unconsolidated joint venture and income tax benefit (expense)	33,556		24,717		115,674		37,204

Income (loss) from unconsolidated joint venture	2,766		(605)		(13,037)		(5,635)
Income tax benefit (expense)	138		(826)		(1,337)		(2,292)

Net income	36,460		23,286		101,300		29,277

Net income attributable to noncontrolling interest	0		(4)		0		(22)





Net income attributable to common stockholders	$	36,460	$	23,282	$	101,300	$	29,255

Net income attributable to common stockholders, per:

Basic common share	$	0.18	$	0.12	$	0.49	$	0.16

Diluted common share	$	0.18	$	0.12	$	0.49	$	0.16

Weighted-average number of common shares outstanding, basic	205,791,699		190,650,400		205,592,806		183,578,254

Weighted-average number of common shares outstanding, diluted	206,727,167		191,952,389		206,442,674		184,698,411

Three Months Ended March 31,
2020 2019
Revenues:
Rental and related revenues $ 106,512
$ 116,387
Interest and other income 2,851
3,325
Resident fees and services 39,983
17,061

Total revenues 149,346
136,773

Expenses:
Depreciation and amortization 44,168
44,949
Interest 25,704
36,318
Triple-net portfolio operating expenses 4,901
5,289
Senior housing - managed portfolio operating expenses 27,261
12,040
General and administrative 8,761
8,184
Provision for loan losses and other reserves 667
1,207
Impairment of real estate —
103,134

Total expenses 111,462
211,121

Other income (expense):
Other income 2,259
171
Net loss on sales of real estate (217 ) (1,520 )

Total other income (expense) 2,042
(1,349 )

Income (loss) before loss from unconsolidated joint venture and income tax expense 39,926
(75,697 )

Loss from unconsolidated joint venture (3,667 ) (1,383 )
Income tax expense (1,042 ) (612 )

Net income (loss) 35,217
(77,692 )

Net income attributable to noncontrolling interest —
(12 )

Net income (loss) attributable to common stockholders $ 35,217
$ (77,704 )

Net income (loss) attributable to common stockholders, per:

Basic common share $ 0.17
$ (0.44 )

Diluted common share $ 0.17
$ (0.44 )

Weighted-average number of common shares outstanding, basic 205,395,330
178,385,984

Weighted-average number of common shares outstanding, diluted 206,006,285
178,385,984

See accompanying notes to condensed consolidated financial statements.

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SABRA HEALTH CARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(in thousands)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Net income	$	36,460	$	23,286	$	101,300	$	29,277
Other comprehensive income (loss):
Unrealized (loss) gain, net of tax:
Foreign currency translation (loss) gain	(359)		917		814		924
Unrealized gain (loss) on cash flow hedges	6,830		(9,376)		(37,596)		(32,620)

Total other comprehensive income (loss)	6,471		(8,459)		(36,782)		(31,696)

Comprehensive income (loss)	42,931		14,827		64,518		(2,419)

Comprehensive income attributable to noncontrolling interest	0		(4)		0		(22)

Comprehensive income (loss) attributable to Sabra Health Care REIT, Inc.	$	42,931	$	14,823	$	64,518	$	(2,441)

Three Months Ended March 31,
2020 2019

Net income (loss) $ 35,217
$ (77,692 )
Other comprehensive income (loss):
Unrealized gain (loss), net of tax:
Foreign currency translation gain (loss) 1,707
(560 )
Unrealized loss on cash flow hedges (40,692 ) (13,488 )

Total other comprehensive loss (38,985 ) (14,048 )

Comprehensive loss (3,768 ) (91,740 )

Comprehensive income attributable to noncontrolling interest —
(12 )

Comprehensive loss attributable to Sabra Health Care REIT, Inc. $ (3,768 ) $ (91,752 )

See accompanying notes to condensed consolidated financial statements.

SABRA HEALTH CARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(dollars in thousands, except per share data)

(unaudited)


		Three Months Ended September 30, 2019
	Common Stock		Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
		Shares			Amounts
Balance, June 30, 2019		189,515,024	$	1,895		$	3,725,971	$	(460,832)	$	(10,936)	$	3,256,098	$	4,278	$	3,260,376

Net income		—	—			—		23,282		—		23,282		4		23,286
Other comprehensive loss		—	—			—		—		(8,459)		(8,459)		—		(8,459)
Buyout of noncontrolling interest		—	—			4,039		—		—		4,039		(4,239)		(200)
Distributions to noncontrolling interest		—	—			—		—		—		—		(43)		(43)
Amortization of stock-based compensation		—	—			3,930		—		—		3,930		—		3,930

Common stock issuance, net		4,181,877	42			89,644		—		—		89,686		—		89,686


Common dividends ($0.45 per share)		—	—			—		(86,159)		—		(86,159)		—		(86,159)
Balance, September 30, 2019		193,696,901	$	1,937		$	3,823,584	$	(523,709)	$	(19,395)	$	3,282,417	$	0	$	3,282,417


		Three Months Ended September 30, 2020
	Common Stock		Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
		Shares			Amounts
Balance, June 30, 2020		205,560,680	$	2,056		$	4,078,737	$	(663,901)	$	(55,641)	$	3,361,251	$	0	$	3,361,251

Net income		—	—			—		36,460		—		36,460		—		36,460
Other comprehensive income		—	—			—		—		6,471		6,471		—		6,471


Amortization of stock-based compensation		—	—			1,625		—		—		1,625		—		1,625

Common stock issuance, net		1,367,645	13			20,907		—		—		20,920		—		20,920

Common dividends ($0.30 per share)		—	—			—		(62,387)		—		(62,387)		—		(62,387)
Balance, September 30, 2020		206,928,325	$	2,069		$	4,101,269	$	(689,828)	$	(49,170)	$	3,364,340	$	0	$	3,364,340

Three Months Ended March 31, 2019
Common Stock Additional
Paid-in Capital Cumulative Distributions in Excess of Net Income Accumulated Other Comprehensive Income (Loss) Total
Stockholders’
Equity Noncontrolling Interest Total Equity
Shares Amounts
Balance, December 31, 2018 178,306,528
$ 1,783
$ 3,507,925
$ (271,595 ) $ 12,301
$ 3,250,414
$ 4,333
$ 3,254,747
Cumulative effect of Topic 842 adoption —
—
—
(32,502 ) —
(32,502 ) —
(32,502 )
Net (loss) income —
—
—
(77,704 ) —
(77,704 ) 12
(77,692 )
Other comprehensive loss —
—
—
—
(14,048 ) (14,048 ) —
(14,048 )
Distributions to noncontrolling interest —
—
—
—
—
—
(36 ) (36 )
Amortization of stock-based compensation —
—
3,270
—
—
3,270
—
3,270
Common stock issuance, net 113,071
1
(2,208 ) —
—
(2,207 ) —
(2,207 )
Common dividends ($0.45 per share) —
—
—
(80,754 ) —
(80,754 ) —
(80,754 )
Balance, March 31, 2019 178,419,599
$ 1,784
$ 3,508,987
$ (462,555 ) $ (1,747 ) $ 3,046,469
$ 4,309
$ 3,050,778

Three Months Ended March 31, 2020
Common Stock Additional
Paid-in Capital Cumulative Distributions in Excess of Net Income Accumulated Other Comprehensive Income (Loss) Total
Stockholders’
Equity Noncontrolling Interest Total Equity
Shares Amounts
Balance, December 31, 2019 205,208,018
$ 2,052
$ 4,072,079
$ (573,283 ) $ (12,388 ) $ 3,488,460
$ —
$ 3,488,460
Cumulative effect of Topic 326 adoption —
—
—
(167 ) —
(167 ) —
(167 )
Net income —
—
—
35,217
—
35,217
—
35,217
Other comprehensive loss —
—
—
—
(38,985 ) (38,985 ) —
(38,985 )
Amortization of stock-based compensation —
—
2,988
—
—
2,988
—
2,988
Common stock issuance, net 351,338
4
714
—
—
718
—
718
Common dividends ($0.45 per share) —
—
—
(93,018 ) —
(93,018 ) —
(93,018 )
Balance, March 31, 2020 205,559,356
$ 2,056
$ 4,075,781
$ (631,251 ) $ (51,373 ) $ 3,395,213
$ —
$ 3,395,213

See accompanying notes to condensed consolidated financial statements.

SABRA HEALTH CARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)

(dollars in thousands, except per share data)

(unaudited)


		Nine Months Ended September 30, 2019
	Common Stock		Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
		Shares			Amounts
Balance, December 31, 2018		178,306,528	$	1,783		$	3,507,925	$	(271,595)	$	12,301	$	3,250,414	$	4,333	$	3,254,747
Cumulative effect of Topic 842 adoption		—	—			—		(32,502)		—		(32,502)		—		(32,502)
Net income		—	—			—		29,255		—		29,255		22		29,277
Other comprehensive loss		—	—			—		—		(31,696)		(31,696)		—		(31,696)
Buyout of noncontrolling interest		—	—			4,039		—		—		4,039		(4,239)		(200)
Distributions to noncontrolling interest		—	—			—		—		—		—		(116)		(116)
Amortization of stock-based compensation		—	—			10,474		—		—		10,474		—		10,474

Common stock issuance, net		15,390,373	154			301,146		—		—		301,300		—		301,300


Common dividends ($1.35 per share)		—	—			—		(248,867)		—		(248,867)		—		(248,867)
Balance, September 30, 2019		193,696,901	$	1,937		$	3,823,584	$	(523,709)	$	(19,395)	$	3,282,417	$	0	$	3,282,417


		Nine Months Ended September 30, 2020
	Common Stock		Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
		Shares			Amounts
Balance, December 31, 2019		205,208,018	$	2,052		$	4,072,079	$	(573,283)	$	(12,388)	$	3,488,460	$	0	$	3,488,460
Cumulative effect of Topic 326 adoption		—	—			—		(167)		—		(167)		—		(167)
Net income		—	—			—		101,300		—		101,300		—		101,300
Other comprehensive loss		—	—			—		—		(36,782)		(36,782)		—		(36,782)


Amortization of stock-based compensation		—	—			7,582		—		—		7,582		—		7,582

Common stock issuance, net		1,720,307	17			21,608		—		—		21,625		—		21,625

Common dividends ($1.05 per share)		—	—			—		(217,678)		—		(217,678)		—		(217,678)
Balance, September 30, 2020		206,928,325	$	2,069		$	4,101,269	$	(689,828)	$	(49,170)	$	3,364,340	$	0	$	3,364,340

See accompanying notes to condensed consolidated financial statements.

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SABRA HEALTH CARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,							Nine Months Ended September 30,
	2020			2019				2020		2019
Cash flows from operating activities:							Cash flows from operating activities:
Net income (loss)	$	35,217		$	(77,692	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income							Net income	$	101,300	$	29,277
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	44,168			44,949			Depreciation and amortization	132,579		137,517
Non-cash rental and related revenues	(365		)	(1,164		)	Non-cash rental and related revenues	1,340		(12,965)
Non-cash interest income	(561		)	(562		)	Non-cash interest income	(1,743)		(1,680)
Non-cash interest expense	2,233			2,561			Non-cash interest expense	6,527		7,846
Stock-based compensation expense	2,360			2,775			Stock-based compensation expense	5,651		8,829
Non-cash lease termination income							Non-cash lease termination income	0		(9,725)

Loss on extinguishment of debt							Loss on extinguishment of debt	531		10,763

Provision for loan losses and other reserves	667			1,207			Provision for loan losses and other reserves	706		1,457
Net loss on sales of real estate	217			1,520
Net gain on sales of real estate							Net gain on sales of real estate	(2,828)		(1,216)
Impairment of real estate	—			103,134			Impairment of real estate	3,154		119,102
Loss from unconsolidated joint venture	3,667			1,383			Loss from unconsolidated joint venture	13,037		5,635
Distributions of earnings from unconsolidated joint venture	4,040			3,037			Distributions of earnings from unconsolidated joint venture	11,318		10,162
Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets, net	(6,895		)	(9,924		)	Accounts receivable, prepaid expenses and other assets, net	(3,523)		(7,252)
Accounts payable and accrued liabilities	(9,929		)	(17,265		)	Accounts payable and accrued liabilities	(2,594)		(20,769)

Net cash provided by operating activities	74,819			53,959			Net cash provided by operating activities	265,455		276,981
Cash flows from investing activities:							Cash flows from investing activities:
Acquisition of real estate	(67,274		)	—			Acquisition of real estate	(92,945)		(14,977)

