Sabra Health Care REIT (SBRA) 10-K/A 2020 FY Annual report (amended)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)

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

For the fiscal year ended December 31, 2020

OR

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

Commission file number 001-34950

 SABRA HEALTH CARE REIT, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

18500 Von Karman Avenue, Suite 550

Irvine, CA 92612

(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	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	SBRA	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐   No  ☒

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	x	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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $2.9 billion

As of February 17, 2021, there were 210,719,844 shares of the registrant’s $0.01 par value Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the registrant’s 2021 Annual Meeting of Stockholders are incorporated by reference in Part III herein.

EXPLANATORY NOTE

Sabra Health Care REIT, Inc. (“Sabra”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 22, 2021 (the “Original Form 10‑K”), solely to correct a typographical error in the audit period in the first paragraph of the independent registered public accounting firm’s opinion for the related consolidated statements of income, of comprehensive income, of equity, and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). Such change does not affect the independent registered public accounting firm’s unqualified opinion on Sabra’s consolidated financial statements for the year ended December 31, 2020 included in the Original Form 10-K. An updated consent from the independent registered public accounting firm with the current date is filed herewith as an exhibit to this Amendment.

This Amendment includes Part II, Item 8, “Financial Statements and Supplementary Data” and Part IV, Item 15, “Exhibits and Financial Statement Schedules” in their entirety and without change from the Original Form 10-K other than the correction to the date of the audit period in the independent registered public accounting firm’s opinion and the addition of applicable references to this Amendment and the Original Form 10-K. This Amendment also includes Item 9A, “Controls and Procedures” in its entirety and without change from the Original Form 10-K.

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment also contains new certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, which are provided herewith.

Except as described above, this Amendment does not amend, update or change any other items or disclosures in the Original Form 10-K. Further, this Amendment does not change any previously reported financial results, nor does it reflect subsequent events occurring after the filing date of the Original Form 10-K. This Amendment should be read in conjunction with the Original Form 10-K and Sabra’s other filings with the Securities and Exchange Commission.

PART II

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Index to Financial Statements at page F-1 of this 10-K. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quarterly Financial Data” in Part II, Item 7.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2020 to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a–15(f) and 15d–15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria described in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation using the criteria described in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

(a)    Documents filed as part of this 10-K:

(1)    Financial Statements

See the Index to Consolidated Financial Statements at page F-1 of this report.

(2)    Financial Statement Schedules

        The following financial statement schedules are included herein at pages F-39 through F-57 of this report:

Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2020, 2019 and 2018

Schedule III - Real Estate Assets and Accumulated Depreciation as of December 31, 2020

Schedule IV - Mortgage Loans on Real Estate as of December 31, 2020

(3)    Exhibits

The following exhibits are filed herewith or are incorporated by reference, as specified below, to exhibits previously filed with the SEC.

EXHIBIT LIST

Ex.	Description
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 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	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 December 21, 2020).
4.1*	Description of Sabra Health Care REIT, Inc.’s Capital Stock.
4.2	Indenture, dated as of May 23, 2013, among Sabra Health Care Limited Partnership, Sabra Capital Corporation, Sabra Health Care REIT, Inc., and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on May 23, 2013).
4.2.1	Eighth Supplemental Indenture, dated May 29, 2019, among Sabra Health Care Limited Partnership, Sabra Capital Corporation, Sabra Health Care REIT, Inc., the other guarantors named therein, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on May 29, 2019).
4.2.2	Ninth Supplemental Indenture, dated October 7, 2019, among Sabra Health Care Limited Partnership, Sabra Capital Corporation, Sabra Health Care REIT, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on October 7, 2019).
4.3	Form of 4.80% senior note due 2024 (included in Exhibit 4.2.1).
4.4	Form of 3.90% senior note due 2029 (included in Exhibit 4.2.2).
4.5	Indenture, dated as of July 14, 2016, by and among Care Capital Properties, LP, Care Capital Properties, Inc., Care Capital Properties GP, LLC and Regions Bank, as trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on August 23, 2017).
4.5.1	First Supplemental Indenture, dated as of August 17, 2017, by and among Care Capital Properties, LP, PR Sub, LLC, Care Capital Properties GP, LLC and Regions Bank, as trustee (incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on August 23, 2017).

Ex.	Description
4.5.2	Second Supplemental Indenture, dated as of August 17, 2017, by and among Sabra Health Care Limited Partnership as successor to Care Capital Properties, LP, Sabra Health Care REIT, Inc., Care Capital Properties GP, LLC and Regions Bank, as trustee (incorporated by reference to Exhibit 4.3 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on August 23, 2017).
4.5.3	Third Supplemental Indenture, dated as of August 17, 2017, by and among Sabra Health Care Limited Partnership, Sabra Health Care REIT, Inc., Care Capital Properties GP, LLC and Regions Bank, as trustee (incorporated by reference to Exhibit 4.4 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on August 23, 2017).
4.5.4	Fourth Supplemental Indenture, dated as of August 18, 2017, by and among Sabra Health Care Limited Partnership, Sabra Health Care REIT, Inc. and Regions Bank, as trustee (incorporated by reference to Exhibit 4.5 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on August 23, 2017).
4.6	Form of 5.125% senior note due 2026 (included in Exhibit 4.5.1).
4.7	Form of Indenture for Senior Debt Securities (incorporated by reference to Exhibit 4.7 of the Registration Statement on Form S-3 filed by Sabra Health Care REIT, Inc. and Sabra Health Care Limited Partnership on December 11, 2019).
10.1	Limited Partnership Agreement of Sabra Health Care Limited Partnership, dated as of November 15, 2010 (incorporated by reference to Exhibit 3.4 of the Registration Statement on Form S-4 (File No. 333-171820) filed by the issuers and guarantors on January 21, 2011).
10.1.1	First Amendment to the Limited Partnership Agreement by Sabra Health Care REIT, Inc. and Sabra Health Care, LLC, dated March 21, 2013 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on March 21, 2013).
10.2	Fifth Amended and Restated Credit Agreement, dated September 9, 2019, among Sabra Health Care Limited Partnership and Sabra Canadian Holdings, LLC, as Borrowers; Sabra Health Care REIT, Inc., as a guarantor; the other guarantors party thereto; the lenders party thereto; Bank of America, N.A., as Administrative Agent and L/C Issuer; Citizens Bank, National Association, Crédit Agricole Corporate and Investment Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents and L/C Issuers; BMO Harris Bank, N.A., The Bank of Nova Scotia, MUFG Bank, Ltd., Barclays Bank PLC, Citibank, N.A., BBVA USA, Fifth Third Bank, JPMorgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc., Sumitomo Mitsui Banking Corporation and Suntrust Bank, as Co-Documentation Agents; BofA Securities, Inc., as Joint Lead Arranger and Sole Bookrunner; and Citizens Bank, National Association, Crédit Agricole Corporate and Investment Bank and Wells Fargo Securities, LLC, as Joint Lead Arrangers (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on September 11, 2019).
10.3	Form of Indemnification Agreement entered into with each of the directors and officers of Sabra Health Care REIT, Inc. (incorporated by reference to Exhibit 10.5 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on November 5, 2010).
10.4+	Employment Agreement, dated December 24, 2019, between Sabra Health Care REIT, Inc. and Richard K. Matros (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on December 27, 2019).
10.5+	Employment Agreement, dated December 24, 2019, between Sabra Health Care REIT, Inc. and Harold W. Andrews, Jr. (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on December 27, 2019).
10.6+	Employment Agreement, dated December 24, 2019, between Sabra Health Care REIT, Inc. and Talya Nevo-Hacohen (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on December 27, 2019).
10.7+	Sabra Health Care REIT, Inc. 2009 Performance Incentive Plan, effective April 21, 2017 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Sabra Health Care REIT, Inc. on June 21, 2017).
10.8.1+	Form of Notice and Terms and Conditions of Stock Unit Award (Time-Based Stock Units) (for Executive Officers), adopted December 2019 (incorporated by reference to Exhibit 10.8.1 of the Annual Report on Form 10-K filed by Sabra Health Care REIT, Inc. on February 24, 2020).
10.8.2+	Form of Notice and Terms and Conditions of Stock Unit Award (FFO Units) (for Executive Officers), adopted December 2019 (incorporated by reference to Exhibit 10.8.2 of the Annual Report on Form 10-K filed by Sabra Health Care REIT, Inc. on February 24, 2020).

Ex.	Description
10.8.3+*	Form of Notice and Terms and Conditions of Stock Unit Award (TSR Units) (for Executive Officers), adopted December 2020.
10.8.4+	Form of Notice and Terms and Conditions of Stock Unit Award (for Non-Employee Directors) (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q filed by Sabra Health Care REIT, Inc. on November 1, 2017).
10.8.5+	Non-Employee Directors Stock-for-Fees Program (incorporated by reference to Exhibit 10.10.5 of the Registration Statement on Form S-4 (File No. 333-171820-26) filed by Sabra Health Care REIT, Inc. on January 21, 2011).
10.9+	Sabra Health Care REIT, Inc. Directors’ Compensation Policy, effective January 1, 2019 (incorporated by reference to Exhibit 10.9 of the Annual Report on Form 10-K filed by Sabra Health Care REIT, Inc. on February 25, 2019).
10.10+*	Severance Benefits Agreement, dated November 22, 2010, by and between Sabra Health Care REIT, Inc. and Michael Costa.
10.11*	Equity Distribution Agreement, dated December 11, 2019, among the Company, the Sales Agents party thereto, and the Forward Purchasers party thereto.
21.1*	List of Subsidiaries of Sabra Health Care REIT, Inc.
22.1	List of Subsidiary Issuers and Guarantors of Sabra Health Care REIT, Inc. (incorporated 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).
23.1(1)	Consent of PricewaterhouseCoopers LLP.
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.
31.3(1)	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4(1)	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.
32.3(2)	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.
32.4(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(1)	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(1)	XBRL Taxonomy Extension Schema Document.
101.CAL(1)	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF(1)	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB(1)	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE(1)	XBRL Taxonomy Extension Presentation Linkbase Document.
104(1)	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.

 

*	Filed with the Original Form 10-K.
**	Furnished with the Original Form 10-K
+	Designates a management compensation plan, contract or arrangement.
(1)	Filed herewith.
(2)	Furnished herewith.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-4
Consolidated Statements of Income	F-5
Consolidated Statements of Comprehensive Income	F-6
Consolidated Statements of Equity	F-7
Consolidated Statements of Cash Flows	F-8
Notes to Consolidated Financial Statements	F-10
Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2020, 2019 and 2018	F-39
Schedule III—Real Estate Assets and Accumulated Depreciation as of December 31, 2020	F-40
Schedule IV—Mortgage Loans on Real Estate as of December 31, 2020	F-57
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Sabra Health Care REIT, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Sabra Health Care REIT, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, of comprehensive income, of equity, and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-2

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Note 2 and Note 5 to the consolidated financial statements, the Company’s consolidated real estate investments net carrying value was $5,285,038 thousand as of December 31, 2020. During 2020, the Company recognized a $4 million real estate impairment related to one skilled nursing/transitional care facility sold during the year and three senior housing communities. Management regularly monitors events and changes such as triggering events, which in circumstances could indicate that the carrying amounts of its real estate investments may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate investments may not be recoverable, management assesses the recoverability by estimating whether the Company will recover the carrying value of its real estate investments through the future cash flows and the eventual disposition of the investment. In some instances, there may be various potential outcomes for an investment and its potential future cash flows. The future cash flows used to assess recoverability are based on assumptions and may be probability-weighted based on management’s best estimates as of the date of evaluation. These assumptions may include cash flow projections, probability weightings, holding period, terminal capitalization rates, letters of intent, preliminary sales agreements and recent sales data for comparable properties. When necessary, a discount rate assumption may be used to determine fair value. The assumptions are generally based on management’s experience in its local real estate markets, and the effects of current market conditions, which are subject to economic and market uncertainties.

The principal considerations for our determination that performing procedures relating to the impairment assessment of real estate is a critical audit matter are (i) the high degree of auditor judgment and subjectivity involved in applying procedures relating to the Company’s identification of impairment triggering events and the determination of the recoverability of its real estate investments, and (ii) significant audit effort was necessary to perform procedures and evaluate the audit evidence relating to triggering events, and the significant assumptions used in the recoverability of its real estate investments relating to projected rent, probability weightings, holding period, terminal capitalization rates and letters of intent, when applicable.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s impairment assessment of real estate, including controls over the identification of triggering events and the development of assumptions used in applying tests of recoverability related to projected rent, probability weightings, holding period, terminal capitalization rates and letters of intent, when applicable. These procedures also included testing the completeness and accuracy of underlying data used in management’s model and evaluating the reasonableness of significant assumptions used by management in applying tests of recoverability relating to projected rent, probability weightings, holding period, terminal capitalization rates and letters of intent, when applicable. Evaluating the reasonableness of the assumptions involved considering (i) the past performance of the real estate; (ii) evidence such as the underlying internal or market data related to the assumptions and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

February 22, 2021

We have served as the Company’s auditor since 2010.

F-3

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	December 31,
	2020		2019
Assets
Real estate investments, net of accumulated depreciation of $681,657 and $539,213 as of December 31, 2020 and 2019, respectively	$	5,285,038	$	5,341,370
Loans receivable and other investments, net	102,839		107,374
Investment in unconsolidated joint venture	288,761		319,460
Cash and cash equivalents	59,076		39,097
Restricted cash	6,447		10,046
Lease intangible assets, net	82,796		101,509
Accounts receivable, prepaid expenses and other assets, net	160,646		150,443
Total assets	$	5,985,603	$	6,069,299
Liabilities
Secured debt, net	$	79,065	$	113,070
Term loans, net	1,044,916		1,040,258
Senior unsecured notes, net	1,248,393		1,248,773
Accounts payable and accrued liabilities	146,276		108,792
Lease intangible liabilities, net	57,725		69,946
Total liabilities	2,576,375		2,580,839
Commitments and contingencies (Note 15)	0		0
Equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2020 and 2019	0		0
Common stock, $0.01 par value; 500,000,000 shares authorized, 210,560,815 and 205,208,018 shares issued and outstanding as of December 31, 2020 and 2019, respectively	2,106		2,052
Additional paid-in capital	4,163,228		4,072,079
Cumulative distributions in excess of net income	(716,195)		(573,283)
Accumulated other comprehensive loss	(39,911)		(12,388)
Total equity	3,409,228		3,488,460
Total liabilities and equity	$	5,985,603	$	6,069,299

See accompanying notes to consolidated financial statements.

F-4

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

	Year Ended December 31,
	2020		2019		2018
Revenues:
Rental and related revenues	$	430,584	$	452,138	$	536,605
Interest and other income	11,940		81,540		16,667
Resident fees and services	156,045		128,058		70,137
Total revenues	598,569		661,736		623,409
Expenses:
Depreciation and amortization	176,737		181,549		191,379
Interest	100,424		126,610		147,106
Triple-net portfolio operating expenses	20,590		22,215		0
Senior housing - managed portfolio operating expenses	110,963		86,257		49,546
General and administrative	32,755		30,886		37,094
Provision for straight-line rent reserves, loan losses and other reserves	1,855		1,238		39,075
Impairment of real estate	4,003		121,819		1,413
Total expenses	447,327		570,574		465,613
Other income (expense):
Loss on extinguishment of debt	(531)		(16,340)		(2,917)
Other income	2,154		2,094		4,480
Net gain on sales of real estate	2,861		2,300		128,198
Total other income (expense)	4,484		(11,946)		129,761
Income before loss from unconsolidated joint venture and income tax expense	155,726		79,216		287,557
Loss from unconsolidated joint venture	(16,599)		(6,796)		(5,431)
Income tax expense	(710)		(3,402)		(3,011)
Net income	138,417		69,018		279,115
Net income attributable to noncontrolling interest	0		(22)		(33)
Net income attributable to Sabra Health Care REIT, Inc.	138,417		68,996		279,082
Preferred stock dividends	0		0		(9,768)
Net income attributable to common stockholders	$	138,417	$	68,996	$	269,314
Net income attributable to common stockholders, per:
Basic common share	$	0.67	$	0.37	$	1.51
Diluted common share	$	0.67	$	0.37	$	1.51
Weighted-average number of common shares outstanding, basic	206,223,503		187,172,210		178,305,738
Weighted-average number of common shares outstanding, diluted	207,252,830		188,127,092		178,721,744

See accompanying notes to consolidated financial statements.

F-5

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except footnote data)

	Year Ended December 31,
	2020		2019		2018
Net income	$	138,417	$	69,018	$	279,115
Other comprehensive (loss) income:
Unrealized (loss) gain, net of tax:
Foreign currency translation (loss) gain	(315)		679		720
Unrealized (loss) gain on cash flow hedges (1)	(27,208)		(25,368)		292
Total other comprehensive (loss) income	(27,523)		(24,689)		1,012
Comprehensive income	110,894		44,329		280,127
Comprehensive income attributable to noncontrolling interest	0		(22)		(33)
Comprehensive income attributable to Sabra Health Care REIT, Inc.	$	110,894	$	44,307	$	280,094

(1)    Amounts are net of income tax benefit of $138,000, $49,000 and $48,000 for the years ended December 31, 2020, 2019 and 2018, respectively.

See accompanying notes to consolidated financial statements.

F-6

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands, except share and per share amounts)

	Preferred Stock			Common Stock			Additional Paid-in Capital		Cumulative Distributions in Excess of Net Income		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amounts		Shares	Amounts
Balance, December 31, 2017	5,750,000	$	58	178,255,843	$	1,783	$	3,636,913	$	(217,236)	$	11,289	$	3,432,807	$	4,442	$	3,437,249
Cumulative effect of ASU 2017-12 adoption	—	—		—	—		—		(795)		795		—		—		0
Net income	—	—		—	—		—		279,082		—		279,082		33		279,115
Other comprehensive income	—	—		—	—		—		—		217		217		—		217
Distributions to noncontrolling interest	—	—		—	—		—		—		—		—		(142)		(142)
Amortization of stock-based compensation	—	—		—	—		9,574		—		—		9,574		—		9,574
Preferred stock redemption	(5,750,000)	(58)		—	—		(138,191)		(5,501)		—		(143,750)		—		(143,750)
Common stock issuance, net	—	—		50,685	0		(371)		—		—		(371)		—		(371)
Preferred dividends	—	—		—	—		—		(4,267)		—		(4,267)		—		(4,267)
Common dividends ($1.80 per share)	—	—		—	—		—		(322,878)		—		(322,878)		—		(322,878)
Balance, December 31, 2018	0	0		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	—	—		—	—		—		68,996		—		68,996		22		69,018
Other comprehensive loss	—	—		—	—		—		—		(24,689)		(24,689)		—		(24,689)
Buyout of noncontrolling interest	—	—		—	—		4,039		—		—		4,039		(4,039)		0
Distributions to noncontrolling interest	—	—		—	—		—		—		—		—		(316)		(316)
Amortization of stock-based compensation	—	—		—	—		12,567		—		—		12,567		—		12,567
Common stock issuance, net	—	—		26,901,490	269		547,548		—		—		547,817		—		547,817
Common dividends ($1.80 per share)	—	—		—	—		—		(338,182)		—		(338,182)		—		(338,182)
Balance, December 31, 2019	0	0		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	—	—		—	—		—		138,417		—		138,417		0		138,417
Other comprehensive loss	—	—		—	—		—		—		(27,523)		(27,523)		—		(27,523)
Amortization of stock-based compensation	—	—		—	—		10,769		—		—		10,769		—		10,769
Common stock issuance, net	—	—		5,352,797	54		80,380		—		—		80,434		—		80,434
Common dividends ($1.35 per share)	—	—		—	—		—		(281,162)		—		(281,162)		—		(281,162)
Balance, December 31, 2020	0	$	0	210,560,815	$	2,106	$	4,163,228	$	(716,195)	$	(39,911)	$	3,409,228	$	0	$	3,409,228

See accompanying notes to consolidated financial statements.

