UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 3, 2011
SABRA HEALTH CARE REIT, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 001-34950 | 27-2560479 | ||
| (State of Incorporation) | (Commission File Number) |
(I.R.S. Employer Identification No.) |
| 18500 Von Karman, Suite 550 Irvine, CA |
92612 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number including area code: (888) 393-8248
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
As previously reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2011 (the “Initial Form 8-K”), on May 3, 2011, Sabra Health Care REIT, Inc. (“Sabra” or the “Company”), through an indirect wholly owned subsidiary, completed the acquisition of Texas Regional Medical Center at Sunnyvale, a 70-bed acute care hospital located outside of Dallas, Texas (“Texas Regional Medical Center”), from CP Sunnyvale Property, Ltd., a Texas limited partnership (the “Seller”). As reported in the Initial Form 8-K, in connection with the acquisition, the Company assumed the Seller’s position in an existing triple-net lease with Texas Regional Medical Center, Ltd. that expires in September 2034.
The Company hereby amends the Initial Form 8-K to provide required financial information related to the acquisition of Texas Regional Medical Center.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
| (a) | Financial Statements of Real Estate Acquired | |||||
| F-1 | ||||||
| (b) | Pro Forma Financial Information | |||||
| F-2 | ||||||
| Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2011 |
F-3 | |||||
| Unaudited Pro Forma Consolidated Income Statement for the Three Months Ended March 31, 2011 |
F-4 | |||||
| Unaudited Pro Forma Consolidated Income Statement for the Year Ended December 31, 2010 |
F-5 | |||||
| F-6 | ||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SABRA HEALTH CARE REIT, INC. |
| /s/ HAROLD W. ANDREWS, JR. |
| Name: Harold W. Andrews, Jr. |
| Title: Executive Vice President, Chief Financial Officer and Secretary |
Dated: July 11, 2011
TEXAS REGIONAL MEDICAL CENTER, LTD.
(in thousands)
(unaudited)
Texas Regional Medical Center at Sunnyvale, a 70-bed acute care hospital located outside of Dallas, Texas (“Texas Regional Medical Center”), is 100% leased pursuant to a long-term, triple-net lease to Texas Regional Medical Center, Ltd. (the “Tenant”), a partnership that includes approximately 75 physicians who practice at the hospital. In connection with the acquisition of Texas Regional Medical Center from CP Sunnyvale Property, Ltd., a Texas limited partnership (the “Seller”), on May 3, 2011, Sabra Health Care REIT, Inc. (“Sabra” or the “Company”) assumed the Seller’s position in the existing triple-net lease. Neither the Seller nor the Tenant is affiliated with Sabra or any of its subsidiaries. The Company believes that the financial condition and results of operations of the Tenant are more relevant to the Company’s investors than the financial statements of Texas Regional Medical Center and enable investors to evaluate the credit-worthiness of the Tenant. As a result, the Company has presented below unaudited summary financial information of the Tenant in lieu of financial statements of the acquired property pursuant to Rule 3-14 of Regulation S-X. The summary financial information presented below has been provided by the Tenant and has not been independently verified by the Company. The Company has no reason to believe that such information is inaccurate in any material respect.