Origination and fundings of loans receivable	(936		)	(2,776		)	Origination and fundings of loans receivable	(1,651)		(9,441)
Origination and fundings of preferred equity investments							Origination and fundings of preferred equity investments	(20,059)		0
Additions to real estate	(11,956		)	(5,072		)	Additions to real estate	(32,416)		(15,985)
Repayments of loans receivable	1,011			5,251			Repayments of loans receivable	3,095		13,761
Repayments of preferred equity investments	3,059			2,087			Repayments of preferred equity investments	3,399		3,672

Net proceeds from the sales of real estate	6,272			6,857			Net proceeds from the sales of real estate	8,754		321,715
Distributions in excess of earnings from unconsolidated joint venture							Distributions in excess of earnings from unconsolidated joint venture	1,305		0
Buyout of noncontrolling interests							Buyout of noncontrolling interests	0		(200)
Net cash (used in) provided by investing activities	(69,824		)	6,347			Net cash (used in) provided by investing activities	(130,518)		298,545
Cash flows from financing activities:							Cash flows from financing activities:
Net borrowings from (repayments of) revolving credit facility	101,000			(4,000		)	Net borrowings from (repayments of) revolving credit facility	56,000		(424,000)
Proceeds from issuance of senior unsecured notes							Proceeds from issuance of senior unsecured notes	0		297,039
Principal payments on senior unsecured notes							Principal payments on senior unsecured notes	0		(500,000)
Principal payments on secured debt	(877		)	(849		)	Principal payments on secured debt	(2,396)		(2,566)
Payments of deferred financing costs	(715		)	(6		)	Payments of deferred financing costs	(819)		(14,001)
Payments related to extinguishment of debt							Payments related to extinguishment of debt	0		(6,897)
Distributions to noncontrolling interest	—			(36		)	Distributions to noncontrolling interest	0		(116)

Issuance of common stock, net	1,930			(2,323		)	Issuance of common stock, net	20,961		302,030
Dividends paid on common stock	(92,390		)	(80,260		)	Dividends paid on common stock	(215,747)		(247,222)
Net cash provided by (used in) financing activities	8,948			(87,474		)
Net increase (decrease) in cash, cash equivalents and restricted cash	13,943			(27,168		)

Net cash used in financing activities							Net cash used in financing activities	(142,001)		(595,733)

Net decrease in cash, cash equivalents and restricted cash							Net decrease in cash, cash equivalents and restricted cash	(7,064)		(20,207)
Effect of foreign currency translation on cash, cash equivalents and restricted cash	(660		)	149			Effect of foreign currency translation on cash, cash equivalents and restricted cash	(230)		211
Cash, cash equivalents and restricted cash, beginning of period	49,143			59,658			Cash, cash equivalents and restricted cash, beginning of period	49,143		59,658

Cash, cash equivalents and restricted cash, end of period	$	62,426		$	32,639		Cash, cash equivalents and restricted cash, end of period	$	41,849	$	39,662
Supplemental disclosure of cash flow information:							Supplemental disclosure of cash flow information:
Interest paid	$	21,526		$	42,195		Interest paid	$	67,995	$	100,230

Supplemental disclosure of non-cash investing activities:							Supplemental disclosure of non-cash investing activities:

Decrease in loans receivable and other investments due to acquisition of real estate	$	(16,092	)	$	—		Decrease in loans receivable and other investments due to acquisition of real estate	$	20,731	$	0
Secured debt assumed by buyers in connection with sales of real estate							Secured debt assumed by buyers in connection with sales of real estate	$	31,830	$	0

See accompanying notes to condensed consolidated financial statements.

SABRA HEALTH CARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Sabra Health Care REIT, Inc. (“Sabra” or the “Company”) was incorporated on May 10, 2010 as a wholly owned subsidiary of Sun Healthcare Group, Inc. (“Sun”) and commenced operations on November 15, 2010 following Sabra’s separation from Sun. Sabra elected to be treated as a real estate investment trust (“REIT”) with the filing of its United States (“U.S.”) federal income tax return for the taxable year beginning January 1, 2011. Sabra believes that it has been organized and operated, and it intends to continue to operate, in a manner to qualify as a REIT. Sabra’s primary business consists of acquiring, financing and owning real estate property to be leased to third-party tenants in the healthcare sector. Sabra primarily generates revenues by leasing properties to tenants and operators throughout the U.S. and Canada. Sabra owns substantially all of its assets and properties and conducts its operations through Sabra Health Care Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), of which Sabra is the sole general partner and a wholly owned subsidiary of Sabra is currently the only limited partner, or by subsidiaries of the Operating Partnership. The Company’s investment portfolio is primarily comprised of skilled nursing/transitional care facilities, senior housing communities (“Senior Housing - Leased”) and specialty hospitals and other facilities, in each case leased to third-party operators; senior housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”); investments in loans receivable; preferred equity investments; and an investment in an unconsolidated joint venture.

~~Since first being reported in Wuhan, China in December 2019, COVID-19 has spread globally, including to every state in the United States and more than 175 countries. On~~In March ~~11,~~ 2020, the World Health Organization declared COVID-19 a pandemic, and ~~on March 13, 2020,~~ the United States declared a national emergency with respect to COVID-19. ~~The outbreak~~In the intervening months, COVID-19 has spread globally and led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. Although some of these governmental restrictions have since been lifted or scaled back, a recent surge of COVID-19 infections has resulted in the re-imposition of certain restrictions and may lead to other restrictions being re-implemented in response to efforts to reduce the spread of COVID-19. These measures may remain in place for a significant amount of time. The COVID-19 pandemic and measures to prevent its spread have negatively impacted and are expected to continue to negatively impact the Company and its operations ~~in its fiscal quarter ending June 30, 2020 and beyond,~~ in a number of ways, including but not limited to:

•Decreased occupancy and increased operating costs for the Company’s tenants and borrowers, which has negatively impacted their operating results and may adversely impact their ability to make full and timely rental payments and debt service payments, respectively, to the Company. In some cases, the Company may have to restructure tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable to the Company as those currently in place. Reduced or modified rental and debt service amounts could result in the determination that the full amounts of the Company’s investments are not recoverable, which could result in an impairment charge. To date, the impact of COVID-19 on the Company’s skilled nursing/transitional care facility operators has been partially mitigated by the assistance they have received or expect to receive from state and federal assistance programs, including through the CARES Act (as defined and further described below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Skilled Nursing Facility Reimbursement Rates” in Part I, Item 2), although these benefits on an individual operator basis vary and may not provide enough relief to meet their rental obligations to the Company. Prior to September 1, 2020, few of these programs were available to the Company’s senior housing operators; as of September 1, 2020, eligible assisted living facility operators may apply for funding through the CARES Act, and the assistance received or expected to be received will partially mitigate the negative impact of COVID-19 on the Company’s eligible assisted living facility operators. As of September 30, 2020, the Company’s tenants and borrowers have continued to pay expected cash rents and debt service obligations consistent with past practice. However, the longer the duration of the COVID-19 pandemic, the more likely that the Company’s tenants and borrowers will begin to default on these obligations. Such defaults could materially and adversely affect the Company’s results of operations and liquidity, in addition to resulting in potential impairment charges.

•Decreased occupancy and increased operating costs within the Company’s Senior Housing - Managed portfolio and in the Company’s 49% equity interest in a joint venture with affiliates of Enlivant and TPG Real Estate, the real estate platform of TPG, that owns senior housing communities managed by Enlivant (the “Enlivant Joint Venture”), which ~~may~~have negatively impacted and are expected to continue to negatively impact the operating results of these

investments. As noted above, as of September 1, 2020, eligible assisted living facility operators may apply for funding through the CARES Act, and the assistance received or expected to be received will partially mitigate the negative impact of COVID-19 on the Company’s Senior Housing - Managed portfolio and the Enlivant Joint Venture. During each of the three and nine months ended September 30, 2020, the Company recognized government grants under the CARES Act of $4.2 million. In addition, on October 1, 2020, the Department of Health and Human Services announced $20 billion of new funding for assisted living facility operators that have already received funds and to those who were previously ineligible. Prolonged deterioration in the operating results for ~~these~~the Company’s investments in its Senior Housing - Managed portfolio and the Enlivant Joint Venture could result in the determination that the full amounts of the Company’s investments are not recoverable, which could result in an impairment charge.

The Company’s financial results as of and for the three and nine months ended ~~March 31,~~September 30, 2020 reflect the results of the Company’s evaluation of the impact of COVID-19 on its business including, but not limited to, its evaluation of potential impairments of long-lived or other assets, measurement of credit losses on financial instruments, evaluation of any lease modifications, evaluation of lease accounting impact, estimates of fair value and the Company’s ability to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Sabra and its wholly owned subsidiaries as of ~~March 31,~~September 30, 2020 and December 31, 2019 and for the three and nine month periods ended ~~March 31,~~September 30, 2020 and 2019. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair statement of the results for such periods. Operating results for the three and nine months ended ~~March 31,~~September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020~~.2020. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC.

GAAP requires the Company to identify entities for which control is achieved through voting rights or other means and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. If the Company were determined to be the primary beneficiary of the VIE, the Company would consolidate investments in the VIE. The Company may change its original assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary.

The Company identifies the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The Company performs this analysis on an ongoing basis. As of ~~March 31,~~September 30, 2020,, the Company determined that it was 0t the ~~primarily~~primary beneficiary of any VIEs.

As it relates to investments in loans, in addition to the Company’s assessment of VIEs and whether the Company is the primary beneficiary of those VIEs, the Company evaluates the loan terms and other pertinent facts to determine whether the loan investment should be accounted for as a loan or as a real estate joint venture. If an investment has the characteristics of a real estate joint venture, including if the Company participates in the majority of the borrower’s expected residual profit, the

Company would account for the investment as an investment in a real estate joint venture and not as a loan investment. Expected residual profit is defined as the amount of profit, whether called interest or another name, such as an equity kicker, above a reasonable amount of interest and fees expected to be earned by a lender. At ~~March 31,~~September 30, 2020,, NaN of the Company’s investments in loans were accounted for as real estate joint ventures.

As it relates to investments in joint ventures, the Company assesses any limited partners’ rights and their impact on the presumption of control of the limited partnership by any single partner. The Company also applies this guidance to managing member interests in limited liability companies. The Company reassesses its determination of which entity controls the joint venture if: there is a change to the terms or in the exercisability of the rights of any partners or members, the sole general partner or managing member increases or decreases its ownership interests, or there is an increase or decrease in the number of outstanding ownership interests. As of ~~March 31,~~September 30, 2020, the Company’s determination of which entity controls its investments in joint ventures has not changed as a result of any reassessment.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.

Certain amounts in the Company’s condensed consolidated statements of ~~income and condensed consolidated statements of~~ cash flows for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations.

Out of Period Adjustments

During the three months ended September 30, 2020, the Company identified certain historical errors in the recording of depreciation and amortization expense related to the basis difference in the Enlivant Joint Venture and not correctly expensing the allocable portion of the basis difference upon the sale of assets in the Enlivant Joint Venture. These errors impacted the Company’s investment in unconsolidated joint venture and income (loss) from unconsolidated joint venture as well as its condensed consolidated statements of income, condensed consolidated statements of comprehensive income (loss) and condensed consolidated statements of equity since 2018, which impacted the quarterly financial statements and annual periods previously issued. These errors resulted in understating (overstating) previously recorded income (loss) from unconsolidated joint venture and net income by $5.2 million for the six months ended June 30, 2020 and $0.1 million and ($1.7) million for the years ended December 31, 2019 and 2018, respectively. These out of period adjustments were recorded in the third quarter of 2020, resulting in an increase to income from unconsolidated joint venture and net income of $3.6 million. Management evaluated the impact of the errors to the current period and prior period financial statements and determined that the impact was not material to any of the impacted periods.

Government assistance provided to the Company in the form of an income grant, which is not related to long-lived assets and is not required to be repaid, is recognized as grant income when there is reasonable assurance that the grant will be received and the Company will comply with any conditions associated with the grant. Additionally, grants are recognized over the periods in which the Company recognizes the qualifying expenses and/or lost income for which the grants are intended to compensate. As of September 30, 2020, the amount of qualifying expenditures exceeded amounts recognized under the CARES Act, and the Company had complied with all grant conditions. Accordingly, during each of the three and nine months ended September 30, 2020, the Company recognized $1.2 million of grants in resident fees and services and $3.0 million of grants in loss from unconsolidated joint venture in the condensed consolidated statements of income.