F-7

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2020		2019		2018
Cash flows from operating activities:
Net income	$	138,417	$	69,018	$	279,115
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	176,737		181,549		191,379
Non-cash rental and related revenues	(4,458)		(19,449)		(36,443)
Non-cash interest income	(2,351)		(2,212)		(2,300)
Non-cash interest expense	8,418		10,080		10,137
Stock-based compensation expense	7,907		9,819		7,648
Non-cash lease termination income	0		(10,579)		0
Loss on extinguishment of debt	531		16,340		2,917
Provision for loan losses and other reserves	1,855		1,238		39,075
Net gain on sales of real estate	(2,861)		(2,300)		(128,198)
Impairment of real estate	4,003		121,819		1,413
Loss from unconsolidated joint venture	16,599		6,796		5,431
Distributions of earnings from unconsolidated joint venture	12,795		13,865		8,910
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets, net	(6,398)		(9,639)		(6,753)
Accounts payable and accrued liabilities	3,658		(13,870)		(11,745)
Net cash provided by operating activities	354,852		372,475		360,586
Cash flows from investing activities:
Acquisition of real estate	(92,945)		(51,136)		(261,511)
Origination and fundings of loans receivable	(1,651)		(13,065)		(50,731)
Origination and fundings of preferred equity investments	(20,069)		0		(5,313)
Additions to real estate	(47,354)		(25,451)		(27,697)
Repayments of loans receivable	4,093		18,367		51,789
Repayments of preferred equity investments	3,419		5,079		6,870
Net proceeds from sales of real estate	16,751		329,050		382,560
Investment in unconsolidated joint venture	0		0		(354,461)
Distributions in excess of earnings from unconsolidated joint venture	1,305		0		0
Net cash (used in) provided by investing activities	(136,451)		262,844		(258,494)
Cash flows from financing activities:
Net repayments of revolving credit facility	0		(624,000)		(17,000)
Proceeds from issuance of senior unsecured notes	0		638,779		0
Principal payments on senior unsecured notes	0		(700,000)		0
Principal payments on term loans	0		(145,000)		0
Principal payments on secured debt	(3,072)		(3,436)		(140,338)
Payments of deferred financing costs	(830)		(15,598)		(352)
Payments related to extinguishment of debt	0		(10,502)		(2,043)
Distributions to noncontrolling interest	0		(316)		(142)
Preferred stock redemption	0		0		(143,750)
Issuance of common stock, net	80,092		549,328		(499)
Dividends paid on common stock	(278,299)		(335,435)		(325,220)
Net cash used in financing activities	(202,109)		(646,180)		(629,344)
Net increase (decrease) in cash, cash equivalents and restricted cash	16,292		(10,861)		(527,252)
Effect of foreign currency translation on cash, cash equivalents and restricted cash	88		346		(539)
Cash, cash equivalents and restricted cash, beginning of period	49,143		59,658		587,449
Cash, cash equivalents and restricted cash, end of period	$	65,523	$	49,143	$	59,658

See accompanying notes to consolidated financial statements.

F-8

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

	Year Ended December 31,
	2020		2019		2018
Supplemental disclosure of cash flow information:
Interest paid	$	92,589	$	123,854	$	137,668
Income taxes paid	$	2,439	$	3,911	$	1,800
Supplemental disclosure of non-cash investing activities:
Decrease in loans receivable and other investments due to acquisition of real estate	$	20,731	$	0	$	0
Secured debt assumed by buyers in connection with sales of real estate	$	31,830	$	0	$	0

See accompanying notes to consolidated financial statements.

F-9

SABRA HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.BUSINESS

Overview

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 a 49% equity interest in the Enlivant Joint Venture (as defined below).

COVID-19

In March 2020, the World Health Organization declared COVID-19 a pandemic, and the United States declared a national emergency with respect to COVID-19. 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. In December 2020, distribution of the COVID-19 vaccine began to all 50 states, and while states have the authority over who receives the vaccine, the Centers for Disease Control and Prevention recommended that the initial distribution prioritize healthcare workers and residents of long-term care facilities. However, governmental restrictions may remain in place for a significant amount of time. The ongoing COVID-19 pandemic and measures intended to prevent its spread have negatively impacted and are expected to continue to negatively impact the Company and its operations in a number of ways, including but not limited to:

•Decreased occupancy and increased operating costs for the Company’s tenants and borrowers, which have 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 significantly 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 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Skilled Nursing Facility Reimbursement Rates” in Part II, Item 7), although these benefits on an individual operator basis vary and may not provide enough relief to meet their rental obligations to the Company. 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 December 31, 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”),

F-10

which 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. 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. During the year ended December 31, 2020, the Company recognized government grants under the CARES Act and other programs of $5.3 million. Prolonged deterioration in the operating results for 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 year ended December 31, 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 consolidated financial statements include the accounts of Sabra and its wholly owned subsidiaries as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018. All significant intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

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 December 31, 2020, the Company determined that it was 0t the 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 December 31, 2020 and 2019, 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 December 31, 2020, the Company’s determination of which entity controls its investments in joint ventures has not changed as a result of any reassessment.

F-11

Use of Estimates

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

Reclassifications

Certain amounts in the Company’s consolidated statements of income 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 loss from unconsolidated joint venture as well as its consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of equity since 2018, which impacted the annual periods previously issued. These errors resulted in understating (overstating) previously recorded loss from unconsolidated joint venture and overstating (understating) previously recorded net income by $0.1 million and ($1.7) million for the years ended December 31, 2019 and 2018, respectively. These out of period adjustments were recorded during the year ended December 31, 2020, resulting in a decrease to loss from unconsolidated joint venture and an increase to net income of $1.6 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.

Real Estate Investments and Rental Revenue Recognition

Real Estate Acquisition Valuation

All assets acquired and liabilities assumed in an acquisition of real estate accounted for as a business combination are measured at their acquisition date fair values. For acquisitions of real estate accounted for as an asset acquisition, the fair value of consideration transferred by the Company (including transaction costs) is allocated to all assets acquired and liabilities assumed on a relative fair value basis. The acquisition value of land, building and improvements are included in real estate investments on the accompanying consolidated balance sheets. The acquisition value of above market lease, tenant origination and absorption costs and tenant relationship intangible assets is included in lease intangible assets, net on the accompanying consolidated balance sheets. The acquisition value of below market lease intangible liabilities is included in lease intangible liabilities, net on the accompanying consolidated balance sheets. Acquisition costs associated with real estate acquisitions deemed asset acquisitions are capitalized, and costs associated with real estate acquisitions deemed business combinations are expensed as incurred. Restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date.

Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The Company makes its best estimate based on the Company’s evaluation of the specific characteristics of each tenant’s lease. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income.

Depreciation and Amortization

Real estate costs related to the acquisition and improvement of properties are capitalized and amortized on a straight-line basis over the lesser of the expected useful life of the asset and the remaining lease term of any property subject to a ground lease. Tenant improvements are capitalized and amortized on a straight-line basis over the lesser of the expected useful life of the asset and the remaining lease term. Depreciation is discontinued when a property is identified as held for sale. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Depreciation of real estate assets and amortization of tenant origination and absorption costs and tenant relationship lease intangibles are included in depreciation and amortization on the accompanying consolidated statements of income. Amortization of above and below market lease intangibles is included in rental income on the accompanying consolidated statements of income. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: land improvements, five to 20 years; buildings and building improvements, five to

F-12

40 years; and furniture and equipment, three to 10 years. Intangibles are generally amortized over the remaining noncancellable lease terms, with tenant relationship intangible amortization periods including extension periods of up to 10 years.

Impairment of Real Estate Investments

The Company regularly monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate investments may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate investments may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of its real estate investments through the future cash flows and the eventual disposition of the investment. In some instances, there may be various potential outcomes for an investment and its potential future cash flows. In these instances, the future cash flows used to assess recoverability are based on several assumptions and are probability-weighted based on the Company’s best estimates as of the date of evaluation. These assumptions include, among others, cash flow projections, holding period, market capitalization rates, and letters of intent, purchase and sale agreements and recent sales data for comparable properties. When necessary, a discount rate assumption may be used to determine fair value. The assumptions are generally based on management’s experience in its local real estate markets, and the effects of current market conditions, which are subject to economic and market uncertainties. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of its real estate investments, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of its real estate investments.

Revenue Recognition

The Company recognizes rental revenue from tenants, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when it is probable that substantially all rents over the life of a lease are collectible. Certain of the Company’s leases provide for contingent rents equal to a percentage of the facility’s revenue in excess of specified base amounts or other thresholds. Such revenue is recognized when actual results reported by the tenant, or estimates of tenant results, exceed the applicable base amount or other threshold.

The Company assesses the collectability of rents on a lease-by-lease basis, and in doing so, considers such things as historical bad debts, tenant creditworthiness, current economic trends, facility operating performance, lease structure, credit enhancements (including guarantees), current developments relevant to a tenant’s business specifically and to its business category generally, and changes in tenants’ payment patterns. The Company’s assessment includes an estimation of a tenant’s ability to fulfill all of its rental obligations over the remaining lease term. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. If at any time the Company cannot determine that it is probable that substantially all rents over the life of a lease are collectible, rental revenue will be recognized only to the extent of payments received, and all receivables associated with the lease will be written off irrespective of amounts expected to be collectible. Any recoveries of these amounts will be recorded in future periods upon receipt of payment. Write-offs of receivables and any recoveries of previously written-off receivables are recorded as adjustments to rental revenue.

Revenue from resident fees and services is recorded monthly as services are provided and includes resident room and care charges, ancillary services charges and other resident charges.

Government Grants

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 December 31, 2020, the amount of qualifying expenditures exceeded amounts recognized under the CARES Act and other programs, and the Company had complied with all grant conditions. Accordingly, during the year ended December 31, 2020, the Company recognized $1.8 million of grants in resident fees and services and $3.5 million of grants in loss from unconsolidated joint venture in the accompanying consolidated statements of income.

Assets Held for Sale, Dispositions and Discontinued Operations

The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as assets held for sale and are included in accounts receivable, prepaid expenses and other assets, net on the accompanying consolidated balance sheets. Secured indebtedness and other liabilities related to real estate held for sale

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are classified as liabilities related to assets held for sale and are included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. As of December 31, 2020 and 2019, the Company did 0t have any assets held for sale.

For sales of real estate where the Company has collected the consideration to which it is entitled in exchange for transferring the real estate, the related assets and liabilities are removed from the balance sheet and the resultant gain or loss is recorded in the period in which the transaction closes. Any post-sale involvement is accounted for as separate performance obligations, and when the separate performance obligations are satisfied, the portion of the sales price allocated to each such obligation is recognized.

Additionally, the Company records the operating results related to real estate that has been disposed of or classified as held for sale as discontinued operations for all periods presented if it represents a strategic shift that has or will have a major effect on the Company’s operations and financial results.

Investment in Unconsolidated Joint Venture

The Company reports investments in unconsolidated entities over whose operating and financial policies it has the ability to exercise significant influence under the equity method of accounting. Under this method of accounting, the Company’s share of the investee’s earnings or losses is included in the Company’s consolidated statements of income. The initial carrying value of the investment is based on the amount paid to purchase the joint venture interest. Differences between the Company’s cost basis and the basis reflected at the joint venture level are generally amortized over the lives of the related assets and liabilities, and such amortization is included in the Company’s share of earnings of the joint venture. In addition, distributions received from unconsolidated entities are classified based on the nature of the activity or activities that generated the distribution.

The Company regularly monitors events and changes in circumstances that could indicate that the carrying amounts of its equity method investments may not be recoverable or realized. When indicators of potential impairment are identified, the Company evaluates its equity method investments for impairment based on a comparison of the fair value of the investment to its carrying value. The fair value is estimated based on discounted cash flows that include all estimated cash inflows and outflows over a specified holding period and any estimated debt premiums or discounts. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of its equity method investment, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of its equity method investment.

Loans Receivable and Interest Income

Loans Receivable

The Company’s loans receivable are reflected at amortized cost on the accompanying consolidated balance sheets. The amortized cost of a loan receivable is the outstanding unpaid principal balance, net of unamortized discounts, costs and fees directly associated with the origination of the loan.

Loans acquired in connection with a business combination are recorded at their acquisition date fair value. The Company determines the fair value of loans receivable based on estimates of expected discounted cash flows, collateral, credit risk and other factors. The Company does not establish a valuation allowance at the acquisition date, as the amount of estimated future cash flows reflects its judgment regarding their uncertainty. The Company recognizes the difference between the acquisition date fair value and the total expected cash flows as interest income using the effective interest method over the life of the applicable loan. The Company immediately recognizes in income any unamortized balances if the loan is repaid before its contractual maturity.

On a quarterly basis, the Company evaluates the collectability of its loan portfolio, including the portion of unfunded loan commitments expected to be funded, and establishes an allowance for credit losses. 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. The allowance for credit losses is a valuation allowance that reflects management’s estimate of losses inherent in the loan portfolio as of the balance sheet date. The reserve is adjusted through provision for loan losses and other reserves on the Company’s consolidated statements of income and is decreased by charge-offs to specific loans when losses are confirmed.

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Interest Income

Interest income on the Company’s loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination costs are amortized over the term of the loan as an adjustment to interest income. When concerns exist as to the ultimate collection of principal or interest due under a loan, the loan is placed on nonaccrual status, and the Company will not recognize interest income until the cash is received, or the loan returns to accrual status. If the Company determines that the collection of interest according to the contractual terms of the loan or through the receipts of assets in satisfaction of contractual amounts due is probable, the Company will resume the accrual of interest. In instances where borrowers are in default under the terms of their loans, the Company may continue recognizing interest income provided that all amounts owed under the contractual terms of the loan, including accrued and unpaid interest, do not exceed the estimated fair value of the collateral, less costs to sell.

On a quarterly basis, the Company evaluates the collectability of its interest income receivable and establishes a reserve for amounts not expected to be collected. The Company’s evaluation includes reviewing credit quality indicators such as payment status, changes affecting the operations of the facilities securing the loans, and national and regional economic factors. The reserve is a valuation allowance that reflects management’s estimate of losses inherent in the interest income receivable balance as of the balance sheet date. The reserve is adjusted through provision for loan losses and other reserves on the Company’s consolidated statements of income and is decreased by charge-offs to specific receivables when losses are confirmed.

Preferred Equity Investments and Preferred Return

Preferred equity investments are accounted for at unreturned capital contributions, plus accrued and unpaid preferred returns. The Company recognizes preferred return income on a monthly basis based on the outstanding investment including any previously accrued and unpaid return. As a preferred member of the preferred equity joint ventures in which the Company participates, the Company is not entitled to share in the joint venture’s earnings or losses. Rather, the Company is entitled to receive a preferred return, which is deferred if the cash flow of the joint venture is insufficient to currently pay the accrued preferred return.

The Company regularly monitors events and changes in circumstances that could indicate that the carrying amounts of its preferred equity investments may not be recoverable or realized. On a quarterly basis, the Company evaluates its preferred equity investments for impairment based on a comparison of the fair value of the investment to its carrying value. The fair value is estimated based on discounted cash flows that include all estimated cash inflows and outflows over a specified holding period. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of its preferred equity investment, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of its preferred equity investment.

Cash and Cash Equivalents

The Company considers all short-term (with an original maturity of three months or less), highly-liquid investments utilized as part of the Company’s cash-management activities to be cash equivalents. Cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value.

The Company’s cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2020. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. The Company has a corporate banking relationship with Bank of America, N.A. in which it deposits the majority of its cash.

Restricted Cash

Restricted cash primarily consists of amounts held by an exchange accommodation titleholder or by secured debt lenders to provide for future real estate tax expenditures, tenant improvements and capital expenditures. Pursuant to the terms of the Company’s leases with certain tenants, the Company has assigned its interests in certain of these restricted cash accounts with secured debt lenders to the tenants, and this amount is included in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. As of December 31, 2020 and 2019, restricted cash totaled $6.4 million and $10.0 million, respectively, and restricted cash obligations totaled $3.5 million and $5.6 million, respectively.

Stock-Based Compensation

Stock-based compensation expense for stock-based awards granted to Sabra’s employees (team members) and its non-employee directors is recognized in the statements of income based on the estimated grant date fair value, as adjusted. Compensation expense for awards with graded vesting schedules is generally recognized ratably over the period from the grant date to the date when the award is no longer contingent on the recipient providing additional services. Compensation expense

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for awards with performance-based vesting conditions is recognized based on the Company’s estimate of the ultimate value of such award after considering the Company’s expectations of future performance. Forfeitures of stock-based awards are recognized as they occur.

Deferred Financing Costs

Deferred financing costs representing fees paid to third parties are amortized over the terms of the respective financing agreements using the interest method. Deferred financing costs related to secured debt, term loans and senior unsecured notes are recorded as a reduction of the related debt liability, and deferred financing costs related to the revolving credit facility are recorded in accounts receivable, prepaid expenses and other assets, net. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financings that do not close are expensed in the period in which it is determined that the financing will not close.

Income Taxes

The Company elected to be treated as a REIT with the filing of its U.S. federal income tax return for the taxable year beginning January 1, 2011. The Company believes that it has been organized and operated, and it intends to continue to operate, in a manner to qualify as a REIT. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gains and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and operates in such a manner as to qualify for treatment as a REIT.

As a result of certain investments, the Company now records income tax expense or benefit with respect to certain of its entities that are taxed as taxable REIT subsidiaries under provisions similar to those applicable to regular corporations and not under the REIT provisions.

The Company accounts for deferred income taxes using the asset and liability method and recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s financial statements or tax returns. Under this method, the Company determines deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in the Company’s judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if the Company believes it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in the Company’s judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur. 

The Company evaluates its tax positions using a two-step approach: step one (recognition) occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination, and step two (measurement) is only addressed if step one has been satisfied (i.e., the position is more likely than not to be sustained). Under step two, the tax benefit is measured as the largest amount of benefit (determined on a cumulative probability basis) that is more likely than not to be realized upon ultimate settlement. The Company will recognize tax penalties relating to unrecognized tax benefits as additional tax expense.

Foreign Currency

Certain of the Company’s subsidiaries’ functional currencies are the local currencies of their respective foreign jurisdictions. The Company translates the results of operations of its foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period presented, and it translates balance sheet accounts using exchange rates in effect at the end of the period presented. The Company records resulting currency translation adjustments in accumulated other comprehensive loss, a component of stockholders’ equity, on its consolidated balance sheets, and it records foreign currency transaction gains and losses as a component of interest and other income on its consolidated statements of income.

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Derivative Instruments

The Company uses certain types of derivative instruments for the purpose of managing interest rate and currency risk. To qualify for hedge accounting, derivative instruments used for risk management purposes must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception, the Company must make an assessment that the transaction that the Company intends to hedge is probable of occurring, and this assessment must be updated each reporting period.