| For the Three Months Ended March 31, 2011 |
For the Year Ended December 31, 2010 |
|||||||
| Statements of Operations |
||||||||
| Revenues |
$ | 17,410 | $ | 72,101 | ||||
| Operating expenses |
$ | 14,569 | $ | 58,851 | ||||
| Net (loss) income |
$ | (567 | ) | $ | 377 | |||
| As of March 31, 2011 |
As of December 31, 2010 |
|||||||
| Balance Sheets |
||||||||
| Cash and cash equivalents |
$ | 1,251 | $ | 833 | ||||
| Total current assets |
$ | 16,474 | $ | 15,604 | ||||
| Total current liabilities |
$ | 20,215 | $ | 18,348 | ||||
| Total debt |
$ | 69,709 | $ | 70,564 | ||||
F-1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements presented below have been prepared based on certain pro forma adjustments to the historical consolidated financial statements of Sabra Health Care REIT, Inc. (“Sabra” or the “Company”) in connection with the following transactions:
| • | the acquisition of Texas Regional Medical Center, a 70-bed acute care hospital located outside of Dallas, Texas (“Texas Regional Medical Center”), on May 3, 2011 by an indirect wholly owned subsidiary of the Company as reported by the Company in a Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on May 5, 2011; |
| • | the acquisition of Oak Brook Health Care Center, a 120-bed skilled nursing facility in Whitehouse, Texas (“Oak Brook Health Care Center”), on June 30, 2011 by an indirect wholly owned subsidiary of the Company as reported by the Company in a Form 8-K filed with the SEC on July 11, 2011; |
| • | the probable acquisition by the Company of four skilled nursing facilities—Broadmeadow Healthcare, Capitol Healthcare, Pike Creek Healthcare and Renaissance Healthcare (the “SNF Portfolio”)—pursuant to an agreement entered into with Peninsula Healthcare Services, LLC; Broadmeadow Investment LLC; Capitol Nursing & Rehabilitation Center, L.L.C.; and Pike Creek Healthcare Services LLC on July 8, 2011 as reported by the Company in a Form 8-K filed with the SEC on July 11, 2011; |
| • | a proposed equity offering by the Company; and |
| • | the other transactions described in the accompanying pro forma consolidated financial statements. |
The unaudited pro forma consolidated balance sheet as of March 31, 2011 gives effect to the acquisitions of Texas Regional Medical Center, Oak Brook Health Care Center and the SNF Portfolio and the proposed equity offering as if they had occurred on March 31, 2011. The unaudited pro forma consolidated income statement for the three months ended March 31, 2011 gives effect to the acquisitions of Texas Regional Medical Center, Oak Brook Health Care Center, the Hillside Terrace Mortgage Note acquired by the Company on March 25, 2011 and the SNF Portfolio and the proposed equity offering as if they had occurred on January 1, 2010. The unaudited pro forma consolidated income statement for the year ended December 31, 2010 gives effect to the Company’s separation from Sun Healthcare Group, Inc. on November 15, 2010, the issuance of the 8.125% senior notes due 2018, the acquisitions of Texas Regional Medical Center, Oak Brook Health Care Center, the Hillside Terrace Mortgage Note and the SNF Portfolio and the proposed equity offering as if they had occurred on January 1, 2010. The historical financial information presented herein was derived from the Company’s consolidated financial statements that are included in its Annual Report on Form 10-K for the year ended December 31, 2010 and its Quarterly Report on Form 10-Q for the three months ended March 31, 2011.
The allocation of the purchase price for the acquisition transactions identified above is reflected in these unaudited pro forma consolidated financial statements based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. A final determination of the fair values of assets acquired and liabilities assumed will be based on the actual valuation of the tangible and intangible assets and liabilities of each of Texas Regional Medical Center, Oak Brook Health Care Center and the SNF Portfolio. Consequently, amounts preliminarily allocated to identifiable tangible and intangible assets and liabilities could change significantly from those used in the pro forma consolidated financial statements presented below and could result in a material change in depreciation or amortization of tangible and intangible assets and liabilities.
The historical financial information has been adjusted to give effect to events that are directly attributable to the transactions identified above that can be factually supported and, in the case of the unaudited pro forma consolidated income statement, that are expected to have a continuing impact. The unaudited pro forma consolidated financial statements are provided for informational purposes only. The unaudited pro forma consolidated financial statements do not purport to be and should not be assumed to be an indication of the results that would have been achieved had the transactions been completed as of the dates indicated or that may be achieved in the future. The completion of the valuation, the allocation of the purchase price, the impact of ongoing integration activities, the timing of completion of the acquisition of the SNF Portfolio and other changes in the tangible and intangible assets and liabilities of each of Texas Regional Medical Center, Oak Brook Health Care Center and the SNF Portfolio could cause material differences in the information presented.