Recently Issued Accounting Standards Update

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires that a financial asset (or a group of financial assets) measured at amortized cost basis be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The amendments in ASU 2016-13 are an improvement because they eliminate the probable initial recognition threshold under current GAAP and, instead, reflect an entity’s current estimate of all expected credit losses. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. In November 2018, the FASB

issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2018-19”), which amends ASU 2016-13 to clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20, and instead, impairment of such receivables should be accounted for in accordance with ASU 2016-02, Leases, as amended by subsequent ASUs (“Topic 842”). In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”), which amends ASU 2016-13 to clarify or address stakeholders’ specific issues about certain aspects of ASU 2016-13. ASU 2016-13, ASU 2018-19 and ASU 2019-11 are effective for fiscal years and interim periods within those years beginning after December 15, 2019, with early adoption permitted as of the fiscal years beginning after December 15, 2018. An entity will apply the amendments in these updates through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company adopted ASU 2016-13, ASU 2018-19 and ASU 2019-11 (collectively, “Topic 326”) on January 1, 2020.

The financial assets within the scope of Topic 326 are the Company’s investments in a direct financing lease and loans receivable, including the portion of unfunded loan commitments expected to be funded. The allowance for credit losses is calculated using the related amortization schedules, payment histories and loan-to-value ratios. The following rates are applied to determine the aggregate expected losses, which is recorded as the allowance for credit losses: (i) a default rate, (ii) a liquidation cost rate and (iii) a distressed property reduction rate. If no loan-to-value ratio is available, a loss severity rate is applied in place of the liquidation cost rate and the distressed property reduction rate. The default rate is based on average charge-off and delinquency rates from the Federal Reserve, and the other rates are based on industry research and historical performance of a similar portfolio of financial assets. Related interest income receivable balances are evaluated separately for collectability, and reserves are established based on management’s estimate of losses.

Upon adoption of these standards, the Company recognized the cumulative effect on the opening balance of the allowance for credit losses in the condensed consolidated balance sheets, which resulted in an increase to cumulative distributions in excess of net income and a decrease to total assets of $0.2 million.

Issued but Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance that provides transition relief for reference rate reform, including optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions that reference LIBOR or a reference rate that is expected to be discontinued as a result of reference rate reform if certain criteria are met. ASU 2020-04 is effective upon issuance, and the provisions generally can be applied prospectively as of January 1, 2020 through December 31, 2022. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

3. RECENT REAL ESTATE ACQUISITIONS

During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the Company acquired ~~2 senior housing~~3 Senior Housing - Leased communities ~~leased to a third party under a triple-net lease~~ and 1 Senior Housing - Managed community. ~~No acquisitions~~These investments were ~~completed during~~part of the ~~three~~Company’s proprietary development pipeline, and $20.7 million was previously funded through its preferred equity investments in these developments. During the nine months ended ~~March 31, 2019.~~September 30, 2019, the Company acquired 2 specialty hospitals/other facilities. The consideration was allocated as follows (in thousands):

Three Months Ended March 31,
2020
Land $ 4,740
Building and improvements 76,247
Tenant origination and absorption costs intangible assets 2,156
Tenant relationship intangible assets 224

Total consideration $ 83,367


	Nine Months Ended September 30,
	2020		2019
Land	$	5,800	$	2,040
Building and improvements	104,952		12,652
Tenant origination and absorption costs intangible assets	2,578		234
Tenant relationship intangible assets	347		51
Total consideration	$	113,677	$	14,977

The tenant origination and absorption costs intangible assets and tenant relationship intangible assets had ~~weighted-average~~weighted-

average amortization periods as of the respective dates of acquisition of ~~six~~seven years and 25 years, respectively, for acquisitions completed during the ~~three~~nine months ended ~~March 31, 2020.~~September 30, 2020, and 15 years and 25 years, respectively, for acquisitions completed during the nine months ended September 30, 2019.

For the three and nine months ended ~~March 31,~~September 30, 2020, the Company recognized ~~$2.4~~$3.4 million and $9.2 million of total revenues, respectively, and $1.4 million and $3.7 million of net income attributable to common stockholders, respectively, from the facilities acquired during the nine months ended September 30, 2020. For each of the three and nine months ended September 30, 2019, the Company recognized $0.2 million of total revenues and ~~$0.8~~$0.2 million of net income attributable to common stockholders from the facilities acquired during the ~~three~~nine months ended ~~March 31, 2020.~~September 30, 2019.

4. INVESTMENT IN REAL ESTATE PROPERTIES

The Company’s real estate properties held for investment consisted of the following (dollars in thousands):

As of ~~March 31,~~September 30, 2020


Property Type	Number of Properties	Number of Beds/Units	Total Real Estate at Cost		Accumulated Depreciation		Total Real Estate Investments, Net
Skilled Nursing/Transitional Care	287	32,019	$	3,642,653	$	(360,742)	$	3,281,911
Senior Housing - Leased	64	4,242	707,379		(83,105)		624,274
Senior Housing - Managed	47	4,924	931,655		(134,056)		797,599
Specialty Hospitals and Other	27	1,193	663,982		(61,909)		602,073
	425	42,378	5,945,669		(639,812)		5,305,857
Corporate Level			817		(402)		415
			$	5,946,486	$	(640,214)	$	5,306,272

Property Type
Number of
Properties

Number of
Beds/Units

Total
Real Estate
at Cost

Accumulated
Depreciation

Total
Real Estate
Investments, Net
Skilled Nursing/Transitional Care 291
32,660
$ 3,678,036
$ (322,645 ) $ 3,355,391
Senior Housing - Leased 64
4,119
693,440
(77,160 ) 616,280
Senior Housing - Managed 47
4,922
920,589
(118,466 ) 802,123
Specialty Hospitals and Other 25
1,193
640,076
(51,114 ) 588,962
427
42,894
5,932,141
(569,385 ) 5,362,756
Corporate Level 779
(367 ) 412
$ 5,932,920
$ (569,752 ) $ 5,363,168

As of December 31, 2019

Property Type
Number of
Properties

Number of
Beds/Units

Total
Real Estate
at Cost

Accumulated
Depreciation

Total
Real Estate
Investments, Net
Skilled Nursing/Transitional Care 296
33,290
$ 3,701,666
$ (306,565 ) $ 3,395,101
Senior Housing - Leased 62
3,820
630,688
(72,278 ) 558,410
Senior Housing - Managed 46
4,809
907,771
(112,893 ) 794,878
Specialty Hospitals and Other 25
1,193
639,721
(47,124 ) 592,597
429
43,112
5,879,846
(538,860 ) 5,340,986
Corporate Level 737
(353 ) 384
$ 5,880,583
$ (539,213 ) $ 5,341,370


Property Type	Number of Properties	Number of Beds/Units	Total Real Estate at Cost		Accumulated Depreciation		Total Real Estate Investments, Net
Skilled Nursing/Transitional Care	296	33,290	$	3,701,666	$	(306,565)	$	3,395,101
Senior Housing - Leased	62	3,820	630,688		(72,278)		558,410
Senior Housing - Managed	46	4,809	907,771		(112,893)		794,878
Specialty Hospitals and Other	25	1,193	639,721		(47,124)		592,597
	429	43,112	5,879,846		(538,860)		5,340,986
Corporate Level			737		(353)		384
			$	5,880,583	$	(539,213)	$	5,341,370

March 31, 2020 December 31, 2019
Building and improvements $ 5,093,517
$ 5,042,435
Furniture and equipment 241,407
239,229
Land improvements 1,535
1,534
Land 596,461
597,385
5,932,920
5,880,583
Accumulated depreciation (569,752 ) (539,213 )
$ 5,363,168
$ 5,341,370


	September 30, 2020		December 31, 2019
Building and improvements	$	5,107,022	$	5,042,435
Furniture and equipment	243,265		239,229
Land improvements	1,917		1,534
Land	594,282		597,385
	5,946,486		5,880,583
Accumulated depreciation	(640,214)		(539,213)
	$	5,306,272	$	5,341,370

As of ~~March 31,~~September 30, 2020,, the substantial majority of the Company’s real estate properties (excluding 47 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from less than one year to 15 years. As of ~~March 31,~~September 30, 2020,, the leases had a weighted-average remaining term of eight years. The leases generally include

provisions to extend the lease terms and other negotiated terms and conditions. The Company, through its subsidiaries, retains substantially all of the risks and benefits of ownership of the real estate assets leased to the tenants. The Company may receive additional security under these operating leases in the form of letters of credit and security deposits from the lessee or guarantees from the parent of the lessee. Security deposits received in cash related to tenant leases are included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets and totaled ~~$10.1~~$11.7 million and $10.5 million as of ~~March 31,~~September 30, 2020 and December 31, 2019, respectively, and letters of credit deposited with the Company totaled approximately ~~$84~~$86 million and $83 million as of ~~March 31,~~September 30, 2020 and December 31, 2019, respectively. In addition, the Company’s tenants have deposited with the Company ~~$17.8~~$15.4 million and $14.3 million as of ~~March 31,~~September 30, 2020 and December 31, 2019, respectively, for future real estate taxes, insurance expenditures and tenant improvements related to the Company’s properties and their operations, and these amounts are included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets.

Lessor costs that are paid by the lessor and reimbursed by the lessee are included in the measurement of variable lease revenue and the associated expense. As a result, the Company recognized ~~$5.2 million and $4.2 million of~~ variable lease revenue and the associated expense of $5.0 million and $15.7 million during the three and nine months ended ~~March 31,~~September 30, 2020, respectively, and $4.0 million and $13.0 million during the three and nine months ended September 30, 2019, respectively.

The Company monitors the creditworthiness of its tenants by reviewing credit ratings (if available) and evaluating the ability of the tenants to meet their lease obligations to the Company based on the tenants’ financial performance, including the evaluation of any parent guarantees (or the guarantees of other related parties) of tenant lease obligations. As formal credit ratings may not be available for most of the Company’s tenants, the primary basis for the Company’s evaluation of the credit quality of its tenants (and more specifically the tenant’s ability to pay their rent obligations to the Company) is the tenant’s lease coverage ratio or the parent’s fixed charge coverage ratio for those entities with a parent guarantee. These coverage ratios include earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”) to rent and earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) to rent at the lease level and consolidated EBITDAR to total fixed charges at the parent guarantor level when such a guarantee exists. The Company obtains various financial and operational information from its tenants each month and reviews this information in conjunction with the above-described coverage metrics to identify financial and operational trends, evaluate the impact of the industry’s operational and financial environment (including the impact of government reimbursement), and evaluate the management of the tenant’s operations. These metrics help the Company identify potential areas of concern relative to its tenants’ credit quality and ultimately the tenant’s ability to generate sufficient liquidity to meet its obligations, including its obligation to continue to pay the rent due to the Company.

~~For~~During the three months ended ~~March 31,~~September 30, 2020, the auditors for Genesis Healthcare, Inc. (“Genesis”) and subsidiaries of Signature Healthcare (“Signature”) that lease facilities from the Company each expressed substantial doubt over the respective abilities of Genesis and Signature to continue as a going concern. Accordingly, the Company concluded that its leases with Genesis and Signature should no longer be accounted for on an accrual basis and wrote off $14.3 million of non-cash rent receivable balances and lease intangibles related to these leases.

For the three and nine months ended September 30, 2020, no tenant relationship represented 10% or more of the Company’s total revenues.

~~The~~As of September 30, 2020, the future minimum rental payments from the Company’s properties held for investment under non-cancelable operating leases were as follows and may materially differ from actual future rental payments received (in thousands):

~~As of March 31, 2020~~

April 1 through December 31, 2020 $ 319,956
2021 427,122
2022 406,769
2023 392,007
2024 383,326
Thereafter 1,742,840
$ 3,672,020


October 1 through December 31, 2020	$	106,516
2021	431,202
2022	412,395
2023	402,083
2024	402,936
Thereafter	1,923,827
	$	3,678,959

Senior Housing - Managed Communities

The Company’s Senior Housing - Managed communities offer residents certain ancillary services that are not contemplated in the lease with each resident (i.e., housekeeping, laundry, guest meals, etc.). These services are provided and paid for in addition to the standard services included in each resident lease (i.e., room and board, standard meals, etc.). The

Company bills residents for ancillary services one month in arrears and recognizes revenue as the services are provided, as the Company has no continuing performance obligation related to those services. Resident fees and services ~~includes~~include ancillary service revenue of $0.3 million and ~~$0.1~~$0.7 million for the three and nine months ended ~~March 31,~~September 30, 2020, respectively, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2019, respectively.