The Company recognizes all derivative instruments as assets or liabilities on the consolidated balance sheets at their fair value. For derivatives designated and qualified as a hedge, the change in fair value of the effective portion of the derivatives is recognized in accumulated other comprehensive loss. Changes in the fair value of derivative instruments that are not designated in hedging relationships or that do not meet the criteria for hedge accounting would be recognized in earnings.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategy for undertaking various hedge transactions. This process includes designating all derivatives that are part of a hedging relationship to specific transactions, as well as recognizing obligations or assets on the consolidated balance sheets. The Company also assesses and documents, both at inception of the hedging relationship and on a quarterly basis thereafter, whether the derivatives are highly effective in offsetting the designated risks associated with the respective hedged items. If it is determined that a derivative ceases to be highly effective as a hedge, or that it is probable the underlying transaction will not occur, the Company would discontinue hedge accounting prospectively and record the appropriate adjustment to earnings based on the then-current fair value of the derivative.

Fair Value Measurements

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:

•Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

•Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

•Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items as Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company may use several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) to establish a fair value. If more than one valuation source is used, the Company will assign weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach.

Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument.

The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a

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significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market).

The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities.

Per Share Data

Basic earnings per common share is computed by dividing net income applicable to common stockholders by the weighted average number of shares of common stock and common equivalents outstanding during the period. Diluted earnings per common share is calculated by including the effect of dilutive securities. See Note 14, “Earnings Per Common Share.”

Industry Segments

The Company has 1 reportable segment consisting of investments in healthcare-related real estate properties.

Beds, Units and Other Measures

The number of beds, units and other measures used to describe the Company’s real estate investments included in the Notes to Consolidated Financial Statements are presented on an unaudited basis.

Recently Issued Accounting Standards Update

Adopted

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs (“Topic 842”) using the modified retrospective transition method. Topic 842 supersedes guidance related to accounting for leases and provides for the recognition of lease assets and lease liabilities by lessees for those leases previously classified as operating leases under GAAP. In addition, the Company elected to use the available practical expedients, and therefore did not reassess classification of its existing leases and did not separate lease and nonlease components (such as services rendered). As a result of electing these practical expedients, the Company, beginning January 1, 2019, recognizes revenue from its leased skilled nursing/transitional care facilities, Senior Housing - Leased communities, and specialty hospitals and other facilities under Topic 842 and recognizes revenue from its Senior Housing - Managed communities under the Revenue ASUs (codified under Topic 606). Upon adoption of Topic 842, the Company recognized its operating leases for which it is the lessee, mainly its corporate office lease and ground leases, as a lease liability of $10.0 million, included in accounts payable and accrued liabilities on the consolidated balance sheets, and a corresponding right-of-use asset, included in accounts receivable, prepaid expenses and other assets, net on the consolidated balance sheets. Upon adoption of Topic 842 and as of the adoption date, the Company recorded a $32.5 million reduction in equity and accounts receivable due to the cumulative effect of this change. This reduction consisted of $17.5 million of straight-line rental income receivables and $15.0 million of cash rent receivables, although management believes the $15.0 million of cash rent receivables are collectible.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued 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 Topic 842. In

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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 sales-type 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.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 updates the fair value measurement disclosure requirements by (i) eliminating certain requirements, including disclosure of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements, (ii) modifying certain requirements, including clarifying that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date and (iii) adding certain requirements, including disclosure of the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years and interim periods within those years beginning after December 15, 2019, with early adoption permitted for any eliminated or modified disclosures. The Company adopted ASU 2018-13 on January 1, 2020. The adoption of ASU 2018-13 did not have a material impact on the Company’s consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes the liability and equity separation models for convertible instruments. Instead, entities will account for convertible debt instruments wholly as debt unless convertible instruments contain features that require bifurcation as a derivative or that result in substantial premiums accounted for as paid-in capital. ASU 2020-06 also requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020, and can be adopted on either a retrospective or modified retrospective basis. The Company adopted ASU 2020-06 on January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements.

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. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which refines the

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scope of Topic 848 and clarifies some of its guidance. 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 year ended December 31, 2020, the Company acquired 3 Senior Housing - Leased communities and 1 Senior Housing - Managed community. These investments were part of the Company’s proprietary development pipeline, and $20.7 million was previously funded through its preferred equity investments in these developments. During the year ended December 31, 2019, the Company acquired 1 Senior Housing - Leased community, 3 specialty hospitals/other facilities and 1 Senior Housing - Managed community. The consideration was allocated as follows (in thousands):

	Year Ended December 31,
	2020		2019
Land	$	5,800	$	10,049
Building and improvements	104,952		39,434
Tenant origination and absorption costs intangible assets	2,578		1,438
Tenant relationship intangible assets	347		215
Total consideration	$	113,677	$	51,136

The tenant origination and absorption costs intangible assets and tenant relationship intangible assets had weighted-average amortization periods as of the respective dates of acquisition of seven years and 25 years, respectively, for acquisitions completed during the year ended December 31, 2020, and six years and 21 years, respectively, for acquisitions completed during the year ended December 31, 2019.

For the year ended December 31, 2020, the Company recognized $12.5 million and $4.8 million of total revenues and net income attributable to common stockholders, respectively, from the facilities acquired during the year ended December 31, 2020. For the year ended December 31, 2019, the Company recognized $0.8 million and $0.4 million of total revenues and net income attributable to common stockholders, respectively, from the facilities acquired during the year ended December 31, 2019.

4.REAL ESTATE PROPERTIES HELD FOR INVESTMENT

Real Estate Investments

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

As of December 31, 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	31,761	$	3,644,470	$	(385,094)	$	3,259,376
Senior Housing - Leased	65	4,282	707,634		(87,600)		620,034
Senior Housing - Managed	47	4,924	942,996		(142,538)		800,458
Specialty Hospitals and Other	27	1,092	670,793		(66,021)		604,772
	426	42,059	5,965,893		(681,253)		5,284,640
Corporate Level			802		(404)		398
			$	5,966,695	$	(681,657)	$	5,285,038

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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

	December 31, 2020		December 31, 2019
Building and improvements	$	5,120,598	$	5,042,435
Furniture and equipment	249,034		239,229
Land improvements	2,220		1,534
Land	594,843		597,385
	5,966,695		5,880,583
Accumulated depreciation	(681,657)		(539,213)
	$	5,285,038	$	5,341,370

Operating Leases

As of December 31, 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 16 years. As of December 31, 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 consolidated balance sheets and totaled $17.5 million and $10.5 million as of December 31, 2020 and 2019, respectively, and letters of credit deposited with the Company totaled approximately $85 million and $83 million as of December 31, 2020 and 2019, respectively. In addition, the Company’s tenants have deposited with the Company $16.9 million and $14.3 million as of December 31, 2020 and 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 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 variable lease revenue and the associated expense of $20.9 million and $17.6 million during the years ended December 31, 2020 and 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.

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During the year ended December 31, 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 year ended December 31, 2020, no tenant relationship represented 10% or more of the Company’s total revenues.

As of December 31, 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):

2021	$	434,074
2022	418,547
2023	408,367
2024	409,357
2025	399,984
Thereafter	1,561,535
	$	3,631,864

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 ancillary service revenue of $0.9 million, $0.8 million and $0.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Investment in Unconsolidated Joint Venture

The Company has a 49% equity interest in 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. During the year ended December 31, 2020, the Enlivant Joint Venture sold 12 senior housing communities for aggregate gross proceeds of $18.2 million, and the Company recorded an aggregate net loss on sale of real estate related to unconsolidated joint venture of $3.3 million. During the year ended December 31, 2019, the Enlivant Joint Venture sold 2 senior housing communities for aggregate gross proceeds of $6.3 million, and the Company recorded an aggregate net loss on sale of real estate related to unconsolidated joint venture of $1.7 million. As of December 31, 2020, the Enlivant Joint Venture owned 158 senior housing communities, and the book value of the Company’s investment in the Enlivant Joint Venture was $288.8 million.

The following tables present summarized financial information for the Enlivant Joint Venture and, except for basis adjustments and loss from unconsolidated joint venture, reflect the historical cost basis of the assets which pre-dated the Company’s investment in the Enlivant Joint Venture (in thousands):

	As of December 31,
	2020		2019
Total assets	$	490,541	$	504,920
Total liabilities	824,410		815,299
Member’s deficit	(333,869)		(310,379)

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	Year Ended December 31,
	2020		2019		2018
Total revenues	$	299,031	$	312,055	$	303,486
Operating expenses	240,331		231,659		228,458
Net income	5,196		13,161		10,378
Company’s share of net income	$	2,546	$	6,449	$	5,085
Basis adjustments	19,145		13,245		10,516
Loss from unconsolidated joint venture	$	(16,599)	$	(6,796)	$	(5,431)

The Enlivant Joint Venture has experienced decreased occupancy and increased operating costs as a result of the impact from the COVID-19 pandemic that, if they continue to negatively impact the operating results of the Enlivant Joint Venture for a prolonged period, could result in the determination that the full amount of the Company’s investment is not recoverable, resulting in a possible impairment charge.

Net Investment in Sales-Type Lease

During the year ended December 31, 2020, the Company modified its direct financing lease and reassessed the classification of this lease in accordance with Topic 842 and determined the lease should be accounted for as a sales-type lease. As of December 31, 2020, the Company had a $24.2 million net investment in 1 skilled nursing/transitional care facility leased to an operator under a sales-type lease, as the tenant is obligated to purchase the property at the end of the lease term. The net investment in sales-type lease is recorded in accounts receivable, prepaid expenses and other assets, net on the accompanying consolidated balance sheets and represents the present value of total rental payments of $2.3 million, plus the estimated purchase price of $24.8 million, less the unearned lease income of $2.8 million and allowance for credit losses of $0.1 million as of December 31, 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 sales-type lease was $2.7 million, $2.7 million and $2.6 million for the years ended December 31, 2020, 2019 and 2018, respectively, and is reflected in interest and other income on the accompanying 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 year ended December 31, 2020, the Company reduced its allowance for credit losses by $0.1 million. Future minimum lease payments contractually due under the sales-type lease at December 31, 2020, were as follows: $2.3 million for 2021, $2.4 million for 2022 and $0.8 million for 2023.

5.IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS

2020

Impairment of Real Estate

During the year ended December 31, 2020, the Company recognized a $4.0 million real estate impairment related to 1 skilled nursing/transitional care facility sold during the year and 3 senior housing communities.

Dispositions

During the year ended December 31, 2020, the Company completed the sale of 8 skilled nursing/transitional care facilities for aggregate consideration, net of closing costs, of $50.0 million. The net carrying value of the assets and liabilities of these facilities was $47.1 million, which resulted in an aggregate $2.9 million net gain on sale.

During the year ended December 31, 2020, the Company recognized $4.0 million of net income, which includes the $2.9 million net gain on sale and $0.6 million of real estate impairment, during the year ended December 31, 2019, the Company recognized $12.6 million of net loss, which includes $15.5 million of real estate impairment, and during the year ended December 31, 2018, the Company recognized $5.4 million of net income, 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.

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2019

Impairment of Real Estate

During the year ended December 31, 2019, the Company recognized a $121.8 million real estate impairment, of which $95.2 million related to the 30 Senior Care Centers facilities that the Company sold and 1 additional Senior Care Centers facility that the Company transitioned to another operator, and the remaining $26.6 million related to 6 skilled nursing/transitional care facilities that were subsequently sold, and 4 senior housing communities.

Dispositions

During the year ended December 31, 2019, the Company completed the sale of 39 skilled nursing/transitional care facilities and 7 senior housing communities for aggregate consideration, net of closing costs, of $323.6 million. The net carrying value of the assets and liabilities of these facilities was $321.3 million, resulting in an aggregate $2.3 million net gain on sale.

During the year ended December 31, 2019, the Company recognized $84.9 million of net loss, which includes $89.4 million of real estate impairment and the $2.3 million net gain on sale, and during the year ended December 31, 2018, recognized $19.1 million of net income, which includes $0.9 million of 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.

2018

Impairment of Real Estate

During the year ended December 31, 2018, the Company recognized a $1.4 million real estate impairment, of which $0.9 million related to 1 skilled nursing/transitional care facility that was subsequently sold and $0.5 million related to 1 senior housing community sold during the year.

Dispositions

During the year ended December 31, 2018, the Company completed the sale of 51 skilled nursing/transitional care facilities, 6 senior housing communities and 1 Senior Housing - Managed community for aggregate consideration, net of closing costs, of $382.6 million. The net carrying value of the assets and liabilities of these facilities was $254.4 million, resulting in an aggregate $128.2 million net gain on sale.

During the year ended December 31, 2018, the Company recognized $151.3 million of net income, which includes the $128.2 million net gain on sale and $0.5 million of real estate impairment. 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.

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6.INTANGIBLE ASSETS AND LIABILITIES

The following table summarizes the Company’s intangible assets and liabilities as of December 31, 2020 and 2019 (in thousands):

	December 31,
	2020		2019
Lease Intangible Assets:
Above market leases	$	35,695	$	51,040
Tenant origination and absorption costs	60,413		65,234
Tenant relationship	23,289		23,150
Gross lease intangible assets	119,397		139,424
Accumulated amortization	(36,601)		(37,915)
Lease intangible assets, net	$	82,796	$	101,509
Lease Intangible Liabilities:
Below market leases	$	89,389	$	99,133
Accumulated amortization	(31,664)		(29,187)
Lease intangible liabilities, net	$	57,725	$	69,946

The following is a summary of real estate intangible amortization income (expense) for the years ended December 31, 2020, 2019 and 2018 (in thousands): 

	Year Ended December 31,
	2020		2019		2018
Increase (decrease) to rental income related to above/below market leases, net	$	849	$	508	$	(7,701)
Depreciation and amortization related to tenant origination and absorption costs and tenant relationship	(10,620)		(17,674)		(16,118)

The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2020 will be amortized for the years ending December 31 as follows (dollars in thousands):

	Lease Intangible Assets		Lease Intangible Liabilities
2021	$	10,277	$	8,012
2022	9,936		7,269
2023	8,895		7,269
2024	8,480		7,168
2025	8,012		6,228
Thereafter	37,196		21,779
	$	82,796	$	57,725
Weighted-average remaining amortization period	10.3 years		8.5 years

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7.LOANS RECEIVABLE AND OTHER INVESTMENTS

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

									December 31, 2020
Investment	Quantity as of December 31, 2020	Property Type	Principal Balance as of December 31, 2020 (1)		Book Value as of December 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 December 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	3,343		3,352		2,487		8.0	%	7.8	%	09/30/22
Other	16	Multiple	42,977		39,005		42,147		6.8	%	6.9	%	03/01/21- 08/31/28
	18		65,320		61,357		63,634		7.8	%	7.9	%
Allowance for loan losses			—		(2,458)		(564)
			$	65,320	$	58,899	$	63,070
Other Investments:
Preferred Equity	6	Skilled Nursing / Senior Housing	43,724		43,940		44,304		11.3	%	11.3	%	N/A
Total	24		$	109,044	$	102,839	$	107,374	9.2	%	9.3	%

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

As of December 31, 2020 and 2019, the Company had 4 loans receivable investments, with an aggregate principal balance of $2.1 million and $27.7 million, respectively, that were considered to have deteriorated credit quality. As of December 31, 2020 and 2019, the book value of the outstanding loans with deteriorated credit quality was $0.5 million and $4.2 million, respectively.

The following table presents changes in the accretable yield for the years ended December 31, 2020 and 2019 (in thousands):

	Year Ended December 31,
	2020		2019		2018
Accretable yield, beginning of period	$	39	$	449	$	2,483
Accretion recognized in earnings	(27)		(377)		(2,761)
Reduction due to payoff	0		(33)		0
Net reclassification from nonaccretable difference	0		0		727
Accretable yield, end of period	$	12	$	39	$	449

During the year ended December 31, 2020, the Company increased its allowance for loan losses by $1.9 million.

As of December 31, 2020, the Company had a $2.5 million allowance for loan losses. As of December 31, 2020, 2 loans receivable investments with 0 book value were on nonaccrual status. As of December 31, 2020, the Company did not consider any preferred equity investments to be impaired, and no preferred equity investments were on nonaccrual status.

During the year ended December 31, 2019, the Company recorded a $1.2 million provision for specific loan losses and increased its portfolio-based loan loss reserve by $4,000.

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.

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8.DEBT

Secured Indebtedness

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

Interest Rate Type	Principal Balance as of December 31, 2020 (1)		Principal Balance as of December 31, 2019 (1)		Weighted Average Interest Rate at December 31, 2020 (2)		Maturity Date
Fixed Rate	$	80,199	$	114,777	3.39	%	December 2021 -  August 2051

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

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

During the year ended December 31, 2020, the Company sold 3 facilities that secured an aggregate $31.8 million of debt which was assumed by the buyers of the facilities and recognized a $0.5 million loss on extinguishment of debt related to write-offs of deferred financing costs in connection with the sales.

During the year ended December 31, 2018, the Company (i) prepaid a $98.5 million variable rate secured term loan and recognized a $2.0 million loss on extinguishment of debt related to prepayment penalty fees associated with the early repayment of the loan and (ii) repaid $37.6 million of fixed rate debt secured by facilities sold during the year ended December 31, 2018 and recognized a $0.9 million loss on extinguishment of debt related to write-offs of deferred financing costs in connection with this repayment.

Senior Unsecured Notes

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

		Principal Balance as of December 31,
Title	Maturity Date	2020 (1)		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
5.38% 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 does not include premium, net of $6.4 million and deferred financing costs, net of $8.0 million as of December 31, 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.

5.5% Notes Due 2021. On January 23, 2014, the Operating Partnership and Sabra Capital Corporation, wholly owned subsidiaries of the Company (the “Issuers”), issued $350.0 million aggregate principal amount of 5.5% senior unsecured notes due 2021 (the “Original 2021 Notes”), and on October 10, 2014, they issued $150.0 million aggregate principal amount of 5.5% senior unsecured notes due 2021, which were treated as a single class with, and had the same terms as, the Original 2021 Notes (the additional notes and the Original 2021 Notes, together, the “2021 Notes”). The 2021 Notes accrued interest at a rate of 5.5% per annum payable semiannually on February 1 and August 1 of each year.

On June 29, 2019, the Issuers redeemed all $500.0 million aggregate principal amount outstanding of the 2021 Notes at a cash redemption price of 101.375% of the principal amount being redeemed, plus accrued and unpaid interest. The redemption resulted in $10.1 million of redemption related costs and write-offs for the year ended December 31, 2019, consisting of $6.9 million in payments made to noteholders and legal fees for early redemption and $3.2 million of write-offs associated with unamortized deferred financing and premium costs. These amounts are included in loss on extinguishment of debt on the accompanying consolidated statements of income.

5.375% Notes Due 2023. On May 23, 2013, the Issuers issued $200.0 million aggregate principal amount of 5.375% senior unsecured notes due 2023 (the “2023 Notes”). The 2023 Notes accrued interest at a rate of 5.375% per annum payable semiannually on June 1 and December 1 of each year.

On October 27, 2019, the Issuers redeemed all $200.0 million aggregate principal amount outstanding of the 2023 Notes at a cash redemption price of 101.792% of the principal amount being redeemed, plus accrued and unpaid interest. The redemption resulted in $5.6 million of redemption related costs and write-offs for the year ended December 31, 2019, consisting of $3.6 million in payments made to noteholders and legal fees for early redemption and $2.0 million of write-offs associated

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with unamortized deferred financing costs. These amounts are included in loss on extinguishment of debt on the accompanying consolidated statements of income.

4.80% Notes Due 2024. On May 29, 2019, the Issuers completed an underwritten public offering of $300.0 million aggregate principal amount of 4.80% senior unsecured notes due 2024 (the “2024 Notes”). The net proceeds were $295.3 million after deducting underwriting discounts and other offering expenses. The net proceeds, together with borrowings under the Revolving Credit Facility, were used to redeem the 2021 Notes as discussed above. The 2024 Notes accrue interest at a rate of 4.80% per annum payable semiannually on June 1 and December 1 of each year. Upon redemption of the 2023 Notes as discussed above, Sabra Capital Corporation’s obligations as a co-issuer under the 2024 Notes were automatically released and discharged.