F-2
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of March 31, 2011
(dollars in thousands, except per share amounts)
| Sabra Historical (a) |
Adjustments | Sabra As Adjusted |
Pro Forma for SNF Portfolio Acquisition (e) |
Sabra Pro Forma As Adjusted |
||||||||||||||||||||||||
| Texas Regional Medical Center Acquisition (b) |
Other Transactions (c) |
Equity Offering (d) |
||||||||||||||||||||||||||
| Assets: |
||||||||||||||||||||||||||||
| Total real estate investments, net |
$ | 476,222 | $ | 61,630 | $ | 11,020 | — | $ | 548,872 | $ | 95,580 | $ | 644,452 | |||||||||||||||
| Cash and cash equivalents |
80,210 | (62,758 | ) | (11,375 | ) | $ | 141,025 | 147,102 | (99,814 | ) | 47,288 | |||||||||||||||||
| Restricted cash |
5,528 | — | — | — | 5,528 | — | 5,528 | |||||||||||||||||||||
| Deferred tax assets |
26,300 | — | — | — | 26,300 | — | 26,300 | |||||||||||||||||||||
| Prepaid expenses, deferred financing costs and other assets |
16,809 | 1,070 | 280 | — | 18,159 | 1,920 | 20,079 | |||||||||||||||||||||
| Total assets |
$ | 605,069 | $ | (58 | ) | $ | (75 | ) | $ | 141,025 | $ | 745,961 | $ | (2,314 | ) | $ | 743,647 | |||||||||||
| Liabilities and stockholders’ equity |
||||||||||||||||||||||||||||
| Mortgage notes payable |
$ | 160,676 | $ | — | $ | — | $ | — | $ | 160,676 | $ | — | $ | 160,676 | ||||||||||||||
| Secured revolving credit facility |
— | — | — | |||||||||||||||||||||||||
| Senior unsecured notes payable |
225,000 | 225,000 | 225,000 | |||||||||||||||||||||||||
| Accounts payable and accrued liabilities |
13,170 | — | — | — | 13,170 | — | 13,170 | |||||||||||||||||||||
| Tax liability |
26,300 | — | — | — | 26,300 | — | 26,300 | |||||||||||||||||||||
| Total liabilities |
425,146 | — | — | — | 425,146 | — | 425,146 | |||||||||||||||||||||
| Stockholders’ equity: |
||||||||||||||||||||||||||||
| Preferred stock, $.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2011 |
— | — | — | — | — | — | — | |||||||||||||||||||||
| Common stock, $.01 par value; 125,000,000 shares authorized, 25,084,734 shares issued and outstanding, 34,225,501 as adjusted and pro forma as adjusted shares issued and outstanding |
251 | — | — | 91 | 342 | — | 342 | |||||||||||||||||||||
| Additional paid-in capital |
178,417 | 140,934 | 319,351 | 319,351 | ||||||||||||||||||||||||
| Retained earnings |
1,255 | (58 | ) | (75 | ) | 1,122 | (2,314 | ) | (1,192 | ) | ||||||||||||||||||
| Total stockholders’ equity |
179,923 | (58 | ) | (75 | ) | 141,025 | 320,815 | (2,314 | ) | 318,501 | ||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 605,069 | $ | (58 | ) | $ | (75 | ) | $ | 141,025 | $ | 745,961 | $ | (2,314 | ) | $ | 743,647 | |||||||||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
F-3
UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENT
For the Three Months Ended March 31, 2011
(dollars in thousands, except per share amounts)
| Sabra Historical (a) |
Adjustments | Sabra As Adjusted |
Pro Forma for SNF Portfolio Acquisition |
Sabra Pro Forma As Adjusted |
||||||||||||||||||||||||
| Texas Regional Medical Center Acquisition |
Other Transactions (f) |
Equity Offering |
||||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||
| Rental income |
$ | 17,561 | $ | 1,648 | (g) | $ | 322 | (g) | $ | — | $ | 19,531 | $ | 2,645 | (g) | $ | 22,176 | |||||||||||
| Interest income |
40 | — | 151 | (h) | — | 191 | — | 191 | ||||||||||||||||||||
| Total revenues |
17,601 | 1,648 | 473 | — | 19,722 | 2,645 | 22,367 | |||||||||||||||||||||
| Expenses: |
||||||||||||||||||||||||||||
| Depreciation and amortization |