Investment in Unconsolidated Joint Venture

The Company has a 49% equity interest in ~~a joint venture~~the Enlivant Joint Venture with affiliates of Enlivant and TPG Real Estate, the real estate platform of TPG, that owns senior housing communities managed by ~~Enlivant (the “Enlivant Joint Venture”).~~Enlivant. During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the Enlivant Joint Venture sold 212 senior housing communities for aggregate gross proceeds of ~~$3.2~~$18.2 million, and the Company recorded an aggregate net loss on sale of real estate related to unconsolidated joint venture of ~~$1.7~~$3.3 million. As of ~~March 31,~~September 30, 2020, the Enlivant Joint Venture owned ~~168~~158 senior housing communities, and the book value of the Company’s investment in the Enlivant Joint Venture was ~~$311.8~~$293.8 million.

Net Investment in Direct Financing Lease

As of ~~March 31,~~September 30, 2020, the Company had a ~~$23.8~~$24.1 million net investment in 1 skilled nursing/transitional care facility leased to an operator under a direct financing lease, as the tenant is obligated to purchase the property at the end of the lease term. The net investment in direct financing lease is recorded in accounts receivable, prepaid expenses and other assets, net on the accompanying condensed consolidated balance sheets and represents the present value of total rental payments of ~~$3.5~~$2.8 million, plus the estimated ~~unguaranteed residual value~~purchase price of ~~$24.7~~$24.8 million, less the unearned lease income of ~~$4.2~~$3.3 million and allowance for credit losses of $0.2 million as of ~~March 31,~~September 30, 2020. Unearned lease income represents the excess of the minimum lease payments and residual value over the cost of the investment. Unearned lease income is deferred and amortized to income over the lease term to provide a constant yield when collectability of the lease payments is reasonably assured. Income from the Company’s net investment in direct financing lease was ~~$0.6~~$0.7 million and $2.0 million for ~~each of~~ the three and nine months ended ~~March 31,~~September 30, 2020, respectively, and $0.7 million and $2.0 million for the three and nine months ended September 30, 2019, respectively, and is reflected in interest and other income on the accompanying condensed consolidated statements of income. Upon adoption of Topic 326 on January 1, 2020 and as of the adoption date, the Company recorded a $0.2 million reduction in equity and increase to its allowance for credit losses due to the cumulative effect of the changes contemplated by Topic 326. During the three and nine months ended ~~March 31,~~September 30, 2020, the Company reduced its allowance for credit losses by ~~$16,000.~~$1,000 and $38,000, respectively. Future minimum lease payments contractually due under the direct financing lease at ~~March 31,~~September 30, 2020 were as follows: ~~$1.7~~$0.6 million for the remainder of 2020, ~~and $2.1~~$2.3 million for ~~2021.~~2021 and $0.1 million for 2022.

5. IMPAIRMENT OF REAL ESTATE ~~ASSETS HELD FOR SALE~~ AND DISPOSITIONS

~~Assets~~Asset Held ~~For~~for Sale

As of ~~March 31,~~September 30, 2020, the Company determined that 21 skilled nursing/transitional care ~~facilities,~~facility with ~~an aggregate~~a net book value of ~~$11.3 million and secured debt, net balance of $13.8~~$8.9 million met the criteria to be classified as ~~assets/liabilities~~an asset held for sale, and ~~these balances are~~this balance is included in accounts receivable, prepaid expenses and other assets, net ~~and accounts payable and accrued liabilities, respectively,~~ on the condensed consolidated balance sheets. Subsequent to ~~March 31,~~September 30, 2020, the Company completed the sale of the ~~facilities~~facility for ~~an aggregate~~a gross sales price of ~~$14.4~~$9.0 million.

Impairment of Real Estate

During the nine months ended September 30, 2020, the Company recognized a $3.2 million real estate impairment related to 3 senior housing communities and ~~the proceeds were used to repay the outstanding debt secured by the facilities.~~1 skilled nursing/transitional care facility.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the Company completed the sale of 37 skilled nursing/transitional care facilities for aggregate consideration, net of closing costs, of ~~$6.8~~$41.1 million. The net carrying value of the assets and liabilities of these facilities was ~~$7.0~~$38.3 million, which resulted in an aggregate ~~$0.2~~$2.8 million net ~~loss~~gain on sale.

~~Excluding~~During the nine months ended September 30, 2020, the Company recognized $3.9 million of net ~~loss~~income, which includes the $2.8 million net gain on sale, and ~~real estate impairment,~~during the ~~Company~~nine months ended September 30, 2019, recognized ~~$0.1~~$11.0 million of net loss, ~~and $5,000~~which includes $12.8 million of ~~net income during the three months ended March 31, 2020 and 2019, respectively,~~real estate impairment, in each case from these facilities. The sale of these facilities does not represent a strategic shift that has or will have a major effect on the Company’s operations and financial results, and therefore the results of operations attributable to these facilities have remained in continuing operations.

Impairment of Real Estate

During the ~~three~~nine months ended ~~March 31,~~September 30, 2019, the Company recognized a ~~$103.1~~$119.1 million real estate impairment, of which ~~$92.2~~$95.2 million related to the 30 Senior Care Centers facilities ~~which were subsequently~~that the Company sold and 1 additional Senior Care Centers facility that the Company transitioned to another operator, and the remaining ~~$10.9~~$23.9 million related to 45 additional skilled nursing/transitional care facilities ~~which~~that were subsequently ~~sold.~~sold and 4 senior housing communities.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2019, the Company completed the sale of 331 skilled nursing/transitional care facilities and 7 senior housing communities for aggregate consideration, net of closing costs, of ~~$6.9~~$315.0 million. The net carrying value of the assets and liabilities of these facilities was ~~$8.4~~$313.8 million, which resulted in an aggregate ~~$1.5~~$1.2 million net ~~loss~~gain on sale.

~~Excluding~~During the ~~net loss on sale,~~nine months ended September 30, 2019, the Company recognized ~~$0.5~~$65.1 million of net ~~income during~~loss, which includes the ~~three months ended March 31, 2019~~$1.2 million net gain on sale and $69.1 million of real estate impairment, from these facilities. The sale of these facilities does not represent a strategic shift that has or will have a major effect on the Company’s operations and financial results, and therefore the results of operations attributable to these facilities have remained in continuing operations.

6. LOANS RECEIVABLE AND OTHER INVESTMENTS

As of ~~March 31,~~September 30, 2020 and December 31, 2019, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):


									September 30, 2020
Investment	Quantity as of September 30, 2020	Property Type	Principal Balance as of September 30, 2020 (1)		Book Value as of September 30, 2020		Book Value as of December 31, 2019		Weighted Average Contractual Interest Rate / Rate of Return		Weighted Average Annualized Effective Interest Rate / Rate of Return		Maturity Date as of September 30, 2020
Loans Receivable:
Mortgage	1	Specialty Hospital	$	19,000	$	19,000	$	19,000	10.0	%	10.0	%	01/31/27
Construction	1	Senior Housing	3,343		3,353		2,487		8.0	%	7.8	%	09/30/22



Other	17	Multiple	43,973		40,010		42,147		6.8	%	6.9	%	03/01/21- 08/31/28
	19		66,316		62,363		63,634		7.8	%	7.9	%
Allowance for loan losses			—		(1,287)		(564)
			$	66,316	$	61,076	$	63,070
Other Investments:
Preferred Equity	6	Skilled Nursing / Senior Housing	42,533		42,744		44,304		11.3	%	11.3	%	N/A
Total	25		$	108,849	$	103,820	$	107,374	9.2	%	9.3	%

March 31, 2020
Investment
Quantity
as of
March 31,
2020
Property Type
Principal Balance
as of
March 31,
2020 ⁽¹⁾

Book Value
as of
March 31,
2020

Book Value
as of
December 31, 2019
Weighted Average Contractual Interest Rate / Rate of Return Weighted Average Annualized Effective Interest Rate / Rate of Return
Maturity Date
as of
March 31,
2020
Loans Receivable:
Mortgage 1
Specialty Hospital $ 19,000
$ 19,000
$ 19,000
10.0 % 10.0 % 01/31/27
Construction 1
Senior Housing 2,518
2,537
2,487
8.0 % 7.8 % 09/30/22
Other 17
Multiple 46,027
42,081
42,147
6.8 % 6.9 % 09/01/20- 08/31/28

19
67,545
63,618
63,634
7.7 % 7.9 %

Allowance for loan losses —
(1,225 ) (564 )

$ 67,545
$ 62,393
$ 63,070

Other Investments:
Preferred Equity 6
Skilled Nursing / Senior Housing 25,793
25,977
44,304
12.4 % 12.4 % N/A

Total 25
$ 93,338
$ 88,370
$ 107,374
9.0 % 9.2 %

As of ~~both March 31,~~September 30, 2020 and December 31, 2019, the Company had 4 loans receivable investments, with an aggregate principal balance of $2.2 million and $2.3 million, respectively, that were considered to have deteriorated credit quality. As of ~~March 31,~~September 30, 2020 and December 31, 2019, the book value of the outstanding loans with deteriorated credit quality was ~~$0.7~~$0.6 million and $0.8 million, respectively.

The following table presents changes in the accretable yield for the three and nine months ended ~~March 31,~~September 30, 2020 and 2019 (in thousands):

Three Months Ended March 31,
2020 2019
Accretable yield, beginning of period $ 39
$ 449
Accretion recognized in earnings (8 ) (218 )
Reduction due to payoff —
(33 )
Accretable yield, end of period $ 31
$ 198

During the three months ended ~~March 31,~~September 30, 2020, the Company decreased its allowance for loan losses by $0.1 million, and during the nine months ended September 30, 2020, the Company increased its allowance for loan losses by $0.7 million.

As of ~~March 31,~~September 30, 2020, the Company had a ~~$1.2~~$1.3 million allowance for loan losses. As of ~~March 31, 2020, the Company did 0t consider any loans receivable investments to be impaired. As of March 31,~~September 30, 2020, 2 loans receivable investments with 0 book value were on nonaccrual status. As of ~~March 31,~~September 30, 2020, the Company did not consider any preferred equity investments to be impaired, and no preferred equity investments were on nonaccrual status.

As of December 31, 2019, the Company had 0 asset-specific loan loss reserve and a $0.6 million portfolio-based loan loss reserve. As of December 31, 2019, the Company did 0t consider any loans receivable investments to be impaired. As of December 31, 2019, 2 loans receivable investments with 0 book value were on nonaccrual status. As of December 31, 2019, the Company did not consider any preferred equity investments to be impaired, and no preferred equity investments were on nonaccrual status.

During the three months ended ~~March 31,~~September 30, 2019, the Company recorded 0 provision for specific loan losses, and during the nine months ended September 30, 2019, the Company recorded a $1.2 million provision for specific loan ~~losses~~losses. During the three and ~~recorded a $27,000 reduction to~~nine months ended September 30, 2019, the Company increased its ~~provision for~~ portfolio-based ~~loan losses.~~loss reserve by $0.1 million and $0.2 million, respectively.

Secured Indebtedness

The Company’s secured debt consists of the following (dollars in thousands):


Interest Rate Type	Principal Balance as of September 30, 2020 (1)		Principal Balance as of December 31, 2019 (1)		Weighted Average Interest Rate at September 30, 2020 (2)		Maturity Date
Fixed Rate	$	80,124	$	114,777	3.68	%	December 2021 - August 2051

(1) Principal balance does not include deferred financing costs, net of $1.1 million and $1.7 million as of September 30, 2020 and December 31, 2019, respectively.

(2) Weighted average interest rate includes private mortgage insurance.

Interest Rate Type
Principal Balance as of
March 31, 2020 ⁽¹⁾⁽²⁾

Principal Balance as of
December 31, 2019⁽¹⁾

Weighted Average
Interest Rate at
March 31, 2020 ⁽³⁾

Maturity
Date
Fixed Rate $ 98,362
$ 114,777
3.47 % December 2021 -
August 2051
On April 1, 2020, the Company sold 2 facilities that secured an aggregate $14.2 million of debt, which was assumed by the buyer of the facilities. On August 1, 2020, the Company sold 1 facility that secured $17.6 million of debt, which was assumed by the buyer of the facility.