The 2024 Notes are redeemable at the option of the Operating Partnership, in whole or in part at any time and from time to time, prior to May 1, 2024, at a price equal to 100% of the principal amount, together with any accrued and unpaid interest to, but not including, the redemption date, plus a make-whole premium. The Operating Partnership may also redeem the 2024 Notes on or after May 1, 2024, at a price equal to 100% of the principal amount, together with any accrued and unpaid interest to, but not including, the redemption date. Assuming the 2024 Notes are not redeemed, the 2024 Notes mature on June 1, 2024.

5.125% Notes Due 2026. In connection with the Company’s merger with Care Capital Properties (“CCP”), on August 17, 2017, the Operating Partnership assumed $500.0 million aggregate principal amount of 5.125% senior unsecured notes due 2026 (the “2026 Notes”) issued by Care Capital Properties, LP in July 2016. The 2026 Notes accrue interest at a rate of 5.125% per annum payable semiannually on February 15 and August 15 of each year.

The Operating Partnership may, at its option, redeem the 2026 Notes at any time in whole or from time to time in part prior to their stated maturity. The redemption price for 2026 Notes that are redeemed will be equal to (i) 100% of their principal amount, together with accrued and unpaid interest thereon, if any, to (but excluding) the date of redemption, plus, (ii) if redeemed prior to May 15, 2026, a make-whole premium. Assuming the 2026 Notes are not redeemed, the 2026 Notes mature on August 15, 2026.

5.38% Notes Due 2027. In connection with the Company’s merger with CCP, on August 17, 2017, the Operating Partnership assumed $100.0 million aggregate principal amount of unregistered 5.38% senior unsecured notes due 2027 (the “2027 Notes”) issued by Care Capital Properties, LP in May 2016. The 2027 Notes accrue interest at a rate of 5.38% per annum payable semiannually on May 17 and November 17 of each year.

The Operating Partnership may prepay the 2027 Notes, in whole at any time or in part from time to time, at 100% of the principal amount to be prepaid plus a make-whole premium. Assuming the 2027 Notes are not redeemed, the 2027 Notes mature on May 17, 2027.

3.90% Notes Due 2029. On October 7, 2019, the Issuers completed an underwritten public offering of $350.0 million aggregate principal amount of 3.90% senior unsecured notes due 2029 (the “2029 Notes”). The net proceeds were $340.5 million after deducting underwriting discounts and other offering expenses. A portion of the net proceeds was used to redeem all of the 2023 Notes as discussed above, and the remaining net proceeds were used to repay borrowings outstanding on the Revolving Credit Facility. The 2029 Notes accrue interest at a rate of 3.90% per annum payable semiannually on April 15 and October 15 of each year. Upon redemption of the 2023 Notes as discussed above, Sabra Capital Corporation’s obligations as a co-issuer under the 2029 Notes were automatically released and discharged.

The 2029 Notes are redeemable at the option of the Operating Partnership, in whole or in part at any time and from time to time, prior to July 15, 2029, at a price equal to 100% of the principal amount, together with any accrued and unpaid interest to, but not including, the redemption date, plus a make-whole premium. The Operating Partnership may also redeem the 2029 Notes on or after July 15, 2029, at a price equal to 100% of the principal amount, together with any accrued and unpaid interest to, but not including, the redemption date. Assuming the 2029 Notes are not redeemed, the 2029 Notes mature on October 15, 2029.

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.

The indenture governing the 2024 Notes contains restrictive covenants that, among other things, restrict the ability of Sabra, the Issuers and their restricted subsidiary to: (i) incur or guarantee additional indebtedness; (ii) incur or guarantee secured indebtedness; and (iii) merge or consolidate or sell all or substantially all of their assets. The indenture governing the 2024 Notes also provides for customary events of default, including, but not limited to, the failure to make payments of interest

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or premium, if any, on, or principal of, the 2024 Notes, the failure to comply with certain covenants and agreements specified in the indenture for a period of time after notice has been provided, the acceleration of other indebtedness resulting from the failure to pay principal on such other indebtedness prior to its maturity, and certain events of insolvency. If any event of default occurs, the principal of, premium, if any, and accrued interest on all the then-outstanding 2024 Notes may become due and payable immediately. The indenture governing the 2024 Notes requires Sabra, the Issuers and their restricted subsidiary to maintain Total Unencumbered Assets (as defined in the indentures) of at least 150% of the Company’s unsecured indebtedness.

The indenture governing the 2026 Notes contains certain covenants that, among other things, limits the ability of Sabra, the Issuers and their subsidiaries to: (i) consummate a merger, consolidate or sell all or substantially all of our consolidated assets and (ii) incur secured or unsecured indebtedness. In addition, Sabra, the Operating Partnership and their subsidiaries are required to maintain at all times consolidated unencumbered total asset value in an amount not less than 150% of the aggregate outstanding principal amount of the Company’s consolidated unsecured debt.

The agreement governing the 2027 Notes provides for customary events of default, including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal of, the 2027 Notes, the failure to comply with certain covenants and agreements specified in the agreement governing the 2027 Notes for a period of time after notice has been provided, the acceleration of other indebtedness resulting from the failure to pay principal on such other indebtedness prior to its maturity, and certain events of insolvency. In addition, certain change of control events constitute an event of default under the agreement governing the 2027 Notes. If any event of default occurs, the principal of, premium, if any, and accrued interest on all the then-outstanding 2027 Notes may become due and payable immediately.

The indenture governing the 2029 Notes contains restrictive covenants that, among other things, restrict the ability of Sabra, the Issuers and their subsidiaries to: (i) incur or guarantee additional indebtedness; (ii) incur or guarantee secured indebtedness; and (iii) merge or consolidate or sell all or substantially all of their assets. The indenture governing the 2029 Notes also provides for customary events of default, including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal of, the 2029 Notes, the failure to comply with certain covenants and agreements specified in the indenture for a period of time after notice has been provided, the acceleration of other indebtedness resulting from the failure to pay principal on such other indebtedness prior to its maturity, and certain events of insolvency. If any event of default occurs, the principal of, premium, if any, and accrued interest on all the then-outstanding 2029 Notes may become due and payable immediately. The indenture governing the 2029 Notes requires Sabra, the Issuers and their subsidiaries to maintain Total Unencumbered Assets (as defined in the indentures) of at least 150% of the Company’s unsecured indebtedness.

The Company was in compliance with all applicable financial covenants under the indentures and agreements (the “Senior Notes Indentures”) governing the 2024 Notes, 2026 Notes, 2027 Notes and 2029 Notes (collectively, the “Senior Notes”) outstanding as of December 31, 2020.

Credit Agreement

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”), $955.0 million in U.S. dollar term loans 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 December 31, 2020, there were 0 amounts outstanding under the Revolving Credit Facility and $1.0 billion 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 December 31, 2020, the interest rate on the Revolving Credit Facility was 1.24%.

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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. As of December 31, 2020, the interest rate on the U.S. dollar Term Loans was 1.39%. 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. As of December 31, 2020, the interest rate on the Canadian dollar Term Loan was 1.71%.

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 1.24% and an interest rate swap that fixes the CDOR portion of the interest rate for CAD $125.0 million of CDOR-based borrowings under its Canadian dollar Term Loan at a rate of 0.93%. In addition, CAD $125.0 million of the Canadian dollar Term Loan is designated as a net investment hedge. See Note 9, “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 December 31, 2020, the Company was in compliance with all applicable financial covenants under the Credit Agreement.

Interest Expense

During the years ended December 31, 2020, 2019 and 2018, the Company incurred interest expense of $100.4 million, $126.6 million and $147.1 million, respectively. Interest expense includes non-cash interest expense of $8.4 million, $10.1 million and $10.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020 and 2019, the Company had $16.1 million and $16.7 million, respectively, of accrued interest included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets.

Maturities

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

	Secured Indebtedness		Term Loans		Senior Notes		Total
2021	$	18,419	$	0	$	0	$	18,419
2022	2,412		105,000		0		107,412
2023	2,478		350,000		0		352,478
2024	2,545		598,100		300,000		900,645
2025	2,615		0		0		2,615
Thereafter	51,730		0		950,000		1,001,730
Total Debt	80,199		1,053,100		1,250,000		2,383,299
Premium, net	0		0		6,442		6,442
Deferred financing costs, net	(1,134)		(8,184)		(8,049)		(17,367)
Total Debt, Net	$	79,065	$	1,044,916	$	1,248,393	$	2,372,374

9.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

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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.

Cash Flow Hedges

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 December 31, 2020, approximately $13.0 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):  

	December 31, 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	$	52,778	$	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	$	3,522	$	1,811

(1)    Balance includes swaps with an aggregate notional amount of $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 collar have an aggregate notional amount of $245.0 million. Balance as of December 31, 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 December 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.

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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 December 31, 2020 and 2019 (dollars in thousands):    

		Count as of December 31, 2020	Fair Value				Maturity Dates
			December 31,
Type	Designation		2020		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	10,652		0		2034	Accounts receivable, prepaid expenses and other assets, net
Cross currency interest rate swaps	Net investment	2	2,150		3,238		2025	Accounts receivable, prepaid expenses and other assets, net
			$	12,802	$	7,477
Liabilities:
Interest rate swaps	Cash flow	10	$	23,849	$	0	2021-2024	Accounts payable and accrued liabilities
Interest rate collar	Cash flow	1	1,626		0		2024	Accounts payable and accrued liabilities
Forward starting interest rate swaps	Cash flow	4	10,723		494		2024	Accounts payable and accrued liabilities
Forward starting interest rate collar	Cash flow	1	820		132		2024	Accounts payable and accrued liabilities
CAD term loan	Net investment	1	98,100		96,025		2024	Term loans, net
			$	135,118	$	96,651

The following presents the effect of the Company’s derivative and financial instruments designated as hedging instruments on the consolidated statements of income and the consolidated statements of equity for the years ended December 31, 2020, 2019 and 2018:

	(Loss) Gain Recognized in Other Comprehensive Income						(Loss) Gain Reclassified from Accumulated Other Comprehensive Income Into Income						Income Statement Location
	For the year ended December 31,
	2020		2019		2018		2020		2019		2018
Cash Flow Hedges:
Interest rate products	$	(35,320)	$	(19,932)	$	2,707	$	(8,072)	$	5,545	$	3,099	Interest expense
Net Investment Hedges:
Foreign currency products	(758)		(772)		3,554		0		0		0		N/A
CAD term loan	(2,075)		(4,325)		7,888		0		0		0		N/A
	$	(38,153)	$	(25,029)	$	14,149	$	(8,072)	$	5,545	$	3,099

During the years ended December 31, 2020, 2019 and 2018, 0 cash flow hedges were determined to be ineffective.

Derivatives Not Designated as Hedging Instruments

As of December 31, 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 $0.1 million and included this amount in accounts receivable, prepaid expenses and other assets, net on the consolidated balance sheets. During the years ended December 31, 2020, 2019 and 2018, the Company recorded $0.1 million of other expense and $5,000 and $34,000 of other income, respectively, related to the portion of derivatives not designated as hedging instruments.

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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 December 31, 2020 and 2019 (in thousands):

	As of December 31, 2020
							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		Financial Instruments		Cash Collateral Received		Net Amount
Offsetting Assets:
Derivatives	$	12,802	$	0	$	12,802	$	(7,420)	$	0	$	5,382
Offsetting Liabilities:
Derivatives	$	37,018	$	0	$	37,018	$	(7,420)	$	0	$	29,598

	As of December 31, 2019
							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		Financial Instruments		Cash Collateral Received		Net Amount
Offsetting Assets:
Derivatives	$	7,477	$	0	$	7,477	$	(544)	$	0	$	6,933
Offsetting Liabilities:
Derivatives	$	626	$	0	$	626	$	(544)	$	0	$	82

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 December 31, 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 $30.5 million. As of December 31, 2020, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions at December 31, 2020, it could have been required to settle its obligations under the agreements at their termination value of $29.6 million.

10.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 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 12% with a weighted average rate of 9% in its fair value calculation. As such, the Company classifies these instruments as Level 3.

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Preferred equity investments: These instruments are presented on the accompanying 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 10% to 15% with a weighted average rate of 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 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 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 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 2% to 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 December 31, 2020 and 2019 whose carrying amounts do not approximate their fair value (in thousands):

	December 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	$	65,320	$	58,899	$	60,421	$	67,527	$	63,070	$	59,832
Preferred equity investments	43,724		43,940		44,597		43,893		44,304		44,493
Financial liabilities:
Senior Notes	1,250,000		1,248,393		1,362,678		1,250,000		1,248,773		1,328,714
Secured indebtedness	80,199		79,065		79,326		114,777		113,070		105,510

(1)    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.

The Company determined the fair value of financial instruments as of December 31, 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
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Loans receivable	$	60,421	$	0	$	0	$	60,421
Preferred equity investments	44,597		0		0		44,597
Financial liabilities:
Senior Notes	1,362,678		0		1,362,678		0
Secured indebtedness	79,326		0		0		79,326

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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. Transaction volume for certain of the Company’s financial instruments remains relatively low, which has made the estimation of fair values 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 year ended December 31, 2020, the Company recorded the following amounts measured at fair value (in thousands):

			Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Basis:
Financial assets:
Forward starting interest rate swaps	$	10,652	$	0	$	10,652	$	0
Cross currency interest rate swaps	2,150		0		2,150		0
Financial liabilities:
Interest rate swaps	23,849		0		23,849		0
Interest rate collar	1,626		0		1,626		0
Forward starting interest rate swaps	10,723		0		10,723		0
Forward starting interest rate collars	820		0		820		0

11.EQUITY

Preferred Stock

The Company redeemed all 5,750,000 shares of its 7.125% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) on June 1, 2018 (the “Redemption Date”) for $25.00 per share, plus accrued and unpaid dividends to, but not including, the Redemption Date, without interest, in the amount of $0.4453125 per share of Series A Preferred Stock, for a total redemption price per share of Series A Preferred Stock equal to $25.4453125. As a result of the redemption, the Company incurred a charge of $5.5 million related to the original issuance costs of the Series A Preferred Stock. The charge is presented as an additional preferred stock dividend in the Company’s consolidated statements of income for the year ended December 31, 2018.

Common Stock

On February 25, 2019, the Company established an at-the-market equity offering program (the “Prior ATM Program”) to sell shares of its common stock having an aggregate gross sales price of up to $500.0 million from time to time through a consortium of banks acting as sales agents. On December 5, 2019, the Prior ATM Program automatically terminated in accordance with its terms upon the issuance and sale of the maximum aggregate amount of the shares subject to the Prior ATM Program.

On December 11, 2019, the Company established a new ATM 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 year ended December 31, 2020, the Company sold 3.7 million shares under the ATM Program at an average price of $16.23 per share, generating gross proceeds of $60.0 million, before $0.9 million of commissions (excluding sales utilizing the forward feature of the ATM Program, as described below). During the year ended December 31, 2019, the Company sold an aggregate 26.8 million shares under the ATM Program and Prior ATM Program at an average price of $20.92 per share, generating gross proceeds of $560.0 million, before $7.7 million of commissions.

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Additionally, during the year ended December 31, 2020, the Company utilized the forward feature of the ATM Program to allow for the sale of up to an aggregate sales price of $45.3 million of the Company’s common stock at an initial weighted average price of $17.44 per share, net of commissions. The forward sale agreements have a one year term during which time the Company may settle the forward sales by delivery of physical shares of common stock to the forward purchasers or, at the Company’s election, in cash or net shares. The forward sale price that the Company expects to receive upon settlement will be the initial forward price established upon the effective date, subject to adjustments for (i) the forward purchasers’ stock borrowing costs and (ii) certain fixed price reductions during the term of the agreement. During the year ended December 31, 2020, the Company settled 1.4 million shares at a weighted average net price of $17.45 per share, after commissions, resulting in net proceeds of $25.0 million. As of December 31, 2020, 1.1 million shares remained outstanding under the forward sale agreements, with an initial weighted average price of $17.44, net of commissions.

As of December 31, 2020, the Company had $234.7 million available under the ATM Program.

Other Common Stock Issuances

During the years ended December 31, 2020 and 2019, the Company issued 0.2 million and 0.1 million shares of common stock as a result of restricted stock unit vestings, respectively.

Upon any payment of shares to team members as a result of restricted stock unit vestings, the team members’ 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 years ended December 31, 2020, 2019 and 2018, the Company incurred $3.2 million, $1.5 million and $0.4 million, respectively, in tax withholding obligations on behalf of its team members 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):

	Year Ended December 31,
	2020		2019
Foreign currency translation loss	$	(1,831)	$	(1,516)
Unrealized loss on cash flow hedges	(38,080)		(10,872)
Total accumulated other comprehensive loss	$	(39,911)	$	(12,388)

12.STOCK-BASED COMPENSATION

All stock-based awards are subject to the terms of the 2009 Performance Incentive Plan, which was assumed by the Company effective as of November 15, 2010 in connection with the Company’s separation from Sun and was most recently amended and restated in April 2017. The 2009 Performance Incentive Plan provides for the granting of stock-based compensation, including stock options, time-based stock units, funds from operations-based stock units (“FFO Units”), relative total stockholder return-based stock units (“TSR Units”) and performance-based restricted stock units to directors, officers and other team members in connection with their employment with or services provided to the Company.

Restricted Stock Units and Performance-Based Restricted Stock Units

Under the 2009 Performance Incentive Plan, restricted stock units and performance-based restricted stock units generally have a contractual life or vest over a three- to five-year period. The vesting of certain restricted stock units may accelerate, as defined in the grant, upon retirement, a change in control and other events. When vested (and subject to any applicable deferral or holdback period), each performance-based restricted stock unit is convertible into 1 share of common stock, subject to any deferrals in issuance pursuant to the grant. The restricted stock units are valued on the grant date based on the market price of the Company’s common stock on that date. Generally, the Company recognizes the fair value of the awards over the applicable vesting period as compensation expense. In addition, since the shares to be issued may vary based on the performance of the Company, the Company must make assumptions regarding the projected performance criteria and the shares that will ultimately be issued. The amount of FFO Units that will ultimately vest is dependent on the amount by which the Company’s funds from operations as adjusted (“FFO”) differs from a target FFO amount for a period specified in each grant and will range from 0% to 200% of the FFO Units initially granted. Similarly, the amount of TSR Units that will ultimately vest is dependent on the amount by which the total shareholder return (“TSR”) of the Company’s common stock differs from a predefined peer group for a period specified in each grant and will range from 0% to 200% of the TSR Units initially granted. Upon any payment of shares as a result of restricted stock unit vestings, the 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

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withholding obligation. The value of the shares withheld is dependent on the closing price of the Company’s common stock on the date the relevant transaction occurs.

The following table summarizes additional information concerning restricted stock units at December 31, 2020:

	Restricted Stock Units	Weighted Average Grant Date Fair Value Per Unit
Unvested as of December 31, 2019	1,737,862	$	18.35
Granted	623,523	17.13
Vested	(540,751)	17.84
Dividends reinvested	157,905	18.44
Cancelled/forfeited	(163,124)	20.70
Unvested as of December 31, 2020	1,815,415	$	17.88

As of December 31, 2020, the weighted average remaining vesting period of restricted stock units was 2.6 years. The weighted average fair value per share at the date of grant for restricted stock units for the years ended December 31, 2020, 2019 and 2018 was $17.13, $20.59 and $16.02, respectively. The total fair value of units vested during the years ended December 31, 2020, 2019 and 2018 was $10.7 million, $7.9 million and $3.6 million, respectively.