6,086 | 450 | (i) | 75 | (i) | — | 6,611 | 619 | (i) | 7,230 | ||||||||||||||||||
| Interest |
7,597 | — | — | — | 7,597 | — | 7,597 | |||||||||||||||||||||
| General and administrative |
2,670 | — | (59 | )(j) | — | 2,611 | — | 2,611 | ||||||||||||||||||||
| Total expenses |
16,353 | 450 | 16 | — | 16,819 | 619 | 17,438 | |||||||||||||||||||||
| Net income |
$ | 1,248 | $ | 1,198 | $ | 457 | $ | — | $ | 2,903 | $ | 2,026 | $ | 4,929 | ||||||||||||||
| Net income per common share, basic (k) |
$ | 0.05 | $ | 0.08 | $ | 0.14 | ||||||||||||||||||||||
| Net income per common share, diluted (k) |
$ | 0.05 | $ | 0.08 | $ | 0.14 | ||||||||||||||||||||||
| Weighted-average number of common shares outstanding, basic (k) |
25,136,140 | 9,140,767 | (l) | 34,276,907 | 34,276,907 | |||||||||||||||||||||||
| Weighted-average number of common shares outstanding, diluted (k) |
25,211,585 | 9,140,767 | (l) | 34,352,352 | 34,352,352 | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
F-4
UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENT
For the Year Ended December 31, 2010
(dollars in thousands, except per share amounts)
| Sabra Historical (a) |
Adjustments | Sabra As Adjusted |
Pro Forma for SNF Portfolio Acquisition |
Sabra Pro Forma As Adjusted |
||||||||||||||||||||||||||||
| Separation and Senior Note Issuance |
Texas Regional Medical Center Acquisition |
Other Transactions (f) |
Equity Offering |
|||||||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Rental income |
$ | 8,781 | $ | 61,464 | (m) | $ | 6,593 | (g) | $ | 1,286 | (g) | $ | — | $ | 78,124 | $ | 10,578 | (g) | $ | 88,702 | ||||||||||||
| Interest income |
14 | — | — | 651 | (h) | — | 665 | 665 | ||||||||||||||||||||||||
| Total revenues |
8,795 | 61,464 | 6,593 | 1,937 | — | 78,789 | 10,578 | 89,367 | ||||||||||||||||||||||||
| Expenses: |
||||||||||||||||||||||||||||||||
| Depreciation and amortization |
3,134 | 20,783 | (m) | 1,801 | (i) | 302 | (i) | — | 26,020 | 2,476 | (i) | 28,496 | ||||||||||||||||||||
| Interest |
3,859 | 26,464 | (m)(n) | — | — | — | 30,323 | — | 30,323 | |||||||||||||||||||||||
| General and administrative |
1,553 | 7,875 | (m) | — | — | — | 9,428 | — | 9,428 | |||||||||||||||||||||||
| Total expenses |
8,546 | 55,122 | 1,801 | 302 | — | 65,771 | 2,476 | 68,247 | ||||||||||||||||||||||||
| Income before income taxes |
249 | 6,342 | 4,792 | 1,635 | — | 13,018 | 8,102 | 21,120 | ||||||||||||||||||||||||
| Income tax expense (benefit) |
242 | (242 | )(o) | — | — | — | — | — | ||||||||||||||||||||||||
| Net income |
$ | 7 | $ | 6,584 | $ | 4,792 | $ | 1,635 | $ | — | $ | 13,018 | $ | 8,102 | $ | 21,120 | ||||||||||||||||
| Net income per common share, basic (k) |
$ | 0.00 | $ | 0.62 | ||||||||||||||||||||||||||||
| Net income per common share, diluted (k) |
$ | 0.00 | $ | 0.62 | ||||||||||||||||||||||||||||
| Weighted-average number of common shares outstanding, basic (k) |
25,110,936 | 9,140,767 | (p) | 34,251,703 | 34,251,703 | |||||||||||||||||||||||||||
| Weighted-average number of common shares outstanding, diluted (k) |
25,186,988 | 9,140,767 | (p) | 34,327,755 | 34,327,755 | |||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
F-5
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
You should read the unaudited pro forma consolidated financial statements in conjunction with Sabra’s consolidated financial statements and the notes thereto included in Sabra’s Annual Report on Form 10-K for the year ended December 31, 2010 and Sabra’s Quarterly Report on Form 10-Q for the three months ended March 31, 2011.