Senior Unsecured Notes

The Company’s senior unsecured notes consist of the following (dollars in thousands):


		Principal Balance as of
Title	Maturity Date	September 30, 2020 (1)		December 31, 2019 (1)
4.80% senior unsecured notes due 2024 (“2024 Notes”)	June 1, 2024	$	300,000	$	300,000
5.125% senior unsecured notes due 2026 (“2026 Notes”)	August 15, 2026	500,000		500,000
5.88% senior unsecured notes due 2027 (“2027 Notes”)	May 17, 2027	100,000		100,000
3.90% senior unsecured notes due 2029 (“2029 Notes”)	October 15, 2029	350,000		350,000
		$	1,250,000	$	1,250,000

(1)

Principal Balance as of
Title Maturity Date
March 31, 2020 ⁽¹⁾

December 31, 2019 ⁽¹⁾

4.80% senior unsecured notes due 2024 (“2024 Notes”) June 1, 2024 $ 300,000
$ 300,000
5.125% senior unsecured notes due 2026 (“2026 Notes”) August 15, 2026 500,000
500,000
5.88% senior unsecured notes due 2027 (“2027 Notes”) May 17, 2027 100,000
100,000
3.90% senior unsecured notes due 2029 (“2029 Notes”) October 15, 2029 350,000
350,000
$ 1,250,000
$ 1,250,000

Principal balance does not include premium, net of $6.7 million and deferred financing costs, net of $8.4 million as of September 30, 2020 and does not include premium, net of $7.6 million and deferred financing costs, net of $8.8 million as of December 31, 2019.

The 2024 Notes and the 2029 Notes were issued by the Operating Partnership and Sabra Capital Corporation, wholly owned subsidiaries of the Company, and accrue interest at a rate of 4.80% and 3.90%, respectively, per annum. Interest is payable semiannually on June 1 and December 1 of each year for the 2024 Notes and on April 15 and October 15 of each year for the 2029 Notes.

The 2026 Notes and the 2027 Notes were assumed as a result of the Company’s merger with Care Capital Properties, Inc. in 2017 and accrue interest at a rate of 5.125% and 5.88%, respectively, per annum. Interest is payable semiannually on February 15 and August 15 of each year for the 2026 Notes and on May 17 and November 17 of each year for the 2027 Notes.

The obligations under the 2024 Notes and 2027 Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and one of its non-operating subsidiaries, subject to release under certain customary circumstances. The obligations under the 2026 Notes and 2029 Notes are fully and unconditionally guaranteed, on an unsecured basis, by Sabra; provided, however, that such guarantee is subject to release under certain customary circumstances. See Note 12, “Summarized Condensed Consolidating Information,” for additional information concerning the circumstances pursuant to which the guarantors will be automatically and unconditionally released from their obligations under the guarantees.

The indentures and agreements (the “Senior Notes Indentures”) governing the 2024 Notes, 2026 Notes, 2027 Notes and 2029 Notes (collectively, the “Senior Notes”) include customary events of default and require the Company to comply with specified restrictive covenants. As of ~~March 31,~~September 30, 2020, the Company was in compliance with all applicable financial covenants under the Senior Notes Indentures.

On September 9, 2019, the Operating Partnership and Sabra Canadian Holdings, LLC (together, the “Borrowers”), Sabra and the other parties thereto entered into a fifth amended and restated unsecured credit agreement (the “Credit Agreement”).

The Credit Agreement includes a $1.0 billion revolving credit facility (the “Revolving Credit Facility”), ~~$1.1 billion~~$955.0 million in U.S. dollar term loans ~~(of which $955.0 million was outstanding as of March 31, 2020)~~ and a CAD $125.0 million Canadian dollar term loan (collectively, the “Term Loans”). Further, up to $175.0 million of the Revolving Credit Facility may be used

for borrowings in certain foreign currencies. The Credit Agreement also contains an accordion feature that can increase the total available borrowings to $2.75 billion, subject to terms and conditions.

The Revolving Credit Facility has a maturity date of September 9, 2023, and includes 2 six-month extension options. $105.0 million of the U.S. dollar Term Loans has a maturity date of September 9, 2022, $350.0 million of the U.S. dollar Term Loans has a maturity date of September 9, 2023, and the other Term Loans have a maturity date of September 9, 2024.

As of ~~March 31,~~September 30, 2020, there was ~~$101.0~~$56.0 million outstanding under the Revolving Credit Facility and ~~$899.0~~$944.0 million available for borrowing.

Borrowings under the Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) LIBOR or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, and (iii) one-month LIBOR plus 1.0% (the “Base Rate”). The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings, as defined in the Credit Agreement, and will range from 0.775% to 1.45% per annum for LIBOR based borrowings and 0.00% to 0.45% per

annum for borrowings at the Base Rate. As of ~~March 31,~~September 30, 2020, the interest rate on the Revolving Credit Facility was ~~2.09%~~1.25%. In addition, the Operating Partnership pays a facility fee ranging between 0.125% and 0.300% per annum based on the aggregate amount of commitments under the Revolving Credit Facility regardless of amounts outstanding thereunder.

The U.S. dollar Term Loans bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) LIBOR or (b) the Base Rate. The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings and will range from 0.85% to 1.65% per annum for LIBOR based borrowings and 0.00% to 0.65% per annum for borrowings at the Base Rate. The Canadian dollar Term Loan bears interest on the outstanding principal amount at a rate equal to the Canadian Dollar Offered Rate (“CDOR”) plus an interest margin that ranges from 0.85% to 1.65% depending on the Debt Ratings.

The Company has interest rate swaps that fix the LIBOR portion of the interest rate for $845.0 million of LIBOR-based borrowings under its U.S. dollar Term Loans at a weighted average rate of ~~1.19%~~1.24% and an interest rate ~~swaps~~swap that ~~fix~~fixes the CDOR portion of the interest rate for $125.0 million of CDOR-based borrowings under its Canadian dollar Term Loan at a ~~weighted average~~ rate of ~~1.41%~~0.93%. In addition, CAD $125.0 million of the Canadian dollar Term Loan is designated as a net investment hedge. See Note 8, “Derivative and Hedging Instruments,” for further information.

The obligations of the Borrowers under the Credit Agreement are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and one of its non-operating subsidiaries, subject to release under certain customary circumstances.

The Credit Agreement contains customary covenants that include restrictions or limitations on the ability to pay dividends, incur additional indebtedness, engage in non-healthcare related business activities, enter into transactions with affiliates and sell or otherwise transfer certain assets as well as customary events of default. The Credit Agreement also requires Sabra, through the Operating Partnership, to comply with specified financial covenants, which include a maximum total leverage ratio, a minimum secured debt leverage ratio, a minimum fixed charge coverage ratio, a maximum unsecured leverage ratio, a minimum tangible net worth requirement and a minimum unsecured interest coverage ratio. As of ~~March 31,~~September 30, 2020, the Company was in compliance with all applicable financial covenants under the Credit Agreement.

The Company incurred interest expense of ~~$25.7~~$24.9 million and ~~$36.3~~$75.9 million during the three and nine months ended ~~March 31,~~September 30, 2020, respectively, and $29.3 million and $99.2 million during the three and nine months ended September 30, 2019, respectively. Interest expense includes non-cash interest expense of ~~$2.2~~$2.1 million and ~~$2.6~~$6.5 million for the three and nine months ended ~~March 31,~~September 30, 2020, respectively, and $2.5 million and $7.8 million for the three and nine months ended September 30, 2019, respectively. As of ~~March 31,~~September 30, 2020 and December 31, 2019,, the Company had ~~$18.6~~$18.1 million and $16.7 million, respectively, of accrued interest included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets.

The following is a schedule of maturities for the Company’s outstanding debt as of ~~March 31,~~September 30, 2020 (in thousands):


	Secured Indebtedness		Revolving Credit Facility (1)		Term Loans		Senior Notes		Total
October 1 through December 31, 2020	$	655	$	0	$	0	$	0	$	655
2021	17,689		0		0		0		17,689
2022	2,412		0		105,000		0		107,412
2023	2,478		56,000		350,000		0		408,478
2024	2,545		0		593,538		300,000		896,083
Thereafter	54,345		0		0		950,000		1,004,345
Total Debt	80,124		56,000		1,048,538		1,250,000		2,434,662
Premium, net	0		0		0		6,740		6,740
Deferred financing costs, net	(1,149)		0		(8,853)		(8,416)		(18,418)
Total Debt, Net	$	78,975	$	56,000	$	1,039,685	$	1,248,324	$	2,422,984

(1) Revolving Credit Facility is subject to 2 six-month extension options.

Secured
Indebtedness⁽¹⁾

Revolving Credit
Facility ⁽²⁾
Term Loans Senior Notes Total
April 1 through December 31, 2020 $ 2,387
$ —
$ —
$ —
$ 2,387
2021 17,205
—
—
—
17,205
2022 2,816
—
105,000
—
107,816
2023 2,898
101,000
350,000
—
453,898
2024 2,983
—
588,212
300,000
891,195
Thereafter 70,073
—
—
950,000
1,020,073
Total Debt 98,362
101,000
1,043,212
1,250,000
2,492,574
Premium, net —
—
—
7,325
7,325
Deferred financing costs, net (1,296 ) —
(10,102 ) (9,155 ) (20,553 )
Total Debt, Net $ 97,066
$ 101,000
$ 1,033,110
$ 1,248,170
$ 2,479,346

8. DERIVATIVE AND HEDGING INSTRUMENTS

The Company is exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign exchange rates. The Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and foreign exchange rates. The Company’s derivative financial instruments are used to manage differences in the amount of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value in the Company’s functional currency, the U.S. dollar, of the Company’s investment in foreign operations, the cash receipts and payments related to these foreign operations and payments of interest and principal under Canadian dollar denominated debt. The Company enters into derivative financial instruments to protect the value of its foreign investments and fix a portion of the interest payments for certain debt obligations. The Company does not enter into derivatives for speculative purposes.

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy. In May 2019, the Company terminated 3 forward starting interest rate swaps, resulting in a payment to counterparties totaling $12.6 million. The balance of the loss in other comprehensive income will be reclassified to earnings through 2029. As of ~~March 31,~~September 30, 2020, approximately ~~$10.2~~$12.5 million of losses, which are included in accumulated other comprehensive income, are expected to be reclassified into earnings in the next 12 months.

Net Investment Hedges

The Company is exposed to fluctuations in foreign exchange rates on investments it holds in Canada. The Company uses cross currency interest rate swaps to hedge its exposure to changes in foreign exchange rates on these foreign investments.

The following presents the notional amount of derivative instruments as of the dates indicated (in thousands):

March 31, 2020 December 31, 2019
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars ⁽¹⁾
$ 1,740,000
$ 1,490,000
Denominated in Canadian Dollars ⁽²⁾
$ 250,000
$ 125,000

Derivatives designated as net investment hedges:
Denominated in Canadian Dollars $ 54,301
$ 54,489

Financial instrument designated as net investment hedge:
Denominated in Canadian Dollars $ 125,000
$ 125,000

Derivatives not designated as net investment hedges:
Denominated in Canadian Dollars $ 1,999
$ 1,811


	September 30, 2020		December 31, 2019
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars (1)	$	1,340,000	$	1,490,000
Denominated in Canadian Dollars (2)	$	250,000	$	125,000
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	53,239	$	54,489
Financial instrument designated as net investment hedge:
Denominated in Canadian Dollars	$	125,000	$	125,000
Derivatives not designated as net investment hedges:
Denominated in Canadian Dollars	$	3,061	$	1,811

⁽¹⁾Balance includes ~~4 forward starting interest rate~~ swaps ~~and 1 forward starting interest rate collar~~ with an ~~effective date~~aggregate notional value of ~~August 2020~~$400.0 million, which accretes to $600.0 million in January 2023, and 2 forward starting interest rate swaps and 1 forward starting interest rate collar with an effective date of January 2021. The forward starting interest rate swaps and forward starting interest rate ~~collars~~collar have an aggregate ~~initial~~ notional amount of ~~$645.0 million accreting to $845.0 million in January 2023.~~$245.0 million. Balance as of ~~March 31,~~September 30, 2020 also includes 6 forward starting interest rate swaps with an effective date of May 2024 and an aggregate notional amount of $250.0 million.

⁽²⁾ Balance as of September 30, 2020 includes 2 forward starting interest rate swaps with an effective date of January 2021 and an aggregate notional amount of CAD $125.0 million.