The fair value of the TSR Units is estimated on the date of grant using a Monte Carlo valuation model that uses the assumptions noted in the table below. The risk-free rate is based on the U.S. Treasury yield curve in effect at the grant date for the expected performance period. Expected volatility is based on historical volatility for the most recent 3-year period ending on the grant date for the Company and the selected peer companies, and is calculated on a daily basis. The following are the key assumptions used in this valuation:

	2020		2019		2018
Risk free interest rate	0.17% - 1.63%		1.57% - 2.54%		2.36% - 2.59%
Expected stock price volatility	23.80% - 53.17%		23.80% - 28.57%		28.57% - 30.02%
Expected service period	2.7 - 3.0 years		2.4 - 3.0 years		2.5 - 3.0 years
Expected dividend yield (assuming full reinvestment)	0	%	0	%	0	%

During the years ended December 31, 2020, 2019 and 2018, the Company recognized $7.9 million, $9.8 million and $7.6 million, respectively, of stock-based compensation expense included in general and administrative expense in the consolidated statements of income. As of December 31, 2020, there was $20.8 million of total unrecognized stock-based compensation expense related to unvested awards, which is expected to be recognized over a weighted average period of 2.6 years.

Employee Benefit Plan

The Company maintains a 401(k) plan that allows for eligible participants to defer compensation, subject to certain limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”). The Company provides a discretionary matching contribution of up to 4% of each participant’s eligible compensation. During each of the years ended December 31, 2020, 2019 and 2018, the Company’s matching contributions were approximately $0.2 million.

13.INCOME TAXES

The Company elected to be treated as a REIT with the filing of its U.S. federal income tax return for the taxable year beginning January 1, 2011. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of its taxable ordinary income. In addition, the Company is required to meet certain asset and income tests. As a REIT, the Company generally will not be subject to corporate level federal income tax on taxable income that it distributes to its stockholders. The Company also elected to treat certain of its consolidated subsidiaries as taxable REIT subsidiaries, which are subject to federal, state and foreign income taxes.

As a result of acquisitions in Canada during 2015, the Company is subject to income taxes under the laws of Canada. The Company recorded a $0.6 million, $0.5 million and $0.6 million income tax benefit during the years ended December 31, 2020, 2019 and 2018, respectively, with respect to its Canadian operations. Due to uncertainty over the Company’s ability to utilize this income tax benefit in future periods, the Company recorded a valuation allowance of $0.8 million, $0.5 million and $0.7 million against the deferred tax benefit during the years ended December 31, 2020, 2019 and 2018, respectively.

F-37

The Company classifies interest and penalties from significant uncertain tax positions as interest expense and operating expenses, respectively, in its consolidated financial statements. During the years ended December 31, 2020, 2019 and 2018, the Company did not incur any such interest or penalties. With certain exceptions, the tax years 2016 and thereafter remain open to examination by the major taxing jurisdictions with which the Company files tax returns.

14.EARNINGS PER COMMON SHARE

The following table illustrates the computation of basic and diluted earnings per share (in thousands, except share and per share amounts):

	Year Ended December 31,
	2020		2019		2018
Numerator
Net income attributable to common stockholders	$	138,417	$	68,996	$	269,314
Denominator
Basic weighted average common shares and common equivalents	206,223,503		187,172,210		178,305,738
Dilutive stock options and restricted stock units	1,029,327		954,882		416,006
Diluted weighted average common shares	207,252,830		188,127,092		178,721,744
Net income attributable to common stockholders, per:
Basic common share	$	0.67	$	0.37	$	1.51
Diluted common share	$	0.67	$	0.37	$	1.51

During the years ended December 31, 2020, 2019 and 2018, approximately 67,000, 1,000 and 121,000 restricted stock units, respectively, were not included in computing diluted earnings per share because they were considered anti-dilutive. NaN stock options were outstanding as of December 31, 2020 and 2019, and 0 stock options were considered anti-dilutive during the year ended December 31, 2018.

15.COMMITMENTS AND CONTINGENCIES

Environmental

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 December 31, 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.

Legal Matters

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.

16.SUBSEQUENT EVENTS

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

Dividend Declaration

On February 2, 2021, 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 February 26, 2021 to stockholders of record as of the close of business on February 12, 2021.

F-38

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended December 31, 2020, 2019 and 2018

(dollars in thousands)

	Balance at Beginning of Year		Charged to Earnings		Recoveries		Uncollectible Accounts Written-off		Balance at End of Year
Year ended December 31, 2020
Allowance for loan losses (1)	$	542	$	1,916	$	0	$	0	$	2,458
Allowance for credit losses - sales-type lease (1)	189		(61)		0		0		128
	$	731	$	1,855	$	0	$	0	$	2,586
Year ended December 31, 2019
Allowance for doubtful accounts (2)	$	3,706	$	0	$	0	$	(3,706)	$	0
Straight-line rent receivable allowance (2)	35,778		0		0		(35,778)		0
Allowance for loan losses	1,258		1,238		0		(1,932)		564
	$	40,742	$	1,238	$	0	$	(41,416)	$	564
Year ended December 31, 2018
Allowance for doubtful accounts	$	5,520	$	986	$	(2,718)	$	(82)	$	3,706
Straight-line rent receivable allowance	12,355		39,646		0		(16,223)		35,778
Allowance for loan losses	97		1,161		0		0		1,258
	$	17,972	$	41,793	$	(2,718)	$	(16,305)	$	40,742

(1)    In conjunction with the adoption of Topic 326 on January 1, 2020, the Company recognized the cumulative effect through an adjustment to equity to increase (decrease) cumulative distributions in excess of net income by ($22,000) and $189,000 for loan loss reserves and allowance for credit losses - sales-type lease, respectively. These amounts are included in the balances at beginning of year for 2020 but are excluded from the balances at end of year for 2019.

(2)    Balances written-off in connection with the adoption of Topic 842 on January 1, 2019.

F-39

SCHEDULE III

REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

As of December 31, 2020

(dollars in thousands)

				Initial Cost to Company						Cost Capitalized Subsequent to Acquisition		Gross Amount at which Carried at Close of Period										Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land		Building and Improve- ments(2)(3)		Total				Land		Building and Improve- ments(2)(3)		Total		Accumulated Depreciation and Amortization		Original Date of Construction/ Renovation	Date Acquired
Skilled Nursing/Transitional Care Facilities
Forest Hills (SNF)	Broken Arrow, OK	100%	(4)	$	1,653	$	11,259	$	12,912	$	0	$	1,653	$	9,409	$	11,062	$	(3,764)	1994/2008, 2009/2010, 2015	11/15/10	40
Seminole Estates	Seminole, OK	100%	0	655		3,527		4,182		0		655		3,134		3,789		(1,197)		1987/2020	11/15/10	32
Bedford Hills	Bedford, NH	100%	5,595	1,911		12,245		14,156		0		1,911		10,687		12,598		(4,434)		1992/2010, 2019	11/15/10	36
The Elms Care	Milford, NH	100%	0	312		1,679		1,991		0		312		1,289		1,601		(918)		1890/2005	11/15/10	20
Lake Drive	Henryetta, OK	100%	0	160		549		709		0		160		40		200		(34)		1968	11/15/10	10
Mineral Springs	North Conway, NH	100%	11,334	417		5,352		5,769		0		417		4,580		4,997		(1,890)		1988/2009	11/15/10	43
Wolfeboro	Wolfeboro, NH	100%	9,547	454		4,531		4,985		0		454		3,747		4,201		(1,397)		1984/1986, 1987, 2009	11/15/10	41
Broadmeadow Healthcare	Middletown, DE	100%	0	1,650		21,730		23,380		0		1,650		21,730		23,380		(5,905)		2005	08/01/11	40
Capitol Healthcare	Dover, DE	100%	0	4,940		15,500		20,440		0		4,940		15,500		20,440		(4,405)		1996/2016	08/01/11	40
Pike Creek Healthcare	Wilmington, DE	100%	0	2,460		25,240		27,700		0		2,460		25,240		27,700		(6,934)		2009	08/01/11	40
Renaissance Healthcare	Millsboro, DE	100%	0	1,640		22,620		24,260		0		1,640		22,620		24,260		(6,336)		2008	08/01/11	40
Clara Burke	Plymouth Meeting, PA	100%	0	2,527		12,453		14,980		179		2,527		12,632		15,159		(3,470)		1927/1990, 2007/2016	03/30/12	40
Warrington	Warrington, PA	100%	0	2,617		11,662		14,279		106		2,617		11,768		14,385		(2,959)		1958/2009/ 2016	03/30/12	40
Ridgecrest	Duffield, VA	100%	0	509		5,018		5,527		1,333		509		6,351		6,860		(1,975)		1981/2013	05/10/12	40
Arbrook Plaza	Arlington, TX	100%	0	3,783		14,219		18,002		0		3,783		14,219		18,002		(3,303)		2003/2012	11/30/12	40
Northgate Plaza	Irving, TX	100%	0	4,901		10,299		15,200		0		4,901		10,299		15,200		(2,465)		2003/2012, 2015	11/30/12	40
Gulf Pointe Plaza	Rockport, TX	100%	0	1,005		6,628		7,633		0		1,005		6,628		7,633		(1,667)		2002/2012, 2018	11/30/12	40
Gateway Senior Living	Lincoln, NE	100%	0	6,368		29,919		36,287		0		6,368		29,919		36,287		(5,824)		1962/1996, 2013	02/14/14	40
Legacy	Fremont, NE	100%	0	615		16,176		16,791		0		615		16,176		16,791		(3,454)		2008	02/14/14	40
Pointe	Fremont, NE	100%	0	615		2,943		3,558		0		615		2,943		3,558		(746)		1970/1979, 1983, 1994	02/14/14	40
Regency	South Sioux City, NE	100%	0	246		6,206		6,452		0		246		6,206		6,452		(1,614)		1962/1968, 1975, 2000, 2004	02/14/14	40
Parkmoor Village	Colorado Springs, CO	100%	0	430		13,703		14,133		0		430		13,703		14,133		(3,089)		1985/2017, 2018	03/05/14	40
Adams PARC	Bartlesville, OK	100%	0	1,332		6,904		8,236		115		1,332		7,019		8,351		(1,338)		1989/2019	10/29/14	40
PARCway	Oklahoma City, OK	100%	0	2,189		23,567		25,756		1,056		2,189		24,623		26,812		(4,405)		1963/1984, 2018, 2019	10/29/14	40

F-40

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Brookhaven Extensive Care	Norman, OK	100%	0	869	5,236	6,105	109	869	5,345	6,214	(1,134)	2001/2013, 2019	10/29/14	40
Cadia Healthcare of Hyattsville	Hyattsville, MD	100%	0	6,343	65,573	71,916	14	6,343	65,587	71,930	(10,867)	1950/1976, 2008	06/30/15	40
Cadia Healthcare of Annapolis	Annapolis, MD	100%	0	1,548	40,773	42,321	103	1,548	40,876	42,424	(6,314)	1964/1993, 2012	06/30/15	40
Cadia Healthcare of Wheaton	Wheaton, MD	100%	0	676	56,897	57,573	22	676	56,919	57,595	(8,618)	1966/1991, 2012	06/30/15	40
Cadia Healthcare of Hagerstown	Hagerstown, MD	100%	0	1,475	56,237	57,712	4,733	1,475	60,970	62,445	(8,200)	1950/1953, 1975, 2014, 2019, 2020	11/25/15	40
Cadia Healthcare of Spring Brook	Silver Spring, MD	100%	0	963	48,085	49,048	7	963	48,092	49,055	(5,945)	1965/2015	07/26/16	40
Andrew Residence	Minneapolis, MN	100%	0	2,931	6,943	9,874	565	2,931	7,462	10,393	(849)	1941/2014, 2019	08/17/17	40
Avamere Riverpark of Eugene	Eugene, OR	100%	0	2,205	28,700	30,905	2,252	2,205	30,952	33,157	(3,096)	1988/2016	08/17/17	40
Avamere Rehab of Lebanon	Lebanon, OR	100%	0	958	14,176	15,134	0	958	14,176	15,134	(1,277)	1974	08/17/17	40
Avamere Crestview of Portland	Portland, OR	100%	0	1,791	12,833	14,624	2,761	1,791	15,594	17,385	(1,824)	1964/2016	08/17/17	40
Avamere Rehabilitation of King City	Tigard, OR	100%	0	2,011	11,667	13,678	0	2,011	11,667	13,678	(1,086)	1975	08/17/17	40
Avamere Rehabilitation of Hillsboro	Hillsboro, OR	100%	0	1,387	14,028	15,415	0	1,387	14,028	15,415	(1,263)	1973	08/17/17	40
Avamere Rehab of Junction City	Junction City, OR	100%	0	584	7,901	8,485	0	584	7,901	8,485	(738)	1966/2015	08/17/17	40
Avamere Rehab of Eugene	Eugene, OR	100%	0	1,380	14,921	16,301	1,791	1,380	16,712	18,092	(1,801)	1966/2016	08/17/17	40
Avamere Rehab of Coos Bay	Coos Bay, OR	100%	0	829	8,518	9,347	0	829	8,518	9,347	(826)	1968	08/17/17	40
Avamere Rehab of Clackamas	Gladstone, OR	100%	0	792	5,000	5,792	0	792	5,000	5,792	(477)	1961	08/17/17	40
Avamere Rehab of Newport	Newport, OR	100%	0	406	5,001	5,407	0	406	5,001	5,407	(456)	1973/2014	08/17/17	40
Avamere Rehab of Oregon City	Oregon City, OR	100%	0	1,496	12,142	13,638	0	1,496	12,142	13,638	(1,093)	1974	08/17/17	40
Avamere Transitional Care of Puget Sound	Tacoma, WA	100%	0	1,771	11,595	13,366	15	1,771	11,610	13,381	(1,217)	2017	08/17/17	40
Richmond Beach Rehab	Shoreline, WA	100%	0	4,703	14,444	19,147	0	4,703	14,444	19,147	(1,347)	1993/2014	08/17/17	40
St. Francis of Bellingham	Bellingham, WA	100%	0	0	15,330	15,330	0	0	15,330	15,330	(1,442)	1984/2015	08/17/17	40
Avamere Olympic Rehabilitation of Sequim	Sequim, WA	100%	0	427	4,450	4,877	0	427	4,450	4,877	(502)	1974	08/17/17	40
Avamere Heritage Rehabilitation of Tacoma	Tacoma, WA	100%	0	1,705	4,952	6,657	0	1,705	4,952	6,657	(487)	1968	08/17/17	40
Avamere at Pacific Ridge	Tacoma, WA	100%	0	2,195	1,956	4,151	0	2,195	1,956	4,151	(255)	1972/2014	08/17/17	40
Avamere Rehabilitation of Cascade Park	Vancouver, WA	100%	0	1,782	15,116	16,898	0	1,782	15,116	16,898	(1,473)	1991	08/17/17	40
The Pearl at Kruse Way	Lake Oswego, OR	100%	0	5,947	13,401	19,348	0	5,947	13,401	19,348	(1,260)	2005/2016	08/17/17	40
Avamere at Medford	Medford, OR	100%	0	2,043	38,485	40,528	2,960	2,043	41,445	43,488	(4,091)	1974/2016	08/17/17	40

F-41

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Avamere Bellingham Healthcare and Rehab Services	Bellingham, WA	100%	0	2,908	2,058	4,966	0	2,908	2,058	4,966	(260)	1972/2015	08/17/17	40
Queen Anne Healthcare	Seattle, WA	100%	0	2,508	6,401	8,909	0	2,508	6,401	8,909	(609)	1970	08/17/17	40
Avamere Transitional Care and Rehab - Boise	Boise, ID	100%	0	681	9,348	10,029	0	681	9,348	10,029	(890)	1979	08/17/17	40
Avamere Transitional Care at Sunnyside	Salem, OR	100%	0	2,114	15,651	17,765	0	2,114	15,651	17,765	(1,451)	1981	08/17/17	40
Avamere Health Services of Rogue Valley	Medford, OR	100%	0	1,375	23,808	25,183	0	1,375	23,808	25,183	(2,227)	1961/2016	08/17/17	40
Avamere Transitional Care and Rehab - Malley	Northglenn, CO	100%	0	1,662	26,014	27,676	3,258	1,662	29,272	30,934	(3,114)	1972/2016	08/17/17	40
Avamere Transitional Care and Rehab - Brighton	Brighton, CO	100%	0	1,933	11,624	13,557	200	1,933	11,824	13,757	(1,124)	1971	08/17/17	40
Phoenix Rehabilitation Services	Phoenix, AZ	100%	0	1,270	11,502	12,772	0	1,270	11,502	12,772	(1,038)	2008	08/17/17	40
Tustin Subacute Care Facility	Santa Ana, CA	100%	0	1,889	11,682	13,571	0	1,889	11,682	13,571	(1,025)	2008	08/17/17	40
La Mesa Inpatient Rehabilitation Facility	La Mesa, CA	100%	0	1,276	8,177	9,453	0	1,276	8,177	9,453	(746)	2012	08/17/17	40
Golden Living Center - Westminster	Westminster, MD	100%	0	2,128	6,614	8,742	487	2,128	7,101	9,229	(913)	1973/2010, 2019	08/17/17	40
Maple Wood Care Center	Kansas City, MO	100%	0	1,142	3,226	4,368	653	1,142	3,879	5,021	(784)	1983	08/17/17	40
Garden Valley Nursing & Rehab	Kansas City, MO	100%	0	1,985	2,714	4,699	303	1,985	3,017	5,002	(711)	1983	08/17/17	40
Worthington Nursing & Rehab	Parkersburg, WV	100%	0	697	10,688	11,385	285	697	10,973	11,670	(1,293)	1974/1999, 2019	08/17/17	40
Burlington House Rehabilitative and Alzheimer’s Care Center	Cincinnati, OH	100%	0	2,686	10,062	12,748	0	2,686	10,062	12,748	(1,083)	1989/2015	08/17/17	40
Golden Living Center - Charlottesville	Charlottesville, VA	100%	0	2,840	8,450	11,290	1,176	2,840	9,626	12,466	(1,193)	1964/2009, 2019	08/17/17	40
Golden Living Center - Sleepy Hollow	Annandale, VA	100%	0	7,241	17,727	24,968	2,032	7,241	19,759	27,000	(2,190)	1963/2013, 2019	08/17/17	40
Golden Living Center - Petersburg	Petersburg, VA	100%	0	988	8,416	9,404	146	988	8,562	9,550	(922)	1970/2009	08/17/17	40
Golden Living Center - Battlefield Park	Petersburg, VA	100%	0	1,174	8,858	10,032	151	1,174	9,009	10,183	(955)	1976/2010	08/17/17	40
Golden Living Center - Hagerstown	Hagerstown, MD	100%	0	1,393	13,438	14,831	150	1,393	13,588	14,981	(1,376)	1971/2010	08/17/17	40
Golden Living Center - Cumberland	Cumberland, MD	100%	0	800	16,973	17,773	457	800	17,430	18,230	(1,760)	1968	08/17/17	40
Gilroy Healthcare and Rehabilitation Center	Gilroy, CA	100%	0	662	23,775	24,437	0	662	23,775	24,437	(2,117)	1968	08/17/17	40
North Cascades Health and Rehabilitation Center	Bellingham, WA	100%	0	1,437	14,196	15,633	0	1,437	14,196	15,633	(1,323)	1999	08/17/17	40
Granite Rehabilitation & Wellness	Cheyenne, WY	100%	0	387	13,613	14,000	2,246	387	15,859	16,246	(1,806)	1967/2017	08/17/17	40
Rawlins Rehabilitation & Wellness	Rawlins, WY	100%	0	281	6,007	6,288	0	281	6,007	6,288	(556)	1967	08/17/17	40