| (a) | Historical financial information for the year ended December 31, 2010 is derived from Sabra’s Annual Report on Form 10-K for the year ended December 31, 2010. Historical financial information as of and for the three months ended March 31, 2011 is derived from Sabra’s Quarterly Report on Form 10-Q for the three months ended March 31, 2011. |
| (b) | Represents the acquisition of the Texas Regional Medical Center, which Sabra acquired on May 3, 2011. The purchase price of the Texas Regional Medical Center was $62.7 million and Sabra funded the acquisition with available cash. In addition to the purchase price, Sabra expects to incur and expense approximately $58,000 of additional acquisition pursuit costs not incurred as of March 31, 2011 that are directly attributable to this transaction and are non-recurring; therefore, the anticipated impact on the results of operations was excluded from the pro forma consolidated statement of income. Sabra recorded the cost of tangible assets and identifiable intangibles (consisting of tenant origination and absorption costs and tenant relationship intangibles) acquired based on their estimated fair values. The cost of acquired tangible assets and identifiable intangibles are recorded under Total real estate investments, net and Prepaid expenses, deferred financing costs and other assets, respectively, on the accompanying unaudited pro forma consolidated balance sheet. The purchase price allocation is preliminary and subject to change. Assuming a $1.0 million change in the allocation between tangible assets and identifiable intangibles, the annual depreciation and amortization would change by approximately $10,000. |
| (c) | Represents the acquisition of Oak Brook Health Care Center, which Sabra acquired on June 30, 2011. The purchase price of Oak Brook Health Care Center was $11.3 million and Sabra funded the acquisition with available cash. In addition to the purchase price, Sabra expects to incur and expense approximately $75,000 of additional acquisition pursuit costs not incurred as of March 31, 2011 that are directly attributable to this transaction and are non-recurring; therefore, the anticipated impact on the results of operations was excluded from the pro forma consolidated statement of income. Sabra recorded the cost of tangible assets and identifiable intangibles (consisting of tenant origination and absorption costs and tenant relationship intangibles) acquired based on their estimated fair values. The cost of acquired tangible assets and identifiable intangibles are recorded under Total real estate investments, net and Prepaid expenses, deferred financing costs and other assets, respectively, on the accompanying unaudited pro forma consolidated balance sheet. The purchase price allocation is preliminary and subject to change. Assuming a $1.0 million change in the allocation between tangible assets and identifiable intangibles, the annual depreciation and amortization would change by approximately $31,000. |
| (d) | Represents an assumed issuance of 9.1 million shares of Sabra’s common stock and estimated proceeds to Sabra from a proposed equity offering of approximately $141.0 million (based on an assumed public offering price of $16.41 per share, which was the closing price of our common stock on June 28, 2011), of which $97.5 million will be used to fund the acquisition of the SNF Portfolio. The assumed number of shares of Sabra’s common stock issued in connection with the offering is valued as follows (in thousands, except share and per share data): |
| Number of shares issued |
9,140,767 | |||
| Price per share |
$ | 16.41 | ||
| Gross proceeds |
$ | 150,000 | ||
| Less: Underwriting discounts and commissions |
(7,875 | ) | ||
| Less: Expenses payable by Sabra |
(1,100 | ) | ||
| Proceeds to Sabra |
$ | 141,025 |
The total value of the assumed number of shares of common stock issued in the offering is allocated as follows:
| Par value, $0.01 per share |
$ | 91 | ||
| Additional paid-in capital |
140,934 | |||
| $ | 141,025 |
| (e) | Represents the probable acquisition of the SNF Portfolio. Under the terms of the purchase and sale agreement, the purchase price of the SNF Portfolio will be $97.5 million. Sabra anticipates funding the acquisition of the SNF Portfolio with a portion of the proceeds to it from the proposed equity offering. In addition to the purchase price, Sabra expects to incur and expense approximately $2.3 million of additional acquisition pursuit costs not incurred as of March 31, 2011 that are directly attributable to this transaction and are non-recurring; therefore, the anticipated impact on the results of |