Derivative and Financial Instruments Designated as Hedging Instruments

The following is a summary of the derivative and financial instruments designated as hedging instruments held by the Company at ~~March 31,~~September 30, 2020 and December 31, 2019 (dollars in thousands):

Count as of March 31, 2020 Fair Value Maturity Dates
Type Designation March 31, 2020 December 31, 2019 Balance Sheet Location
Assets:
Interest rate swaps Cash flow —
$ —
$ 4,239
N/A Accounts receivable, prepaid expenses and other assets, net
Forward starting interest rate swaps Cash flow 4
549
—
2034 Accounts receivable, prepaid expenses and other assets, net
Cross currency interest rate swaps Net investment 2
7,525
3,238
2025 Accounts receivable, prepaid expenses and other assets, net
$ 8,074
$ 7,477

Liabilities:
Interest rate swaps Cash flow 12
$ 8,831
$ —
2020-2023 Accounts payable and accrued liabilities
Forward starting interest rate swaps Cash flow 10
$ 27,055
$ 494
2024-2034 Accounts payable and accrued liabilities
Forward starting interest rate collars Cash flow 2
2,525
132
2024 Accounts payable and accrued liabilities
CAD term loan Net investment 1
88,213
96,025
2024 Term loans, net
$ 126,624
$ 96,651


		Count as of September 30, 2020	Fair Value				Maturity Dates
Type	Designation		September 30, 2020		December 31, 2019			Balance Sheet Location
Assets:

Interest rate swaps	Cash flow	0	$	0	$	4,239	N/A	Accounts receivable, prepaid expenses and other assets, net
Forward starting interest rate swaps	Cash flow	6	3,840		0		2034	Accounts receivable, prepaid expenses and other assets, net
Cross currency interest rate swaps	Net investment	2	4,633		3,238		2025	Accounts receivable, prepaid expenses and other assets, net
			$	8,473	$	7,477
Liabilities:
Interest rate swaps	Cash flow	11	$	28,494	$	0	2021- 2024	Accounts payable and accrued liabilities
Forward starting interest rate swaps	Cash flow	4	10,742		494		2024	Accounts payable and accrued liabilities
Forward starting interest rate collars	Cash flow	1	902		132		2024	Accounts payable and accrued liabilities
CAD term loan	Net investment	1	93,538		96,025		2024	Term loans, net
			$	133,676	$	96,651

The following presents the effect of the Company’s derivative and financial instruments designated as hedging instruments on the condensed consolidated statements of income and the condensed consolidated statements of equity for the three and nine months ended ~~March 31,~~September 30, 2020 and 2019 (in thousands):

(Loss) Gain Recognized in Other Comprehensive (Loss) Income
Three Months Ended March 31,
2020 2019 Income Statement Location

Cash Flow Hedges:
Interest rate products $ (40,475 ) $ (11,611 ) Interest expense
Net Investment Hedges:
Foreign currency products 4,187
(1,234 ) N/A
CAD term loan 7,813
(1,925 ) N/A

$ (28,475 ) $ (14,770 )


	Gain (Loss) Recognized in Other Comprehensive Income (Loss)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019		Income Statement Location
Cash Flow Hedges:
Interest rate products	$	3,836	$	(8,196)	$	(42,826)	$	(27,933)	Interest expense
Net Investment Hedges:
Foreign currency products	(1,044)		1,273		1,544		(3)		N/A
CAD term loan	(1,913)		1,088		2,488		(2,700)		N/A
	$	879	$	(5,835)	$	(38,794)	$	(30,636)

Gain Reclassified from Accumulated Other Comprehensive Income into Income
Three Months Ended March 31,
2020 2019 Income Statement Location

Cash Flow Hedges:
Interest rate products $ 237
$ 1,913
Interest expense


	(Loss) Gain Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019		Income Statement Location
Cash Flow Hedges:
Interest rate products	$	(2,985)	$	1,173	$	(5,148)	$	4,781	Interest expense

During the three and nine months ended ~~March 31,~~September 30, 2020 and 2019, 0 cash flow hedges were determined to be ineffective.

Derivatives Not Designated as Hedging Instruments

As of ~~March 31,~~September 30, 2020, the Company had 1 outstanding cross currency interest rate swap, of which a portion was not designated as a hedging instrument, in an asset position with a fair value of $0.3 million and included this amount in accounts receivable, prepaid expenses and other assets, net on the condensed consolidated balance sheets. During the three and nine months ended ~~March 31,~~September 30, 2020, the Company recorded ~~$0.2~~$0.1 million of other expense and $13,000 of other income, respectively, related to this portion of the derivative not designated as a hedging instrument. During the three and nine months

Table of Contents~~three~~ ~~months~~

ended ~~March 31,~~September 30, 2019, the Company recorded ~~$6,000~~$38,000 and $31,000, respectively, of other ~~expense~~income related to a portion of a cross currency interest rate swap not designated as a hedging instrument.

Offsetting Derivatives

The Company enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of ~~March 31,~~September 30, 2020 and December 31, 2019 (in thousands):


	As of September 30, 2020
	Gross Amounts of Recognized Assets / Liabilities		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets / Liabilities presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet
							Financial Instruments		Cash Collateral Received		Net Amount
Offsetting Assets:
Derivatives	$	8,473	$	0	$	8,473	$	(7,405)	$	0	$	1,068
Offsetting Liabilities:
Derivatives	$	40,138	$	0	$	40,138	$	(7,405)	$	0	$	32,733

As of December 31, 2019
Gross Amounts of Recognized Assets / Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Assets / Liabilities presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet
Financial Instruments Cash Collateral Received Net Amount
Offsetting Assets:
Derivatives $ 7,477
$ —
$ 7,477
$ (544 ) $ —
$ 6,933
Offsetting Liabilities:
Derivatives $ 626
$ —
$ 626
$ (544 ) $ —
$ 82

~~Credit-risk-related~~Credit Risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision pursuant to which the Company could be declared in default on the derivative obligation if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender. As of ~~March 31,~~September 30, 2020, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was ~~$31.1~~$34.3 million. As of ~~March 31,~~September 30, 2020, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions at ~~March 31,~~September 30, 2020, it could have been required to settle its obligations under the agreements at their termination value of ~~$30.3~~$32.7 million.

9. FAIR VALUE DISCLOSURES

Financial Instruments

The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments.

Financial instruments for which actively quoted prices or pricing parameters are available and whose markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments whose markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The carrying values of cash and cash equivalents, restricted cash, accounts payable, accrued liabilities and the Credit Agreement are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for other financial instruments are derived as follows:

Loans receivable: These instruments are presented on the accompanying condensed consolidated balance sheets at their amortized cost and not at fair value. The fair values of the loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans receivable, as well as the underlying collateral value and other credit

enhancements as applicable. The Company utilized discount rates ranging from 6% to ~~25%~~16% with a weighted average rate of ~~15%~~12% in its fair value calculation. As such, the Company classifies these instruments as Level 3.

Preferred equity investments: These instruments are presented on the accompanying condensed consolidated balance sheets at their cost and not at fair value. The fair values of the preferred equity investments were estimated using an internal valuation model that considered the expected future cash flows for the preferred equity investments, the underlying collateral value and other credit enhancements. The Company utilized discount rates ranging from ~~12%~~10% to 15% with a weighted average rate of ~~12%~~11% in its fair value calculation. As such, the Company classifies these instruments as Level 3.

Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying condensed consolidated balance sheets. The Company estimates the fair value of derivative instruments, including its interest rate swaps and cross currency swaps, using the assistance of a third party using inputs that are observable in the market, which include forward yield curves and other relevant information. Although the Company has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivative financial instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. As a result, the Company has determined that its derivative financial instruments valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Senior Notes: These instruments are presented on the accompanying condensed consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Senior Notes were determined using third-party market quotes derived from orderly trades. As such, the Company classifies these instruments as Level 2.

Secured indebtedness: These instruments are presented on the accompanying condensed consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Company’s secured debt were estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. The Company utilized rates ranging from 3%2% to 4%3% with a weighted average rate of 3% in its fair value calculation. As such, the Company classifies these instruments as Level 3.

The following are the face values, carrying amounts and fair values of the Company’s financial instruments as of ~~March 31,~~September 30, 2020 and December 31, 2019 whose carrying amounts do not approximate their fair value (in thousands):


	September 30, 2020						December 31, 2019
	Face Value (1)		Carrying Amount (2)		Fair Value		Face Value (1)		Carrying Amount (2)		Fair Value
Financial assets:
Loans receivable	$	66,316	$	61,076	$	56,956	$	67,527	$	63,070	$	59,832
Preferred equity investments	42,533		42,744		43,039		43,893		44,304		44,493
Financial liabilities:
Senior Notes	1,250,000		1,248,324		1,311,354		1,250,000		1,248,773		1,328,714
Secured indebtedness	80,124		78,975		79,249		114,777		113,070		105,510

March 31, 2020 December 31, 2019

Face
Value ⁽¹⁾

Carrying
Amount ⁽²⁾

Fair
Value

Face
Value ⁽¹⁾

Carrying
Amount ⁽²⁾

Fair
Value
Financial assets:
Loans receivable $ 67,545
$ 62,393
$ 53,985
$ 67,527
$ 63,070
$ 59,832
Preferred equity investments 25,793
25,977
26,186
43,893
44,304
44,493
Financial liabilities:
Senior Notes 1,250,000
1,248,170
1,176,155
1,250,000
1,248,773
1,328,714
Secured indebtedness 98,362
97,066
94,383
114,777
113,070
105,510

⁽¹⁾

(2) Carrying amount represents the book value of financial instruments, including unamortized premiums/discounts and deferred financing costs.

Table of Contents

The Company determined the fair value of financial instruments as of ~~March 31,~~September 30, 2020 whose carrying amounts do not approximate their fair value with valuation methods utilizing the following types of inputs (in thousands):

Fair Value Measurements Using

Quoted Prices in Active Markets for Identical Assets
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
Total
Financial assets:
Loans receivable $ 53,985
$ —
$ —
$ 53,985
Preferred equity investments 26,186
—
—
26,186
Financial liabilities:
Senior Notes 1,176,155
—
1,176,155
—
Secured indebtedness 94,383
—
—
94,383


			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	Total
Financial assets:
Loans receivable	$	56,956	$	0	$	0	$	56,956
Preferred equity investments	43,039		0		0		43,039
Financial liabilities:
Senior Notes	1,311,354		0		1,311,354		0
Secured indebtedness	79,249		0		0		79,249

Disclosure of the fair value of financial instruments is based on pertinent information available to the Company at the applicable dates and requires a significant amount of judgment. ~~Despite increased capital market and credit market activity, transaction~~Transaction volume for certain of the Company’s financial instruments remains relatively ~~low. This~~low, which has made the estimation of fair values ~~difficult and, therefore,~~difficult. Therefore, both the actual results and the Company’s estimate of fair value at a future date could be materially different.

Items Measured at Fair Value on a Recurring Basis

During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the Company recorded the following amounts measured at fair value (in thousands):


			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	Total
Recurring Basis:
Financial assets:

Forward starting interest rate swaps	$	3,840	$	0	$	3,840	$	0
Cross currency interest rate swaps	4,633		0		4,633		0

Financial liabilities:
Interest rate swaps	28,494		0		28,494		0
Forward starting interest rate swaps	10,742		0		10,742		0
Forward starting interest rate collars	902		0		902		0

Fair Value Measurements Using

Quoted Prices in Active Markets for Identical Assets
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
Total
Recurring Basis:
Financial assets:
Forward starting interest rate swaps 549
—
549
—
Cross currency interest rate swaps 7,525
—
7,525
—
Financial liabilities:
Interest rate swaps 8,831
—
8,831
—
Forward starting interest rate swaps 27,055
—
27,055
—
Forward starting interest rate collars 2,525
—
2,525
—

On December 11, 2019, the Company established an at-the-market equity offering program (the “ATM Program”) pursuant to which shares of its common stock having an aggregate gross sales price of up to $400.0 million may be sold from time to time (i) by the Company through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares at the time the agreement is effective, but defer receiving the proceeds from the sale of the shares until a later date. The Company may also elect to cash settle or net share settle all or a portion of its obligations under any forward sale agreement.

During the three months ended ~~March 31,~~September 30, 2020, the Company sold ~~0.2~~1.4 million shares under the ATM Program at an average price of ~~$20.33~~$15.70 per share, generating gross proceeds of ~~$3.9~~$21.4 million, before ~~$58,000~~$0.3 million of commissions. During the nine months ended September 30, 2020, the Company sold 1.6 million shares under the ATM Program at an average price of

$16.26 per share, generating gross proceeds of $25.3 million, before $0.4 million of commissions. As of ~~March 31,~~September 30, 2020, the Company has not utilized the forward feature of the ATM Program and had ~~$336.1~~$314.7 million available under the ATM Program.