F-42

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Wind River Rehabilitation & Wellness	Riverton, WY	100%	0	199	11,398	11,597	0	199	11,398	11,597	(1,028)	1967	08/17/17	40
Sage View Care Center	Rock Springs, WY	100%	0	420	8,665	9,085	0	420	8,665	9,085	(815)	1964/2017	08/17/17	40
Shelton Health and Rehabilitation Center	Shelton, WA	100%	0	415	8,965	9,380	0	415	8,965	9,380	(899)	1998	08/17/17	40
Dundee Nursing Home	Bennettsville, SC	100%	0	1,437	4,631	6,068	0	1,437	4,631	6,068	(477)	1958	08/17/17	40
Mt. Pleasant Nursing Center	Mount Pleasant, SC	100%	0	2,689	3,942	6,631	0	2,689	3,942	6,631	(431)	1977/2015	08/17/17	40
Tri-State Comp Care Center	Harrogate, TN	100%	0	1,811	4,963	6,774	0	1,811	4,963	6,774	(554)	1990/2005	08/17/17	40
Epic-Conway	Conway, SC	100%	0	1,408	10,784	12,192	0	1,408	10,784	12,192	(1,083)	1975	08/17/17	40
Epic- Bayview	Beaufort, SC	100%	0	1,842	11,389	13,231	0	1,842	11,389	13,231	(1,110)	1970	08/17/17	40
Focused Care at Baytown	Baytown, TX	100%	0	479	6,351	6,830	209	479	6,457	6,936	(647)	1970/2019	08/17/17	40
Focused Care at Allenbrook	Baytown, TX	100%	0	426	3,236	3,662	173	426	3,372	3,798	(429)	1975/2019	08/17/17	40
Focused Care at Huntsville	Huntsville, TX	100%	0	302	3,153	3,455	75	302	3,201	3,503	(359)	1968/2019	08/17/17	40
Focused Care at Center	Center, TX	100%	0	231	1,335	1,566	312	231	1,556	1,787	(253)	1972/2019	08/17/17	40
Focused Care at Humble	Humble, TX	100%	0	2,114	1,643	3,757	596	2,114	2,100	4,214	(389)	1972/2019	08/17/17	40
Focused Care at Beechnut	Houston, TX	100%	0	1,019	5,734	6,753	318	1,019	5,876	6,895	(628)	1982/2019	08/17/17	40
Focused Care at Linden	Linden, TX	100%	0	112	256	368	133	112	331	443	(82)	1968/2019	08/17/17	40
Focused Care at Sherman	Sherman, TX	100%	0	469	6,310	6,779	255	469	6,400	6,869	(663)	1971/2019	08/17/17	40
Focused Care at Mount Pleasant	Mount Pleasant, TX	100%	0	250	6,913	7,163	345	250	7,249	7,499	(768)	1970/2019	08/17/17	40
Focused Care at Waxahachie	Waxahachie, TX	100%	0	416	7,259	7,675	582	416	7,789	8,205	(773)	1976/2019	08/17/17	40
Focused Care at Gilmer	Gilmer, TX	100%	0	707	4,552	5,259	93	707	4,605	5,312	(505)	1990/2019	08/17/17	40
Hearthstone of Northern Nevada	Sparks, NV	100%	0	1,986	9,004	10,990	0	1,986	9,004	10,990	(902)	1988	08/17/17	40
Golden Living Center - Richmond	Richmond, IN	100%	0	259	9,819	10,078	131	259	9,950	10,209	(936)	1975/2005	08/17/17	40
Golden Living Center - Petersburg	Petersburg, IN	100%	0	581	5,367	5,948	23	581	5,390	5,971	(547)	1970/2009	08/17/17	40
Beverly Health - Ft. Pierce	Fort Pierce, FL	100%	0	787	16,648	17,435	0	787	16,648	17,435	(1,525)	1960/2011	08/17/17	40
Maryville	Maryville, MO	100%	0	114	5,955	6,069	0	150	5,955	6,105	(625)	1972	08/17/17	40
Ashland Healthcare	Ashland, MO	100%	0	765	2,669	3,434	0	765	2,669	3,434	(300)	1993	08/17/17	40
Bellefontaine Gardens	St. Louis, MO	100%	0	2,071	5,739	7,810	0	2,071	5,739	7,810	(645)	1988/1991	08/17/17	40
Current River Nursing Center	Doniphan, MO	100%	0	657	8,251	8,908	0	657	8,251	8,908	(816)	1991	08/17/17	40
Dixon Nursing & Rehab	Dixon, MO	100%	0	521	3,358	3,879	0	521	3,358	3,879	(360)	1989/2011	08/17/17	40
Forsyth Nursing & Rehab	Forsyth, MO	100%	0	594	8,549	9,143	0	594	8,549	9,143	(858)	1993/2007	08/17/17	40
Glenwood Healthcare	Seymour, MO	100%	0	658	901	1,559	0	658	901	1,559	(126)	1990	08/17/17	40

F-43

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Silex Community Care	Silex, MO	100%	0	807	4,990	5,797	0	807	4,990	5,797	(508)	1991	08/17/17	40
South Hampton Place	Columbia, MO	100%	0	2,322	6,547	8,869	0	2,322	6,547	8,869	(677)	1994	08/17/17	40
Strafford Care Center	Strafford, MO	100%	0	1,634	6,518	8,152	0	1,634	6,518	8,152	(659)	1995	08/17/17	40
Windsor Healthcare & Rehab	Windsor, MO	100%	0	471	6,819	7,290	0	471	6,819	7,290	(625)	1996	08/17/17	40
Park Manor of Conroe	Conroe, TX	100%	0	1,222	19,099	20,321	0	1,222	19,099	20,321	(1,711)	2001	08/17/17	40
Park Manor of Cypress Station	Houston, TX	100%	0	1,334	11,615	12,949	0	1,334	11,615	12,949	(1,084)	2003/2013	08/17/17	40
Park Manor of Humble	Humble, TX	100%	0	1,541	12,332	13,873	645	1,541	12,977	14,518	(1,306)	2003/2019	08/17/17	40
Park Manor of Quail Valley	Missouri City, TX	100%	0	1,825	9,681	11,506	0	1,825	9,681	11,506	(939)	2005	08/17/17	40
Park Manor of Westchase	Houston, TX	100%	0	2,676	7,396	10,072	0	2,676	7,396	10,072	(734)	2005	08/17/17	40
Park Manor of CyFair	Houston, TX	100%	0	1,732	12,921	14,653	0	1,732	12,921	14,653	(1,197)	1999	08/17/17	40
Park Manor of McKinney	McKinney, TX	100%	0	1,441	9,017	10,458	0	1,441	9,017	10,458	(911)	1993/2012	08/17/17	40
Tanglewood Health and Rehabilitation	Topeka, KS	100%	0	176	2,340	2,516	0	176	2,340	2,516	(250)	1973/2013	08/17/17	40
Smoky Hill Health and Rehabilitation	Salina, KS	100%	0	301	4,201	4,502	0	301	4,201	4,502	(428)	1981	08/17/17	40
Belleville Health Center	Belleville, KS	100%	0	600	1,664	2,264	0	600	1,664	2,264	(213)	1977	08/17/17	40
Westridge Healthcare Center	Terre Haute, IN	100%	0	1,067	7,061	8,128	0	1,067	7,061	8,128	(677)	1965/1984	08/17/17	40
Willow Bend Living Center	Muncie, IN	100%	0	1,168	9,562	10,730	0	1,168	9,562	10,730	(874)	1976/1986	08/17/17	40
Twin City Healthcare	Gas City, IN	100%	0	345	8,852	9,197	0	345	8,852	9,197	(808)	1974	08/17/17	40
Pine Knoll Rehabilitation Center	Winchester, IN	100%	0	711	5,554	6,265	0	711	5,554	6,265	(535)	1986/1998	08/17/17	40
Willow Crossing Health & Rehab Center	Columbus, IN	100%	0	1,290	10,714	12,004	0	1,290	10,714	12,004	(983)	1988/2004	08/17/17	40
Persimmon Ridge Center	Portland, IN	100%	0	315	9,848	10,163	0	315	9,848	10,163	(917)	1964	08/17/17	40
Vermillion Convalescent Center	Clinton, IN	100%	0	884	9,839	10,723	0	884	9,839	10,723	(962)	1971	08/17/17	40
Las Vegas Post Acute & Rehabilitation	Las Vegas, NV	100%	0	509	18,216	18,725	0	509	18,216	18,725	(1,598)	1964	08/17/17	40
Torey Pines Rehabilitation Hospital	Las Vegas, NV	100%	0	3,169	7,863	11,032	0	3,169	7,863	11,032	(777)	1972/1997	08/17/17	40
Villa Campana Rehabilitation Hospital	Tucson, AZ	100%	0	1,800	4,387	6,187	1,131	1,800	5,518	7,318	(591)	1983/2011, 2020	08/17/17	40
Kachina Point Rehabilitation Hospital	Sedona, AZ	100%	0	2,035	10,981	13,016	714	2,035	11,695	13,730	(1,136)	1984/2011	08/17/17	40
Bay View Rehabilitation Hospital	Alameda, CA	100%	0	3,078	22,328	25,406	0	3,078	22,328	25,406	(2,003)	1967	08/17/17	40
Dover Center for Health & Rehabilitation	Dover, NH	100%	0	522	5,839	6,361	0	522	5,839	6,361	(729)	1969/1992, 2017	08/17/17	40
Augusta Center for Health & Rehabilitation	Augusta, ME	100%	0	135	6,470	6,605	0	135	6,470	6,605	(635)	1967	08/17/17	40
Eastside Center for Health & Rehabilitation	Bangor, ME	100%	0	302	1,811	2,113	2,112	302	3,923	4,225	(281)	1967/1993, 2019	08/17/17	40

F-44

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Winship Green Center for Health & Rehabilitation	Bath, ME	100%	0	250	1,934	2,184	0	250	1,934	2,184	(212)	1974	08/17/17	40
Brewer Center for Health & Rehabilitation	Brewer, ME	100%	—	177	14,497	14,674	2,436	177	16,933	17,110	(1,450)	1974/1990, 2019	08/17/17	40
Kennebunk Center for Health & Rehabilitation	Kennebunk, ME	100%	0	198	6,822	7,020	76	198	6,898	7,096	(659)	1977	08/17/17	40
Norway Center for Health & Rehabilitation	Norway, ME	100%	0	791	3,680	4,471	0	791	3,680	4,471	(384)	1976	08/17/17	40
Brentwood Center for Health & Rehabilitation	Yarmouth, ME	100%	0	134	2,072	2,206	0	134	2,072	2,206	(232)	1952	08/17/17	40
Country Center for Health & Rehabilitation	Newburyport, MA	100%	0	269	4,436	4,705	0	269	4,436	4,705	(575)	1968/2009	08/17/17	40
Sachem Center for Health & Rehabilitation	E. Bridgewater, MA	100%	0	447	1,357	1,804	0	447	1,357	1,804	(216)	1968	08/17/17	40
Eliot Center for Health & Rehabilitation	Natick, MA	100%	0	475	1,491	1,966	0	475	1,491	1,966	(204)	1964	08/17/17	40
The Reservoir Center for Health & Rehabilitation	Marlborough, MA	100%	0	942	1,541	2,483	8,727	942	10,268	11,210	(1,276)	1973/2018	08/17/17	40
Newton Wellesley Center for Alzheimer’s Care	Wellesley, MA	100%	0	1,186	13,917	15,103	0	1,186	13,917	15,103	(1,277)	1971	08/17/17	40
Colony Center for Health & Rehabilitation	Abington, MA	100%	0	1,727	2,103	3,830	0	1,727	2,103	3,830	(268)	1965	08/17/17	40
Westgate Center for Rehab & Alzheimer’s Care	Bangor, ME	100%	0	229	7,171	7,400	203	229	7,374	7,603	(716)	1969/1993	08/17/17	40
New Orange Hills	Orange, CA	100%	0	4,163	14,755	18,918	0	4,163	14,755	18,918	(1,390)	1987/2020	08/17/17	40
Millbrook Healthcare & Rehabilitation Center	Lancaster, TX	100%	0	548	5,794	6,342	0	548	5,794	6,342	(600)	2008	08/17/17	40
Pleasant Valley Health & Rehab	Garland, TX	100%	0	1,118	7,490	8,608	0	1,118	7,490	8,608	(739)	2008	08/17/17	40
Focused Care at Clarksville	Clarksville, TX	100%	0	279	4,269	4,548	100	279	4,369	4,648	(496)	1989/2019	08/17/17	40
McKinney Healthcare & Rehab	McKinney, TX	100%	0	1,272	6,047	7,319	0	1,272	6,047	7,319	(641)	2006	08/17/17	40
Golden Living Center - Hopkins	Hopkins, MN	100%	0	807	4,668	5,475	530	807	5,198	6,005	(672)	1961/2008, 2019	08/17/17	40
Golden Living Center - Florence	Florence, WI	100%	0	291	3,778	4,069	0	291	3,778	4,069	(418)	1970	08/17/17	40
Golden Living Center - South Shore	St. Francis, WI	100%	0	166	1,887	2,053	0	166	1,887	2,053	(217)	1960/1997	08/17/17	40
Golden Living Center - Rochester East	Rochester, MN	100%	0	645	7,067	7,712	178	645	7,245	7,890	(727)	1967/2011, 2019	08/17/17	40
Golden Living Center - Wisconsin Dells	Wisconsin Dells, WI	100%	0	1,640	1,599	3,239	0	1,640	1,599	3,239	(238)	1972/2006	08/17/17	40
Golden Living Center - Sheboygan	Sheboygan, WI	100%	0	1,038	2,839	3,877	0	1,038	2,839	3,877	(358)	1967/2012	08/17/17	40
Golden Living Center - Hendersonville	Hendersonville, NC	100%	0	1,611	3,503	5,114	0	1,611	3,503	5,114	(407)	1979	08/17/17	40
Focused Care at Corpus	Corpus Christi, TX	100%	0	366	6,961	7,327	127	51	1,061	1,112	(373)	1973/2010	08/17/17	40
Focused Care at Burnet Bay	Baytown, TX	100%	0	579	22,317	22,896	103	579	22,420	22,999	(2,022)	2000/2013	08/17/17	40

F-45

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Focused Care at Cedar Bayou	Baytown, TX	100%	0	589	20,475	21,064	328	589	20,803	21,392	(1,952)	2008	08/17/17	40
Focused Care at Westwood	Houston, TX	100%	0	1,300	13,353	14,653	31	1,300	13,384	14,684	(1,298)	2006	08/17/17	40
Focused Care at Pasadena	Pasadena, TX	100%	0	1,148	23,579	24,727	38	1,148	23,617	24,765	(2,170)	2004	08/17/17	40
Focused Care at Webster	Webster, TX	100%	0	904	10,315	11,219	24	904	10,339	11,243	(1,027)	2000/2009	08/17/17	40
Focused Care at Summer Place	Beaumont, TX	100%	0	945	20,424	21,369	253	945	20,677	21,622	(1,875)	2009	08/17/17	40
Focused Care at Orange	Orange, TX	100%	0	711	10,737	11,448	171	711	10,908	11,619	(1,034)	2006	08/17/17	40
Signature Healthcare of Whitesburg Gardens	Huntsville, AL	100%	0	634	28,071	28,705	0	634	28,071	28,705	(2,479)	1968/2012	08/17/17	40
Signature Healthcare of Terre Haute	Terre Haute, IN	100%	0	644	37,451	38,095	0	644	37,451	38,095	(3,716)	1996/2013	08/17/17	40
Signature Healthcare at Larkin Springs	Madison, TN	100%	0	902	3,850	4,752	0	902	3,850	4,752	(465)	1969/2016	08/17/17	40
Signature Healthcare of Savannah	Savannah, GA	100%	0	1,235	3,765	5,000	0	1,235	3,765	5,000	(476)	1970/2015	08/17/17	40
Signature Healthcare of Bluffton	Bluffton, IN	100%	0	254	5,105	5,359	0	254	5,105	5,359	(549)	1970/2015	08/17/17	40
Signature Healthcare of Bowling Green	Bowling Green, KY	100%	0	280	13,975	14,255	0	280	13,975	14,255	(1,364)	1970/2015	08/17/17	40
Oakview Nursing and Rehabilitation Center	Calvert City, KY	100%	0	1,176	7,012	8,188	0	1,176	7,012	8,188	(727)	1962/2015	08/17/17	40
Fountain Circle Care and Rehabilitation Center	Winchester, KY	100%	0	554	13,207	13,761	0	554	13,207	13,761	(1,316)	1967/2015	08/17/17	40
Riverside Care & Rehabilitation Center	Calhoun, KY	100%	0	613	7,643	8,256	0	613	7,643	8,256	(814)	1963/2015	08/17/17	40
Signature Healthcare of Bremen	Bremen, IN	100%	0	173	7,393	7,566	0	173	7,393	7,566	(720)	1982/2015	08/17/17	40
Signature Healthcare of Muncie	Muncie, IN	100%	0	374	27,429	27,803	0	374	27,429	27,803	(2,476)	1980/2013	08/17/17	40
Signature Healthcare at Parkwood	Lebanon, IN	100%	0	612	11,755	12,367	0	612	11,755	12,367	(1,124)	1977/2012	08/17/17	40
Signature Healthcare at Tower Road	Marietta, GA	100%	0	364	16,116	16,480	0	364	16,116	16,480	(1,580)	1969/2015	08/17/17	40
Danville Centre for Health and Rehabilitation	Danville, KY	100%	0	790	9,356	10,146	0	790	9,356	10,146	(1,075)	1962/2015	08/17/17	40
Signature Healthcare at Hillcrest	Owensboro, KY	100%	0	1,048	22,587	23,635	0	1,048	22,587	23,635	(2,118)	1963/2011	08/17/17	40
Signature Healthcare of Elizabethtown	Elizabethtown, KY	100%	0	239	4,853	5,092	0	239	4,853	5,092	(509)	1969	08/17/17	40
Signature Healthcare of Primacy	Memphis, TN	100%	0	1,633	9,371	11,004	0	1,633	9,371	11,004	(962)	1981/2015	08/17/17	40
Signature Healthcare of Harbour Pointe	Norfolk, VA	100%	0	705	16,451	17,156	0	705	16,451	17,156	(1,746)	1969/2015	08/17/17	40
Harrodsburg Health & Rehabilitation Center	Harrodsburg, KY	100%	0	1,049	9,851	10,900	0	1,049	9,851	10,900	(1,077)	1975/2016	08/17/17	40
Signature Healthcare of Putnam County	Cookeville, TN	100%	0	1,034	15,555	16,589	0	1,034	15,555	16,589	(1,493)	1979/2016	08/17/17	40