F-6
| operations was excluded from the pro forma consolidated statement of income. Upon acquisition, Sabra will record the cost of tangible assets and identifiable intangibles (consisting of tenant origination and absorption costs and tenant relationship intangibles) acquired based on their estimated fair values. The cost of acquired tangible assets and identifiable intangibles are recorded under Total real estate investments, net and Prepaid expenses, deferred financing costs and other assets, respectively, on the accompanying unaudited pro forma consolidated balance sheet. The purchase price allocation is preliminary and subject to change. Assuming a $1.0 million change in the allocation between tangible assets and identifiable intangibles, the annual depreciation and amortization would change by approximately $37,000. In addition, the acquisition of the SNF Portfolio is subject to customary closing conditions, including the satisfactory completion by Sabra of its due diligence investigation. |
| (f) | Represents the acquisitions of Oak Brook Health Care Center and the Hillside Terrace Mortgage Note. See note (c) for information regarding the acquisition of Oak Brook Health Care Center. On March 25, 2011, Sabra purchased, at a discount, for $5.3 million the Hillside Mortgage Terrace Note, which was in default and is secured by a combined assisted living, independent living and memory care facility located in Ann Arbor, Michigan. The monthly debt service payment for the Hillside Terrace Mortgage Note is $54,250. |
| (g) | Represents base rental income (not reflected in Sabra’s historical statement of income) for the period. |
| (h) | Represents interest income (not reflected in Sabra’s historical statement of income) for the period as a result of Sabra’s investment in the Hillside Terrace Mortgage Note on March 25, 2011. |
| (i) | Represents depreciation and amortization expense (not reflected in Sabra’s historical statement of income) for the period. The cost of tangible assets and identifiable liabilities is amortized over their respective estimated useful lives. The estimated useful lives are as follows: |
| Building |
40 years | |
| Building improvements and fixtures |
10 – 15 years | |
| Tenant origination and absorption costs |
15 – 23 years | |
| Tenant relationship intangibles |
25 – 33 years |
| (j) | Represents adjustments to remove acquisition pursuit costs for the acquisitions of Texas Regional Medical Center, Oak Brook Health Care Center and the Hillside Terrace Mortgage Note incurred during the three months ended March 31, 2011 that are assumed to have occurred on January 1, 2010. |
| (k) | The calculations of basic and diluted net income per common share are as follows (dollars in thousands, except per share data): |
| Three Months Ended March 31, 2011 |
Year Ended December 31, 2010 | |||||||||||||||
| Sabra Historical |
Sabra Pro Forma As Adjusted |
Sabra Historical |
Sabra Pro Forma As Adjusted |
|||||||||||||
| Numerator |
||||||||||||||||
| Net income |
$ | 1,248 | $ | 4,929 | $ | 7 | $ | 21,120 | ||||||||
| Denominator |
||||||||||||||||
| Basic weighted average common shares |
25,136,140 | 34,276,907 | 25,110,936 | 34,251,703 | ||||||||||||
| Dilutive stock options and restricted stock units |
75,445 | 75,445 | 76,052 | 76,052 | ||||||||||||
| Diluted weighted average common shares |
25,211,585 | 34,352,352 | 25,186,988 | 34,327,755 | ||||||||||||
| Basic earnings per common share |
$ | 0.05 | $ | 0.14 | $ | 0.00 | $ | 0.62 | ||||||||
| Diluted earnings per common share |
$ | 0.05 | $ | 0.14 | $ | 0.00 | $ | 0.62 | ||||||||
| (l) | Represents the assumed issuance of 9,140,767 shares of Sabra’s common stock on January 1, 2010 on a weighted-average basis for the three months ended March 31, 2011. |
| (m) | Represents adjustments required to reflect a full year of Sabra’s operations in place as of December 31, 2010. |
| (n) | Represents adjustment to reflect interest expense and amortization of deferred financing fees related to the issuance of the 8.125% senior notes due 2018. |
F-7
| (o) | Represents adjustment to remove Sabra’s income tax expense since Sabra assumes it would begin operating as a REIT as of January 1, 2010. |
| (p) | Represents the assumed issuance of 9,140,767 shares of Sabra’s common stock on January 1, 2010 on a weighted-average basis for the year ended December 31, 2010. |
F-8