The following table lists the cash dividends on common stock declared and paid by the Company during the ~~three~~nine months ended ~~March 31, 2020~~:September 30, 2020:

Declaration Date Record Date Amount Per Share Dividend Payable Date
February 4, 2020 February 14, 2020 $ 0.45
February 28, 2020

Declaration Date

Record Date

Amount Per Share

Dividend Payable Date

February 4, 2020

February 14, 2020

0.45

February 28, 2020

May 6, 2020

May 18, 2020

0.30

May 29, 2020

August 5, 2020

August 17, 2020

0.30

August 31, 2020

During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the Company issued ~~161,338~~164,224 shares of common stock as a result of restricted stock unit vestings.

Upon any payment of shares to employees as a result of restricted stock unit vestings, the employees’ related tax withholding obligation will generally be satisfied by the Company, reducing the number of shares to be delivered by a number of shares necessary to satisfy the related applicable tax withholding obligation. During the ~~three~~nine months ended ~~March 31,~~September 30, 2020 and 2019, the Company incurred $0.9 million and $1.3 million, respectively, in tax withholding obligations on behalf of its employees that were satisfied through a reduction in the number of shares delivered to those participants.

Accumulated Other Comprehensive Loss

The following is a summary of the Company’s accumulated other comprehensive loss (in thousands):

11. EARNINGS PER COMMON SHARE

The following table illustrates the computation of basic and diluted earnings per share for the three and nine months ended ~~March 31,~~September 30, 2020 and 2019 (in thousands, except share and per share amounts):

Three Months Ended March 31,
2020 2019
Numerator
Net income (loss) attributable to common stockholders $ 35,217
$ (77,704 )

Denominator
Basic weighted average common shares and common equivalents 205,395,330
178,385,984
Dilutive restricted stock units 610,955
—

Diluted weighted average common shares 206,006,285
178,385,984

Net income (loss) attributable to common stockholders, per:

Basic common share $ 0.17
$ (0.44 )

Diluted common share $ 0.17
$ (0.44 )


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator
Net income attributable to common stockholders	$	36,460	$	23,282	$	101,300	$	29,255
Denominator
Basic weighted average common shares and common equivalents	205,791,699		190,650,400		205,592,806		183,578,254
Dilutive restricted stock units	935,468		1,301,989		849,868		1,120,157
Diluted weighted average common shares	206,727,167		191,952,389		206,442,674		184,698,411
Net income attributable to common stockholders, per:
Basic common share	$	0.18	$	0.12	$	0.49	$	0.16
Diluted common share	$	0.18	$	0.12	$	0.49	$	0.16

During the three and nine months ended ~~March 31,~~September 30, 2020, approximately 99,700 and ~~2019, approximately 6,300 and 3,100~~113,300 restricted stock units, respectively, were not included in computing diluted earnings per share because they were considered anti-dilutive.

~~12. SUMMARIZED CONDENSED CONSOLIDATING INFORMATION~~

The 2024 Notes are issued by the Operating Partnership and fully and unconditionally guaranteed, jointly and severally, by the Company and one of the Company’s non-operating subsidiaries, subject to release under certain customary circumstances as described below. In connection with the Operating Partnership’s assumption of the 2026 Notes, the Company has fully and unconditionally guaranteed the 2026 Notes, subject to release under certain circumstances as described below. The 2029 Notes are issued by the Operating Partnership and guaranteed, fully and unconditionally, by the Company.

These guarantees are subordinated to all existing and future senior debt and senior guarantees of the applicable guarantors and are unsecured. The Company conducts all of its business through and derives virtually all of its income from its subsidiaries. Therefore, the Company’s ability to make required payments with respect to its indebtedness (including the Senior Notes) and other obligations depends on the financial results and condition of its subsidiaries and its ability to receive funds from its subsidiaries.

~~A guarantor will be automatically and unconditionally released from its obligations under the guarantee with respect to the 2024 Notes in the event of:~~

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

Pursuant to amended Rule 3-10 of Regulation S-X, the following aggregate summarized financial information is provided for the Company (the “Parent Company”), the Operating Partnership and Sabra Health Care, L.L.C. (the guarantor subsidiary of the 2024 Notes). This aggregate summarized financial information has been prepared from the books and records maintained by the Company, the Operating Partnership and Sabra Health Care, L.L.C. The aggregate summarized financial information does not include the investments in non-guarantor subsidiaries nor the earnings from non-guarantor subsidiaries and therefore is not necessarily indicative of the results of operations or financial position had the Operating Partnership and Sabra Health Care, L.L.C. operated as independent entities. Intercompany transactions have been eliminated. The aggregate summarized balance sheet information as of March 31, 2020 and December 31, 2019 and aggregate summarized statement of loss information for During the three months ended ~~March 31, 2020 is as follows (in thousands):~~September 30, 2019, 0 restricted stock units were considered anti-dilutive, and during the nine months ended September 30, 2019, approximately 430 restricted stock units were not included in computing diluted earnings per share because they were considered anti-dilutive.

March 31, 2020 December 31, 2019

Total assets $ 70,689
$ 52,597

Total liabilities 2,378,729
2,241,501

Three Months Ended March 31, 2020

Total revenues 12

Total expenses 30,349

Net loss (30,820 )

Net loss attributable to common stockholders (30,820 )

~~13.~~12. COMMITMENTS AND CONTINGENCIES

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. As of ~~March 31,~~September 30, 2020, the Company does not expect that compliance with existing environmental laws will have a material adverse effect on the Company’s financial condition and results of operations.

From time to time, the Company is party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings where the likelihood of a loss contingency is reasonably possible and the amount or range of reasonably possible losses is material to the Company’s results of operations, financial condition or cash flows.

~~14.~~13. SUBSEQUENT EVENTS

The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued.

Dividend Declaration

On ~~May 6,~~November 5, 2020, the Company’s board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on ~~May 29,~~November 30, 2020 to common stockholders of record as of the close of business on ~~May 18,~~November 16, 2020.

The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those which are discussed in the “Risk Factors” section in Part I, Item 1A of our 2019 Annual Report on Form 10-K and Part II, Item 1A of ~~this 10-Q.~~our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. Also see “Statement Regarding Forward-Looking Statements” preceding Part I.

The following discussion and analysis should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows:

•Critical Accounting Policies

•Recently Issued Accounting Standards Update

•Results of Operations

•Liquidity and Capital Resources

•Concentration of Credit Risk

•Skilled Nursing Facility Reimbursement Rates

•Obligations and Commitments

•Off-Balance Sheet Arrangements

We operate as a self-administered, self-managed REIT that, through our subsidiaries, owns and invests in real estate serving the healthcare industry.


				Page Numbers
PART I. FINANCIAL INFORMATION

Item 1.			~~Page~~Financial Statements: ~~Numbers~~
~~PART I. FINANCIAL INFORMATION~~

~~Item 1.~~	~~Financial Statements:~~

	Condensed Consolidated Balance Sheets	4

			Condensed Consolidated Statements of Income	5

			Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss)	6

			Condensed Consolidated Statements of Equity	7

			Condensed Consolidated Statements of Cash Flows	89

			Notes to Condensed Consolidated Financial Statements	910

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	2728

Item 3.			Quantitative and Qualitative Disclosures About Market Risk	3845

Item 4.			Controls and Procedures	3946

PART II. OTHER INFORMATION

Item 1.			Legal Proceedings	4047

Item 1a.			Risk Factors	4047

Item 6.			Exhibits	4147

Signatures				4249



	March 31, 2020			December 31, 2019
	(unaudited)
Assets
Real estate investments, net of accumulated depreciation of $569,752 and $539,213 as of March 31, 2020 and December 31, 2019, respectively	$	5,363,168		$	5,341,370
Loans receivable and other investments, net	88,370			107,374
Investment in unconsolidated joint venture	311,753			319,460
Cash and cash equivalents	54,051			39,097
Restricted cash	8,375			10,046
Lease intangible assets, net	96,758			101,509
Accounts receivable, prepaid expenses and other assets, net	169,829			150,443
Total assets	$	6,092,304		$	6,069,299

Liabilities
Secured debt, net	$	97,066		$	113,070
Revolving credit facility	101,000			—
Term loans, net	1,033,110			1,040,258
Senior unsecured notes, net	1,248,170			1,248,773
Accounts payable and accrued liabilities	150,926			108,792
Lease intangible liabilities, net	66,819			69,946
Total liabilities	2,697,091			2,580,839

Commitments and contingencies (Note 13)

Equity
Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2020 and December 31, 2019	—			—
Common stock, $.01 par value; 250,000,000 shares authorized, 205,559,356 and 205,208,018 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively	2,056			2,052
Additional paid-in capital	4,075,781			4,072,079
Cumulative distributions in excess of net income	(631,251		)	(573,283		)
Accumulated other comprehensive loss	(51,373		)	(12,388		)
Total equity	3,395,213			3,488,460
Total liabilities and equity	$	6,092,304		$	6,069,299



	Three Months Ended March 31, 2019
	Common Stock			Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
	Shares	Amounts		Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
Balance, December 31, 2018	178,306,528	$	1,783	$	3,507,925		$	(271,595	)	$	12,301		$	3,250,414		$	4,333		$	3,254,747
Cumulative effect of Topic 842 adoption	—	—		—			(32,502		)	—			(32,502		)	—			(32,502		)
Net (loss) income	—	—		—			(77,704		)	—			(77,704		)	12			(77,692		)
Other comprehensive loss	—	—		—			—			(14,048		)	(14,048		)	—			(14,048		)
Distributions to noncontrolling interest	—	—		—			—			—			—			(36		)	(36		)
Amortization of stock-based compensation	—	—		3,270			—			—			3,270			—			3,270
Common stock issuance, net	113,071	1		(2,208		)	—			—			(2,207		)	—			(2,207		)
Common dividends ($0.45 per share)	—	—		—			(80,754		)	—			(80,754		)	—			(80,754		)
Balance, March 31, 2019	178,419,599	$	1,784	$	3,508,987		$	(462,555	)	$	(1,747	)	$	3,046,469		$	4,309		$	3,050,778


	Three Months Ended March 31, 2020
	Common Stock			Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
	Shares	Amounts		Additional Paid-in Capital			Cumulative Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
Balance, December 31, 2019	205,208,018	$	2,052	$	4,072,079		$	(573,283	)	$	(12,388	)	$	3,488,460		$	—		$	3,488,460
Cumulative effect of Topic 326 adoption	—	—		—			(167		)	—			(167		)	—			(167		)
Net income	—	—		—			35,217			—			35,217			—			35,217
Other comprehensive loss	—	—		—			—			(38,985		)	(38,985		)	—			(38,985		)
Amortization of stock-based compensation	—	—		2,988			—			—			2,988			—			2,988
Common stock issuance, net	351,338	4		714			—			—			718			—			718
Common dividends ($0.45 per share)	—	—		—			(93,018		)	—			(93,018		)	—			(93,018		)
Balance, March 31, 2020	205,559,356	$	2,056	$	4,075,781		$	(631,251	)	$	(51,373	)	$	3,395,213		$	—		$	3,395,213



April 1 through December 31, 2020	$	319,956
2021	427,122
2022	406,769
2023	392,007
2024	383,326
Thereafter	1,742,840
	$	3,672,020



											March 31, 2020
Investment	Quantity as of March 31, 2020	Property Type	Principal Balance as of March 31, 2020 ⁽¹⁾		Book Value as of March 31, 2020			Book Value as of December 31, 2019			Weighted Average Contractual Interest Rate / Rate of Return		Weighted Average Annualized Effective Interest Rate / Rate of Return		Maturity Date as of March 31, 2020
Loans Receivable:
Mortgage	1	Specialty Hospital	$	19,000	$	19,000		$	19,000		10.0	%	10.0	%	01/31/27
Construction	1	Senior Housing	2,518		2,537			2,487			8.0	%	7.8	%	09/30/22
Other	17	Multiple	46,027		42,081			42,147			6.8	%	6.9	%	09/01/20- 08/31/28

	19		67,545		63,618			63,634			7.7	%	7.9	%

Allowance for loan losses			—		(1,225		)	(564		)

			$	67,545	$	62,393		$	63,070
Other Investments:
Preferred Equity	6	Skilled Nursing / Senior Housing	25,793		25,977			44,304			12.4	%	12.4	%	N/A

Total	25		$	93,338	$	88,370		$	107,374		9.0	%	9.2	%


⁽¹⁾	~~Principal balance includes amounts funded and accrued but unpaid interest / preferred return and excludes capitalizable fees.~~



Interest Rate Type	Principal Balance as of March 31, 2020 ⁽¹⁾⁽²⁾		Principal Balance as of December 31, 2019⁽¹⁾		Weighted Average Interest Rate at March 31, 2020 ⁽³⁾		Maturity Date
Fixed Rate	$	98,362	$	114,777	3.47	%	December 2021 - August 2051


⁽¹⁾	~~Principal balance does not include deferred financing costs, net of $1.3 million and $1.7 million as of March 31, 2020 and December 31, 2019, respectively.~~


⁽²⁾	Excludes $14.2 million principal balance secured by 2 skilled nursing/transitional care facilities classified as held for sale as of March 31, 2020. See Note 5, “Impairment of Real Estate, Assets Held for Sale and Dispositions,” for additional information.