F-46

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Signature Healthcare of Fayette County	Washington Court House, OH	100%	0	405	4,839	5,244	0	405	4,839	5,244	(551)	1984/2015	08/17/17	40
Signature Healthcare of Galion	Galion, OH	100%	0	836	668	1,504	0	836	668	1,504	(124)	1967/1985	08/17/17	40
Signature Healthcare of Roanoke Rapids	Roanoke Rapids, NC	100%	0	373	10,308	10,681	0	373	10,308	10,681	(1,088)	1967/2015	08/17/17	40
Signature Healthcare of Kinston	Kinston, NC	100%	0	954	7,987	8,941	0	954	7,987	8,941	(945)	1960/2015	08/17/17	40
Signature Healthcare of Chapel Hill	Chapel Hill, NC	100%	0	809	2,703	3,512	302	809	3,005	3,814	(460)	1984/2015	08/17/17	40
Signature Healthcare of Chillicothe	Chillicothe, OH	100%	0	260	8,924	9,184	0	260	8,924	9,184	(972)	1974/2015	08/17/17	40
Signature Healthcare of Coshocton	Coshocton, OH	100%	0	374	2,530	2,904	0	374	2,530	2,904	(373)	1974/2015	08/17/17	40
McCreary Health & Rehabilitation Center	Pine Knot, KY	100%	0	208	7,665	7,873	0	208	7,665	7,873	(760)	1990	08/17/17	40
Colonial Health & Rehabilitation Center	Bardstown, KY	100%	0	634	4,094	4,728	0	634	4,094	4,728	(474)	1968/2010	08/17/17	40
Glasgow Health & Rehabilitation Center	Glasgow, KY	100%	0	83	2,057	2,140	0	83	2,057	2,140	(288)	1968	08/17/17	40
Green Valley Health & Rehabilitation Center	Carrollton, KY	100%	0	124	1,693	1,817	0	124	1,693	1,817	(249)	1978/2016	08/17/17	40
Hart County Health & Rehabilitation	Horse Cave, KY	100%	0	208	7,070	7,278	0	208	7,070	7,278	(765)	1993	08/17/17	40
Heritage Hall Health & Rehabilitation Center	Lawrenceburg, KY	100%	0	635	9,861	10,496	0	635	9,861	10,496	(992)	1973	08/17/17	40
Jackson Manor	Annville, KY	100%	0	479	6,078	6,557	0	479	6,078	6,557	(599)	1989	08/17/17	40
Jefferson Manor	Louisville, KY	100%	0	3,528	4,653	8,181	0	3,528	4,653	8,181	(574)	1982/2012	08/17/17	40
Jefferson Place	Louisville, KY	100%	0	2,207	20,733	22,940	0	2,207	20,733	22,940	(1,928)	1991/2010	08/17/17	40
Monroe Health & Rehabilitation Center	Tompkinsville, KY	100%	0	333	9,556	9,889	0	333	9,556	9,889	(950)	1969	08/17/17	40
North Hardin Health & Rehabilitation Center	Radcliff, KY	100%	0	1,815	7,470	9,285	0	1,815	7,470	9,285	(941)	1986	08/17/17	40
Professional Care Health & Rehabilitation Center	Hartford, KY	100%	0	312	8,189	8,501	0	312	8,189	8,501	(832)	1967	08/17/17	40
Rockford Health & Rehabilitation Center	Louisville, KY	100%	0	427	6,003	6,430	0	427	6,003	6,430	(650)	1975/2005	08/17/17	40
Summerfield Health & Rehabilitation Center	Louisville, KY	100%	0	1,134	9,166	10,300	0	1,134	9,166	10,300	(1,018)	1979/2013	08/17/17	40
Tanbark Senior Living	Lexington, KY	100%	0	2,558	4,311	6,869	0	2,558	4,311	6,869	(521)	1989	08/17/17	40
Summit Manor Health & Rehabilitation Center	Columbia, KY	100%	0	114	11,141	11,255	0	114	11,141	11,255	(1,084)	1965	08/17/17	40
Belle View Estates Rehabilitation and Care Center	Monticello, AR	100%	0	206	3,179	3,385	0	206	3,179	3,385	(371)	1995	08/17/17	40
River Chase Rehabilitation and Care Center	Morrilton, AR	100%	0	508	0	508	0	508	0	508	0	1988/2019	08/17/17	40

F-47

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Heartland Rehabilitation and Care Center	Benton, AR	100%	0	1,336	7,386	8,722	0	1,336	7,386	8,722	(786)	1992	08/17/17	40
River Ridge Rehabilitation and Care Center	Wynne, AR	100%	0	227	4,007	4,234	0	227	4,007	4,234	(431)	1990	08/17/17	40
Brookridge Cove Rehabilitation and Care Center	Morrilton, AR	100%	0	412	2,642	3,054	0	466	2,642	3,108	(349)	1996	08/17/17	40
Southern Trace Rehabilitation and Care Center	Bryant, AR	100%	0	819	8,938	9,757	0	819	8,938	9,757	(847)	1989/2015	08/17/17	40
Lake Village Rehabilitation and Care Center	Lake Village, AR	100%	0	507	4,838	5,345	0	507	4,838	5,345	(526)	1998	08/17/17	40
Savannah Specialty Care Center	Savannah, GA	100%	0	2,194	11,711	13,905	0	2,194	11,711	13,905	(1,095)	1972	08/17/17	40
Pettigrew Rehabilitation Center	Durham, NC	100%	0	470	9,633	10,103	0	470	9,633	10,103	(892)	1968/2006	08/17/17	40
Sunnybrook Rehabilitation Center	Raleigh, NC	100%	0	1,155	11,749	12,904	0	1,155	11,749	12,904	(1,114)	1971	08/17/17	40
Raleigh Rehabilitation Center	Raleigh, NC	100%	0	926	17,649	18,575	0	926	17,649	18,575	(1,645)	1967/2007	08/17/17	40
Cypress Pointe Rehabilitation Center	Wilmington, NC	100%	0	611	5,051	5,662	0	611	5,051	5,662	(534)	1966/2013	08/17/17	40
Silas Creek Rehabilitation Center	Winston-Salem, NC	100%	0	879	3,283	4,162	0	879	3,283	4,162	(396)	1965	08/17/17	40
Lincolnton Rehabilitation Center	Lincolnton, NC	100%	0	0	9,967	9,967	0	0	9,967	9,967	(949)	1976	08/17/17	40
Rehabilitation and Nursing Center of Monroe	Monroe, NC	100%	0	166	5,906	6,072	0	166	5,906	6,072	(626)	1963/2005	08/17/17	40
Guardian Care of Zebulon	Zebulon, NC	100%	0	594	8,559	9,153	0	594	8,559	9,153	(782)	1973/2010	08/17/17	40
Guardian Care of Rocky Mount	Rocky Mount, NC	100%	0	0	18,314	18,314	0	0	18,314	18,314	(1,644)	1975	08/17/17	40
San Pedro Manor	San Antonio, TX	100%	0	671	2,504	3,175	0	671	2,504	3,175	(302)	1986	08/17/17	40
Park Manor Health Care & Rehabilitation	DeSoto, TX	100%	0	942	6,033	6,975	0	942	6,033	6,975	(629)	1987	08/17/17	40
Avalon Place - Trinity	Trinity, TX	100%	0	363	3,852	4,215	0	363	3,852	4,215	(432)	1985/2019	08/17/17	40
Avalon Place - Kirbyville	Kirbyville, TX	100%	0	208	5,809	6,017	0	208	5,809	6,017	(624)	1987	08/17/17	40
Heritage House of Marshall	Marshall, TX	100%	0	732	4,288	5,020	0	732	4,288	5,020	(474)	2008	08/17/17	40
Autumn Woods Residential Health Care Facility	Warren, MI	100%	0	2,052	25,539	27,591	0	2,052	25,539	27,591	(2,636)	1961/2001	08/17/17	40
Autumn View Health Care Facility	Hamburg, NY	100%	0	1,026	54,086	55,112	0	1,026	54,086	55,112	(4,881)	1983/2014	08/17/17	40
Brookhaven Health Care Facility	East Patchogue, NY	100%	0	2,181	30,373	32,554	0	2,181	30,373	32,554	(2,883)	1988/2011	08/17/17	40
Harris Hill Nursing Facility	Williamsville, NY	100%	0	1,122	46,413	47,535	0	1,122	46,413	47,535	(4,112)	1992/2007	08/17/17	40
Garden Gate Health Care Facility	Cheektowaga, NY	100%	0	1,164	29,905	31,069	0	1,164	29,905	31,069	(2,808)	1979/2006	08/17/17	40

F-48

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Northgate Health Care Facility	North Tonawanda, NY	100%	0	830	29,488	30,318	0	830	29,488	30,318	(2,768)	1982/2007	08/17/17	40
Seneca Health Care Center	West Seneca, NY	100%	0	1,325	26,839	28,164	0	1,325	26,839	28,164	(2,473)	1974/2008	08/17/17	40
Blueberry Hill Rehab and Healthcare Center	Beverly, MA	100%	0	2,410	13,588	15,998	0	2,410	13,588	15,998	(1,684)	1965/2015	08/17/17	40
River Terrace Rehabilitation and Healthcare Center	Lancaster, MA	100%	0	343	7,733	8,076	0	343	7,733	8,076	(740)	1970/2005	08/17/17	40
The Crossings East Campus	New London, CT	100%	0	505	2,248	2,753	48	505	2,296	2,801	(369)	1967/2016	08/17/17	40
Parkway Pavilion Healthcare	Enfield, CT	100%	0	437	16,461	16,898	27	437	16,488	16,925	(1,611)	1968/2015	08/17/17	40
Quincy Health & Rehabilitation Center	Quincy, MA	100%	0	894	904	1,798	129	894	1,033	1,927	(166)	1965/2003	08/17/17	40
Den-Mar Health & Rehabilitation Center	Rockport, MA	100%	0	0	1,765	1,765	0	0	1,765	1,765	(221)	1963/1993	08/17/17	40
Firesteel Healthcare Community	Mitchell, SD	100%	0	621	14,059	14,680	8,716	621	22,775	23,396	(3,266)	1966/2017	08/17/17	40
Fountain Springs Healthcare Community	Rapid City, SD	100%	0	1,134	13,109	14,243	268	1,134	13,377	14,511	(1,260)	1989/2016, 2019	08/17/17	40
Palisade Healthcare Community	Garretson, SD	100%	0	362	2,548	2,910	297	362	2,845	3,207	(346)	1971/1982, 2019	08/17/17	40
Shepherd of the Valley Healthcare Community	Casper, WY	100%	0	803	19,210	20,013	1,148	803	20,358	21,161	(1,979)	1961/1990, 2019	08/17/17	40
Wheatcrest Hills Healthcare Community	Britton, SD	100%	0	679	3,216	3,895	331	679	3,547	4,226	(400)	1969/2019	08/17/17	40
Riverview Healthcare Community & Independent Living	Flandreau, SD	100%	0	240	6,327	6,567	0	240	6,327	6,567	(632)	1965/1989	08/17/17	40
Prairie View Healthcare Center	Woonsocket, SD	100%	0	383	2,041	2,424	0	383	2,041	2,424	(239)	1968/2012	08/17/17	40
Wingate at Dutchess (Fishkill)	Fishkill, NY	100%	0	964	30,107	31,071	338	964	30,435	31,399	(2,865)	1995	08/17/17	40
Wingate at Ulster (Highland)	Highland, NY	100%	0	4,371	11,473	15,844	136	4,371	11,609	15,980	(1,164)	1998	08/17/17	40
Wingate at Beacon	Beacon, NY	100%	0	0	25,400	25,400	42	0	25,442	25,442	(2,516)	2002	08/17/17	40
Wingate at Springfield	Springfield, MA	100%	0	817	11,357	12,174	0	817	11,357	12,174	(1,090)	1987	08/17/17	40
Wingate at Andover	Andover, MA	100%	0	2,123	5,383	7,506	0	2,123	5,383	7,506	(592)	1992	08/17/17	40
Wingate at Reading	Reading, MA	100%	0	1,534	5,221	6,755	159	1,534	5,380	6,914	(589)	1988	08/17/17	40
Wingate at Sudbury	Sudbury, MA	100%	0	2,017	3,458	5,475	0	2,017	3,458	5,475	(450)	1997	08/17/17	40
Wingate at Belvidere (Lowell)	Lowell, MA	100%	0	1,335	9,019	10,354	0	1,335	9,019	10,354	(935)	1966/2007	08/17/17	40
Wingate at Worcester	Worcester, MA	100%	0	945	8,770	9,715	50	945	8,820	9,765	(891)	1970/1988	08/17/17	40
Wingate at West Springfield	W. Springfield, MA	100%	0	2,022	7,345	9,367	0	2,022	7,345	9,367	(819)	1960/1985	08/17/17	40
Wingate at East Longmeadow	East Longmeadow, MA	100%	0	2,968	8,957	11,925	190	2,968	9,147	12,115	(1,016)	1985/2005	08/17/17	40
Broadway by the Sea	Long Beach, CA	100%	0	2,939	11,782	14,721	0	2,939	11,690	14,629	(1,168)	1968/2011	09/19/17	40

F-49

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Coventry Court Health Center	Anaheim, CA	100%	0	2,044	14,167	16,211	0	2,044	14,167	16,211	(1,375)	1968/2011	09/19/17	40
Fairfield Post-Acute Rehab	Fairfield, CA	100%	0	586	23,582	24,168	0	586	23,582	24,168	(2,129)	1966/2006	09/19/17	40
Garden View Post-Acute Rehab	Baldwin Park, CA	100%	0	2,270	17,063	19,333	0	2,270	17,063	19,333	(1,626)	1970/2015	09/19/17	40
Grand Terrace Health Care Center	Grand Terrace, CA	100%	0	432	9,382	9,814	0	432	9,382	9,814	(901)	1945/2017	09/19/17	40
Pacifica Nursing & Rehab Center	Pacifica, CA	100%	0	1,510	27,397	28,907	0	1,510	27,397	28,907	(2,440)	1975	09/19/17	40
Burien Nursing & Rehab Center	Burien, WA	100%	0	823	17,431	18,254	0	826	17,431	18,257	(1,635)	1965/2014	09/19/17	40
Park West Care Center	Seattle, WA	100%	0	4,802	7,927	12,729	0	4,802	7,927	12,729	(834)	1963/2016	09/19/17	40
Beachside Nursing Center	Huntington Beach, CA	100%	0	2,312	9,885	12,197	0	2,312	9,885	12,197	(945)	1965/2010	09/19/17	40
Chatsworth Park Health Care	Chatsworth, CA	100%	0	7,841	16,916	24,757	0	7,841	16,916	24,757	(1,684)	1976	09/19/17	40
Cottonwood Post-Acute Rehab	Woodland, CA	100%	0	504	7,369	7,873	0	504	7,369	7,873	(741)	1975/2010	09/19/17	40
Danville Post-Acute Rehab	Danville, CA	100%	0	1,491	17,157	18,648	0	1,491	17,157	18,648	(1,599)	1965	09/19/17	40
Lake Balboa Care Center	Van Nuys, CA	100%	0	2,456	16,462	18,918	0	2,456	16,462	18,918	(1,478)	1958/2015	09/19/17	40
Lomita Post-Acute Care Center	Lomita, CA	100%	0	2,743	14,734	17,477	0	2,743	14,734	17,477	(1,437)	1969	09/19/17	40
University Post-Acute Rehab	Sacramento, CA	100%	0	2,846	17,962	20,808	0	2,846	17,962	20,808	(1,653)	1972	09/19/17	40
Issaquah Nursing & Rehab Center	Issaquah, WA	100%	0	10,125	7,771	17,896	0	10,125	7,771	17,896	(859)	1975/2012	09/19/17	40
Alamitos-Belmont Rehab Hospital	Long Beach, CA	100%	0	3,157	22,067	25,224	0	3,157	22,067	25,224	(2,081)	1966/2014	09/19/17	40
Edgewater Skilled Nursing Center	Long Beach, CA	100%	0	2,857	5,878	8,735	0	2,857	5,878	8,735	(598)	1952/2013	09/19/17	40
Fairmont Rehabilitation Hospital	Lodi, CA	100%	0	812	21,059	21,871	0	812	21,059	21,871	(1,848)	1965	09/19/17	40
Palm Terrace Care Center	Riverside, CA	100%	0	1,717	13,806	15,523	0	1,717	13,806	15,523	(1,417)	1966	09/19/17	40
Woodland Nursing & Rehab	Woodland, CA	100%	0	278	16,729	17,007	0	278	16,729	17,007	(1,555)	1930/2007	09/19/17	40
Park Manor at Bee Cave	Bee Cave, TX	100%	0	2,107	10,413	12,520	0	2,107	10,413	12,520	(1,117)	2014	12/15/17	40
Ramona	El Monte, CA	100%	0	2,058	19,671	21,729	0	2,058	19,671	21,729	(1,700)	1965	01/10/18	40
Park Ridge	Shoreline, WA	100%	0	8,861	11,478	20,339	0	8,861	11,478	20,339	(1,170)	1964/2012	01/19/18	40
			26,476	376,386	3,218,616	3,595,002	63,018	376,164	3,268,306	3,644,470	(385,094)
Senior Housing - Leased
Forest Hills (ALF)	Broken Arrow, OK	100%	(4)	1,803	3,927	5,730	0	1,803	3,294	5,097	(1,655)	2000/2018	11/15/10	30
Langdon Place of Exeter	Exeter, NH	100%	2,547	571	7,183	7,754	0	571	5,940	6,511	(2,374)	1987	11/15/10	43
Langdon Place of Nashua	Nashua, NH	100%	4,887	0	5,654	5,654	0	0	4,605	4,605	(1,638)	1989	11/15/10	40
Langdon Place of Keene	Keene, NH	100%	3,912	304	3,992	4,296	0	304	3,437	3,741	(1,594)	1995	11/15/10	46