⁽³⁾	~~Weighted average interest rate includes private mortgage insurance.~~



	Secured Indebtedness⁽¹⁾			Revolving Credit Facility ⁽²⁾		Term Loans			Senior Notes			Total
April 1 through December 31, 2020	$	2,387		$	—	$	—		$	—		$	2,387
2021	17,205			—		—			—			17,205
2022	2,816			—		105,000			—			107,816
2023	2,898			101,000		350,000			—			453,898
2024	2,983			—		588,212			300,000			891,195
Thereafter	70,073			—		—			950,000			1,020,073
Total Debt	98,362			101,000		1,043,212			1,250,000			2,492,574
Premium, net	—			—		—			7,325			7,325
Deferred financing costs, net	(1,296		)	—		(10,102		)	(9,155		)	(20,553		)
Total Debt, Net	$	97,066		$	101,000	$	1,033,110		$	1,248,170		$	2,479,346


⁽¹⁾	Excludes $14.2 million and $0.4 million of principal balance and deferred financing costs, net, respectively, secured by 2 skilled nursing/transitional care facilities classified as held for sale as of March 31, 2020. See Note 5, “Impairment of Real Estate, Assets Held for Sale and Dispositions,” for additional information.


⁽²⁾	~~Revolving Credit Facility is subject to 2 six-month extension options.~~


⁽²⁾ Balance as of September 30, 2020 includes 2 forward starting interest rate swaps with an effective date of January 2021 and an aggregate notional amount of CAD $125.0 million. 21 Table of Contents	~~Balance as of March 31, 2020 includes 2 forward starting interest rate swaps with an effective date of January 2021 and an aggregate notional amount of CAD $125.0 million.~~



		Count as of March 31, 2020	Fair Value				Maturity Dates
Type	Designation	Count as of March 31, 2020	March 31, 2020		December 31, 2019		Maturity Dates	Balance Sheet Location
Assets:
Interest rate swaps	Cash flow	—	$	—	$	4,239	N/A	Accounts receivable, prepaid expenses and other assets, net
Forward starting interest rate swaps	Cash flow	4	549		—		2034	Accounts receivable, prepaid expenses and other assets, net
Cross currency interest rate swaps	Net investment	2	7,525		3,238		2025	Accounts receivable, prepaid expenses and other assets, net
			$	8,074	$	7,477

Liabilities:
Interest rate swaps	Cash flow	12	$	8,831	$	—	2020-2023	Accounts payable and accrued liabilities
Forward starting interest rate swaps	Cash flow	10	$	27,055	$	494	2024-2034	Accounts payable and accrued liabilities
Forward starting interest rate collars	Cash flow	2	2,525		132		2024	Accounts payable and accrued liabilities
CAD term loan	Net investment	1	88,213		96,025		2024	Term loans, net
			$	126,624	$	96,651


	As of March 31, 2020																									As of December 31, 2019
	Gross Amounts of Recognized Assets / Liabilities			Gross Amounts Offset in the Balance Sheet				Net Amounts of Assets / Liabilities presented in the Balance Sheet				Gross Amounts Not Offset in the Balance Sheet														Gross Amounts of Recognized Assets / Liabilities					Gross Amounts Offset in the Balance Sheet				Net Amounts of Assets / Liabilities presented in the Balance Sheet				Gross Amounts Not Offset in the Balance Sheet
			Financial Instruments								Cash Collateral Received				Net Amount															Financial Instruments								Cash Collateral Received				Net Amount
Offsetting Assets:																									Offsetting Assets:
Derivatives	$	8,074				$	—			$	8,074			$	(8,074	)		$	—			$	—	Derivatives				$	7,477				$	0			$	7,477			$	(544)			$	0			$	6,933
Offsetting Liabilities:																							Offsetting Liabilities:
Derivatives	$	38,411		$	—			$	38,411			$	(8,074	)		$	—			$	30,337		Derivatives			$	626				$	0			$	626			$	(544)			$	0			$	82



	March 31, 2020						December 31, 2019
	Face Value ⁽¹⁾		Carrying Amount ⁽²⁾		Fair Value		Face Value ⁽¹⁾		Carrying Amount ⁽²⁾		Fair Value
Financial assets:
Loans receivable	$	67,545	$	62,393	$	53,985	$	67,527	$	63,070	$	59,832
Preferred equity investments	25,793		25,977		26,186		43,893		44,304		44,493
Financial liabilities:
Senior Notes	1,250,000		1,248,170		1,176,155		1,250,000		1,248,773		1,328,714
Secured indebtedness	98,362		97,066		94,383		114,777		113,070		105,510


⁽¹⁾ (2) Carrying amount represents the book value of financial instruments, including unamortized premiums/discounts and deferred financing costs. 24 Table of Contents	~~Face value represents amounts contractually due under the terms of the respective agreements.~~


⁽²⁾	~~Carrying amount represents the book value of financial instruments, including unamortized premiums/discounts and deferred financing costs.~~


	Three Months Ended March 31,						Increase / (Decrease)			Percentage Difference			Variance due to Acquisitions, Originations and Dispositions ⁽¹⁾				Remaining Variance ⁽²⁾					Three Months Ended September 30,							Increase / (Decrease)			Percentage Difference				Variance due to Acquisitions, Originations and Dispositions (1)			Remaining Variance (2)
	2020			2019								2020								2019
Revenues:																									Revenues:
Rental and related revenues	$	106,512		$	116,387		$	(9,875	)		(8	)%		$	(4,050	)		$	(5,825	)	Rental and related revenues		$	100,612			$	110,104		$	(9,492)		(9)		%		$	1,717		$	(11,209)
Interest and other income	2,851			3,325			(474		)	(14	)%		(570		)		96			Interest and other income		3,299				3,325				(26)			(1)		%		(283)			257
Resident fees and services	39,983			17,061			22,922			134	%		2,280				20,642			Resident fees and services		39,341				36,405			2,936			8		%		2,429			507
Expenses:																				Expenses:
Depreciation and amortization	44,168			44,949			(781		)	(2	)%		(1,661		)		880			Depreciation and amortization		44,209				43,092			1,117			3		%		854			263
Interest	25,704			36,318			(10,614		)	(29	)%		—				(10,614		)	Interest		24,904				29,255			(4,351)			(15)		%		(220)			(4,131)
Triple-net portfolio operating expenses	4,901			5,289			(388		)	(7	)%		(124		)		(264		)	Triple-net portfolio operating expenses		5,249				5,611			(362)			(6)		%		66			(428)
Senior housing - managed portfolio operating expenses	27,261			12,040			15,221			126	%		1,947				13,274			Senior housing - managed portfolio operating expenses		27,745				23,979			3,766			16		%		1,764			2,002
General and administrative	8,761			8,184			577			7	%		—				577			General and administrative		7,216				8,709			(1,493)			(17)		%		—			(1,493)
Provision for loan losses and other reserves	667			1,207			(540		)	(45	)%		—				(540		)

(Recovery of) provision for loan losses and other reserves																				(Recovery of) provision for loan losses and other reserves		(90)				57			(147)			(258)		%		—			(147)
Impairment of real estate	—			103,134			(103,134		)	NM			(97,105		)		(6,029		)	Impairment of real estate		3,154				13,966			(10,812)			(77)		%		(3,131)			(7,681)
Other income (expense):																				Other income (expense):
Loss on extinguishment of debt																				Loss on extinguishment of debt		(139)				(644)			505			(78)		%		(139)			644
Other income	2,259			171			2,088			1,221	%		—				2,088			Other income		115				215			(100)			(47)		%		—			(100)
Net loss on sales of real estate	(217		)	(1,520		)	1,303			(86	)%		1,303				—
Loss from unconsolidated joint venture	(3,667		)	(1,383		)	(2,284		)	165	%		(1,729		)		(555		)
Income tax expense	(1,042		)	(612		)	(430		)	70	%		—				(430		)
Net gain (loss) on sales of real estate																				Net gain (loss) on sales of real estate		2,715				(19)			2,734			NM				2,734			—
Income (loss) from unconsolidated joint venture																				Income (loss) from unconsolidated joint venture		2,766				(605)			3,371			(557)		%		7,538			(4,167)
Income tax benefit (expense)																				Income tax benefit (expense)		138				(826)			964			(117)		%		—			964


⁽²⁾	Represents the dollar amount increase (decrease) for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 that is not a direct result of investments/dispositions made after January 1, 2019.


			October 1 through December 31, 2020				Year Ending December 31,
	Total				2021		2022		2023		2024		After 2024
Secured indebtedness (1)	$	105,872	$	1,280	$	20,062	$	4,161	$	4,161	$	4,161	$	72,047
Revolving Credit Facility (2)	65,543		818		3,243		3,243		58,239		—		—
Term Loans (3)	1,136,413		6,292		26,177		130,370		370,390		603,184		—
Senior Notes (4)	1,635,885		16,715		59,055		59,055		59,055		359,055		1,082,950

Operating leases	2,561		108		445		467		507		529		505
Total	$	2,946,274	$	25,213	$	108,982	$	197,296	$	492,352	$	966,929	$	1,155,502


⁽¹⁾	Secured indebtedness includes principal payments and interest payments through the applicable maturity dates. Total interest on secured indebtedness, based on contractual rates, is $37.2 million, which is attributable to fixed rate debt.


⁽²⁾	Revolving Credit Facility includes interest payments and payments related to the facility fee due to the lenders based on the amount of commitments under the Revolving Credit Facility through the maturity date (assuming no exercise of our two six-month extension options) totaling $16.1 million.


⁽³⁾	~~Term Loans includes interest payments through the applicable maturity dates totaling $110.3 million, which reflects the impact of interest rate swaps.~~



Ex.						Description

2.1						Agreement and Plan of Merger, dated as of May 7, 2017, by and among Sabra Health Care REIT, Inc., PR Sub, LLC, Sabra Health Care Limited Partnership, Care Capital Properties, Inc. and Care Capital Properties, LP (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on May 8, 2017).

3.1						Articles of Amendment and Restatement of Sabra Health Care REIT, Inc., dated October 20, 2010, filed with the State Department of Assessments and Taxation of the State of Maryland on October 21, 2010 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on October 26, 2010).

3.1.1						Articles of Amendment to the Articles of Amendment and Restatement of Sabra Health Care REIT, Inc., dated as of July 31, 2017 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on July 31, 2017).

~~3.2~~3.1.2						Articles of Amendment to the Articles of Amendment and Restatement of Sabra Health Care REIT, Inc., dated as of June 9, 2020 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on June 12, 2020).

3.2						Amended and Restated Bylaws of Sabra Health Care REIT, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on March 14, 2019).

31.1*22.1						List of Subsidiary Issuers and Guarantors of Sabra Health Care REIT, Inc . (inco rporated by reference to Exhibit 22.1 of the Quarterly Report on Form 10-Q filed by Sabra Health Care REIT, Inc. on August 5, 2020).

31.1*						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**						Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**						Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*						XBRL Taxonomy Extension Schema Document.

101.CAL*						XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*						XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document.


104*Ex.						Description

104*						Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


			SABRA HEALTH CARE REIT, INC.

Date: November 5, 2020			~~SABRA HEALTH CARE REIT, INC.~~
By:
~~Date: May 6, 2020~~	~~By:~~	/S/ RICHARD K. MATROS
				Richard K. Matros
				Chairman, President and
				Chief Executive Officer
				(Principal Executive Officer)

Date: ~~May 6,~~November 5, 2020			By:	/S/ HAROLD W. ANDREWS, JR.
				Harold W. Andrews, Jr.
				Executive Vice President,
				Chief Financial Officer and Secretary
				(Principal Financial and Accounting Officer)