F-50

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Langdon Place of Dover	Dover, NH	100%	3,164	801	10,036	10,837	0	801	8,632	9,433	(3,384)	1987/2009, 2019	11/15/10	42
Age-Well Senior Living	Green Bay, WI	100%	0	256	2,262	2,518	1,032	256	3,294	3,550	(1,770)	2004/2011	11/22/11	40
Gulf Pointe Village	Rockport, TX	100%	0	789	607	1,396	0	789	607	1,396	(240)	1996/2018	11/30/12	40
Aspen Ridge Retirement Village	Gaylord, MI	100%	0	2,024	5,467	7,491	0	2,024	5,467	7,491	(1,569)	2002	12/14/12	40
Green Acres of Cadillac	Cadillac, MI	100%	0	217	3,000	3,217	0	217	3,000	3,217	(728)	2001/2006	12/14/12	40
Green Acres of Greenville	Greenville, MI	100%	0	684	5,832	6,516	249	684	6,081	6,765	(1,497)	1999/2001, 2012, 2013, 2018	12/14/12	40
Green Acres of Manistee	Manistee, MI	100%	0	952	2,578	3,530	2,547	952	5,125	6,077	(1,229)	2002/2017	12/14/12	40
Green Acres of Mason	Mason, MI	100%	0	198	4,131	4,329	0	198	4,131	4,329	(1,045)	2009/2012	12/14/12	40
Nottingham Place	Midland, MI	100%	0	744	1,745	2,489	400	744	2,145	2,889	(574)	1995/2015	12/14/12	40
Royal View	Mecosta, MI	100%	0	307	2,477	2,784	0	307	2,477	2,784	(686)	2001	12/14/12	40
Tawas Village	East Tawas, MI	100%	0	258	3,713	3,971	45	258	3,758	4,016	(1,227)	2005	12/14/12	40
Turning Brook	Alpena, MI	100%	0	546	13,139	13,685	0	546	13,139	13,685	(2,856)	2006/2008, 2010	12/14/12	40
Greenfield of Woodstock	Woodstock, VA	100%	0	597	5,465	6,062	0	597	5,465	6,062	(1,193)	1996/2015	06/28/13	40
Nye Square	Fremont, NE	100%	0	504	17,670	18,174	0	504	17,670	18,174	(3,501)	1989/2002	02/14/14	40
The Meadows	Norfolk, NE	100%	0	217	9,906	10,123	4,680	217	14,586	14,803	(2,362)	1989/1991, 1994, 2018, 2019	02/14/14	40
Park Place	Fort Wayne, IN	100%	12,899	2,300	21,115	23,415	2,747	2,300	23,861	26,161	(5,286)	2011/2016, 2018	04/30/14	40
Avalon MC - Boat Club	Fort Worth, TX	100%	0	359	8,126	8,485	0	359	8,126	8,485	(1,457)	1996/2015	09/29/14	40
Avalon MC - 7200	Arlington, TX	100%	0	123	4,914	5,037	0	123	4,914	5,037	(883)	1988/2014	09/29/14	40
Avalon MC - 7204	Arlington, TX	100%	0	215	4,821	5,036	0	215	4,822	5,037	(871)	1988/2014	09/29/14	40
Avalon MC - 7140	Arlington, TX	100%	0	143	6,653	6,796	0	143	6,653	6,796	(1,167)	2011	09/29/14	40
Delaney Creek Lodge	Brandon, FL	100%	0	1,283	8,424	9,707	483	1,283	8,907	10,190	(1,777)	1999/2016	10/01/14	40
Nature Coast Lodge	Lecanto, FL	100%	0	1,031	5,577	6,608	452	1,031	6,030	7,061	(1,395)	1997/2016	10/01/14	40
West Winds	Zephyrhills, FL	100%	0	1,688	9,098	10,786	360	1,688	9,459	11,147	(2,025)	2008/2016	10/01/14	40
Tudor Heights	Baltimore, MD	100%	0	561	4,865	5,426	1,315	344	2,906	3,250	0	1920/1997, 2010, 2015, 2019	10/14/14	40
Life’s Journey of Mattoon	Mattoon, IL	100%	0	812	6,796	7,608	63	111	720	831	(26)	2006/2008	09/01/15	40
Life’s Journey of Pana	Pana, IL	100%	0	154	2,098	2,252	0	23	227	250	(9)	1998/2012	09/01/15	40
Life’s Journey of Taylorville	Taylorville, IL	100%	0	267	5,201	5,468	50	106	1,794	1,900	(226)	2012/2014	09/01/15	40
Life’s Journey of Paris	Paris, IL	100%	0	132	3,090	3,222	0	49	996	1,045	(116)	1998/2013	09/01/15	40
Ashley Pointe	Lake Stevens, WA	100%	0	1,559	9,059	10,618	68	1,559	9,127	10,686	(1,475)	1998/2012	09/17/15	40
Farmington Square Eugene	Eugene, OR	100%	0	1,428	16,138	17,566	101	1,428	16,239	17,667	(2,323)	1996/1997, 2011, 2019	09/17/15	40
Farmington Square Tualatin	Tualatin, OR	100%	0	527	14,659	15,186	101	527	14,760	15,287	(2,120)	1995/1997, 2019	09/17/15	40

F-51

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Farmington Square of Salem	Salem, OR	100%	0	1,074	19,421	20,495	408	1,074	19,829	20,903	(2,950)	1989/1995, 2018	09/17/15	40
Colorado Springs	Colorado Springs, CO	100%	0	1,210	9,490	10,700	0	1,210	9,490	10,700	(1,463)	2013/2019	11/16/15	40
Sun City West	Sun City West, AZ	100%	0	930	9,170	10,100	248	930	9,418	10,348	(1,301)	2012	07/01/16	40
Poet’s Walk at Fredericksburg	Fredericksburg, VA	100%	0	1,379	21,209	22,588	0	1,379	21,209	22,588	(2,786)	2016	07/14/16	40
Poet’s Walk at Chandler Oaks	Round Rock, TX	100%	0	679	13,642	14,321	0	679	13,642	14,321	(1,807)	2016	08/01/16	40
The Montecito Santa Fe	Santa Fe, NM	100%	0	2,536	19,441	21,977	0	2,157	21,736	23,893	(2,643)	2006	09/23/16	40
Montecito - MC	Santa Fe, NM	100%	0	670	7,743	8,413	409	670	8,152	8,822	(38)	2020	09/23/16	40
The Golden Crest	Franklin, NH	100%	0	292	6,889	7,181	97	292	6,996	7,288	(976)	1988	11/30/16	40
Poet’s Walk at Henderson	Henderson, NV	100%	0	1,430	21,850	23,280	0	1,430	21,862	23,292	(2,543)	2016	12/01/16	40
Kruse Village	Brenham, TX	100%	0	476	11,912	12,388	0	476	11,922	12,398	(1,587)	1991	12/02/16	40
Poet’s Walk of Cedar Parks	Cedar Park, TX	100%	0	1,035	13,127	14,162	0	1,035	13,127	14,162	(1,386)	2017	06/01/17	40
Avamere Court at Keizer	Keizer, OR	100%	0	1,220	31,783	33,003	0	1,220	31,783	33,003	(2,861)	1970	08/17/17	40
Arbor Court Retirement Community at Alvamar	Lawrence, KS	100%	0	584	4,431	5,015	0	584	4,431	5,015	(447)	1995/2014	08/17/17	40
Arbor Court Retirement Community at Salina	Salina, KS	100%	0	584	3,020	3,604	0	584	3,020	3,604	(303)	1989/2014	08/17/17	40
Arbor Court Retirement Community at Topeka	Topeka, KS	100%	0	313	5,492	5,805	0	313	5,492	5,805	(509)	1986/2014	08/17/17	40
Aspen Grove Assisted Living	Sturgis, SD	100%	0	555	6,487	7,042	0	555	6,487	7,042	(663)	2013	08/17/17	40
Maurice Griffith Manor Living Center	Casper, WY	100%	0	294	72	366	0	294	72	366	(14)	1984/1985	08/17/17	40
The Peaks at Old Laramie Trail (Lafayette)	Lafayette, CO	100%	0	1,085	19,243	20,328	0	1,883	19,196	21,079	(1,758)	2016	12/15/17	40
Prairie View	Winnebago, IL	100%	0	263	3,743	4,006	0	263	3,743	4,006	(348)	2007	01/31/18	40
Arbor View Assisted Living	Pewaukee, WI	100%	0	1,019	3,606	4,625	0	1,019	3,606	4,625	(299)	2010	04/16/18	40
Legacy Assisted Living	Pewaukee, WI	100%	0	661	5,680	6,341	0	661	5,680	6,341	(434)	2015	04/16/18	40
Greenfield of Strasburg	Strasburg, VA	100%	0	666	5,551	6,217	0	666	5,551	6,217	(437)	2001	04/30/18	40
Poets Walk of Sarasota	Sarasota, FL	100%	0	1,440	22,541	23,981	0	1,440	22,541	23,981	(1,617)	2018	05/18/18	40
The Pointe at Lifespring	Knoxville, TN	100%	0	1,603	9,219	10,822	0	1,603	9,219	10,822	(722)	2017	08/31/18	40
Shavano Park Senior Living	Shavano Park, TX	100%	0	2,131	11,541	13,672	0	2,131	11,541	13,672	(827)	2015	08/31/18	40
Traditions of Beavercreek	Beavercreek, OH	100%	0	1,622	24,215	25,837	7,561	1,622	31,772	33,394	(2,120)	2016	11/01/18	40
Cadence at Poway Gardens	Poway, CA	100%	0	3,693	14,467	18,160	0	3,693	14,467	18,160	(459)	1987/2011	11/22/19	40
Traditions of Brookside (McCordsville)	McCordsville, IN	100%	0	1,587	31,315	32,902	0	1,587	31,315	32,902	(872)	2017	01/07/20	40
Traditions of Beaumont	Louisville, KY	100%	0	1,841	21,827	23,668	0	1,841	21,827	23,668	(552)	2015	01/31/20	40

F-52

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Traditions at Hunter Station (Clarksville)	Sellersburg, IN	100%	0	1,060	28,702	29,762	0	1,060	28,702	29,762	(600)	2015	04/01/20	40
			27,409	58,286	646,247	704,533	23,416	57,412	650,222	707,634	(87,600)
Senior Housing - Managed
Winter Village	Frankenmuth, MI	100%	0	5,027	20,929	25,956	1,201	5,027	22,130	27,157	(5,304)	1982/2008	09/21/12	40
Stoney River Marshfield	Marshfield, WI	100%	0	574	8,733	9,307	180	574	8,913	9,487	(2,071)	2010	12/18/12	40
Kensington Court	Windsor, ON	100%	0	1,360	16,855	18,215	1,056	1,435	18,835	20,270	(3,142)	1998	06/11/15	40
Masonville Manor	London, ON	100%	0	960	19,056	20,016	458	1,013	20,559	21,572	(3,347)	1998/2015, 2019	06/11/15	40
Okanagan Chateau	Kelowna, BC	100%	0	2,321	8,308	10,629	1,415	2,448	10,179	12,627	(1,864)	1990/2019, 2020	06/11/15	40
Court at Laurelwood	Waterloo, ON	100%	0	1,823	22,135	23,958	395	1,921	23,745	25,666	(3,817)	2005/2015	06/11/15	40
Fairwinds Lodge	Sarnia, ON	100%	0	1,187	20,346	21,533	626	1,251	22,089	23,340	(3,568)	2000/2019	06/11/15	40
The Shores	Kamloops, BC	100%	4,891	679	8,024	8,703	310	715	8,775	9,490	(1,458)	1992/2014	06/11/15	40
Orchard Valley	Vernon, BC	100%	6,511	843	10,724	11,567	457	284	11,770	12,054	(1,840)	1990/2008	06/11/15	40
Cherry Park	Penticton, BC	100%	4,688	763	6,771	7,534	775	804	7,919	8,723	(1,320)	1990/1991, 2014, 2019	06/11/15	40
Maison Senior Living	Calgary, AB	100%	0	3,908	20,996	24,904	671	4,121	22,818	26,939	(3,386)	2013	09/17/15	40
Ramsey	Ramsey, MN	100%	0	1,182	13,280	14,462	73	1,182	13,353	14,535	(1,318)	2015	10/06/17	40
Marshfield II	Marshfield, WI	100%	0	500	4,134	4,634	23	500	4,157	4,657	(462)	2014	10/06/17	40
Dover Place	Dover, DE	100%	0	2,797	23,054	25,851	169	2,797	23,223	26,020	(2,088)	1999	01/02/18	40
Kanawha Place	Charleston, WV	100%	0	419	4,239	4,658	409	419	4,648	5,067	(578)	1969	01/02/18	40
Leighton Place	Williamsport, PA	100%	0	296	9,191	9,487	240	296	9,431	9,727	(907)	1990/2009	01/02/18	40
Maidencreek Place	Reading, PA	100%	0	684	12,950	13,634	93	684	13,043	13,727	(1,202)	2004	01/02/18	40
Rolling Meadows Place	Scott Depot, WV	100%	0	230	6,271	6,501	312	230	6,575	6,805	(742)	1996	01/02/18	40
Willowbrook Place	Clarks Summit, PA	100%	0	406	9,471	9,877	712	406	10,183	10,589	(1,051)	1997	01/02/18	40
Wyncote Place	Wyncote, PA	100%	0	1,781	4,911	6,692	366	1,781	5,277	7,058	(660)	1909	01/02/18	40
Amity Place	Douglassville, PA	100%	0	611	19,083	19,694	146	611	19,229	19,840	(1,679)	2008	01/02/18	40
Milford Place	Milford, DE	100%	0	1,199	18,786	19,985	237	1,199	19,023	20,222	(1,716)	1999	01/02/18	40
Oak Hill Place	Oak Hill, WV	100%	0	609	2,636	3,245	189	609	2,825	3,434	(396)	2001/2014	01/02/18	40
Seasons Place	Lewisburg, WV	100%	0	355	5,055	5,410	450	355	5,505	5,860	(693)	1995	01/02/18	40
Parkview in Allen	Allen, TX	100%	0	2,190	45,767	47,957	0	2,190	46,637	48,827	(8,357)	2004/2010	09/25/14	40
The Atrium At Gainesville	Gainesville, FL	100%	0	2,139	44,789	46,928	0	2,139	46,608	48,747	(8,771)	1986/2013, 2015, 2019	09/25/14	40
The Chateau	McKinney, TX	100%	0	2,760	44,397	47,157	0	2,760	45,571	48,331	(8,297)	2006/2010, 2019	09/25/14	40
Gardens At Wakefield Plantation	Raleigh, NC	100%	0	2,344	37,506	39,850	0	2,344	38,275	40,619	(6,757)	2002/2014	09/25/14	40
Las Brisas	San Luis Obispo, CA	100%	0	4,992	30,909	35,901	0	4,992	31,487	36,479	(5,741)	1987/2006, 2015	09/25/14	40
Creekside Terrace	Winston-Salem, NC	100%	0	2,995	24,428	27,423	0	2,995	24,782	27,777	(4,614)	2001	09/25/14	40
Colonial Village	Longview, TX	100%	0	805	26,498	27,303	0	805	27,568	28,373	(5,097)	1985/2010	09/25/14	40
Garden Village	Kansas City, MO	100%	0	1,325	20,510	21,835	0	1,325	21,466	22,791	(4,231)	1983	09/25/14	40

F-53

				Initial Cost to Company			Cost Capitalized Subsequent to Acquisition	Gross Amount at which Carried at Close of Period						Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)	Land	Building and Improve- ments(2)(3)	Total		Land	Building and Improve- ments(2)(3)	Total	Accumulated Depreciation and Amortization	Original Date of Construction/ Renovation	Date Acquired
Desert Rose	Yuma, AZ	100%	0	530	21,775	22,305	0	530	22,124	22,654	(4,107)	1996/2014	09/25/14	40
Windland South	Nashville, TN	100%	0	1,996	19,368	21,364	0	1,996	20,507	22,503	(4,159)	1986/2000	09/25/14	40
Cedar Woods	Branford, CT	100%	0	2,403	18,821	21,224	0	2,403	19,436	21,839	(3,619)	1987	09/25/14	40
Virginian	Richmond, VA	100%	0	1,080	19,545	20,625	0	1,080	20,231	21,311	(3,860)	1989/2007	09/25/14	40
Monarch Estates	Auburn, AL	100%	0	3,209	17,326	20,535	0	3,209	17,768	20,977	(3,419)	2001	09/25/14	40
Village At The Falls	Menomonee Falls, WI	100%	0	1,477	18,778	20,255	0	1,477	19,160	20,637	(3,656)	2005/2006, 2007/2011, 2019	09/25/14	40
Holiday At The Atrium	Glenville, NY	100%	0	978	18,257	19,235	0	978	19,036	20,014	(3,565)	2001/2014	09/25/14	40
Lake Ridge Village	Eustis, FL	100%	0	1,152	17,523	18,675	0	1,152	18,904	20,056	(3,620)	1984/1988, 2013	09/25/14	40
Heritage Village	McAllen, TX	100%	0	4,092	13,823	17,915	0	4,092	14,468	18,560	(2,867)	1988	09/25/14	40
Madison Meadows	Phoenix, AZ	100%	0	2,567	12,029	14,596	0	2,567	12,998	15,565	(2,692)	1986	09/25/14	40
South Wind Heights	Jonesboro, AR	100%	0	1,782	11,244	13,026	0	1,782	11,789	13,571	(2,394)	1999	09/25/14	40
Harrison Regent	Ogden, UT	100%	0	794	10,873	11,667	0	794	11,728	12,522	(2,326)	1985/2016	09/25/14	40
Capital Place	Olympia, WA	100%	0	2,477	23,767	26,244	0	2,477	25,275	27,752	(4,676)	1986/2016	10/07/14	40
The Monarch at Richardson	Richardson, TX	100%	0	2,282	10,556	12,838	925	2,282	11,472	13,754	(415)	1999/2020	11/01/19	40
Elan Westpointe	New Braunfels, TX	100%	0	1,312	23,108	24,420	51	1,312	23,159	24,471	(689)	2015	01/15/20	40
			16,090	78,195	827,535	905,730	11,939	78,343	864,653	942,996	(142,538)
Specialty Hospitals and Other
Texas Regional Medical Center	Sunnyvale, TX	100%	0	4,020	57,620	61,640	0	4,020	57,620	61,640	(17,774)	2009	05/03/11	40
Landmark Aurora	Aurora, CO	100%	0	2,874	12,829	15,703	483	2,874	13,312	16,186	(2,870)	2009/2018	09/20/12	40
Baylor Orthopedic Spine Hospital at Arlington	Arlington, TX	100%	0	0	44,217	44,217	0	0	44,217	44,217	(3,787)	2009/2016	08/17/17	40
Touchstone Neurorecovery Center	Conroe, TX	100%	0	2,935	25,003	27,938	0	2,935	25,003	27,938	(2,421)	1992	08/17/17	40
HealthBridge Children’s Hospital (Houston)	Houston, TX	100%	0	3,001	14,581	17,582	0	3,001	14,581	17,582	(1,272)	1999/2009	08/17/17	40
Nexus Specialty Hospital - Woodlands Campus	Spring, TX	100%	0	1,319	15,153	16,472	0	1,319	15,153	16,472	(1,324)	1995/1998	08/17/17	40
HealthBridge Children’s Hospital (Orange)	Orange, CA	100%	0	2,060	5,538	7,598	0	2,060	5,538	7,598	(504)	2000	08/17/17	40
ResCare Tangram - Texas Hill Country School	Maxwell, TX	100%	0	902	2,384	3,286	1	902	2,385	3,287	(241)	1993	08/17/17	40
ResCare Tangram - Chaparral	Maxwell, TX	100%	0	901	1,198	2,099	0	901	1,198	2,099	(146)	1994/2009	08/17/17	40
ResCare Tangram - Sierra Verde & Roca Vista	Maxwell, TX	100%	0	456	2,632	3,088	0	456	2,632	3,088	(251)	1992	08/17/17	40
ResCare Tangram - 618 W. Hutchinson	San Marcos, TX	100%	0	51	359	410	62	51	359	410	(35)	1869	08/17/17	40
ResCare Tangram - Ranch	Seguin, TX	100%	0	539	2,627	3,166	0	539	2,627	3,166	(319)	1989	08/17/17	40
ResCare Tangram - Mesquite	Seguin, TX	100%	0	228	3,407	3,635	79	228	3,486	3,714	(352)	1985/1991	08/17/17	40

F-54

					Initial Cost to Company						Cost Capitalized Subsequent to Acquisition		Gross Amount at which Carried at Close of Period										Life on Which Depreciation in Latest Income Statement is Computed
Description	Location	Ownership Percentage	Encum- brances(1)		Land		Building and Improve- ments(2)(3)		Total				Land		Building and Improve- ments(2)(3)		Total		Accumulated Depreciation and Amortization		Original Date of Construction/ Renovation	Date Acquired
ResCare Tangram - Hacienda	Kingsbury, TX	100%	0		104		2,788		2,892		27		104		2,815		2,919		(260)		1990/2012	08/17/17	40
ResCare Tangram - Loma Linda	Seguin, TX	100%	0		52		805		857		0		52		805		857		(81)		1970	08/17/17	40
Aurora Chicago Lakeshore Hospital	Chicago, IL	100%	0		8,574		39,732		48,306		0		8,574		39,732		48,306		(3,680)		1992/2011	08/17/17	40
Aurora Arizona West	Glendale, AZ	100%	0		1,501		67,046		68,547		0		1,501		67,046		68,547		(5,863)		1996/2013	08/17/17	40
Aurora Arizona East	Tempe, AZ	100%	0		3,137		50,073		53,210		0		3,137		50,073		53,210		(4,476)		2001/2016	08/17/17	40
Aurora Charter Oak Hospital	Covina, CA	100%	0		23,472		71,542		95,014		0		23,472		71,542		95,014		(6,499)		1974/2011	08/17/17	40
Aurora Vista del Mar Hospital	Ventura, CA	100%	0		8,089		43,645		51,734		—		8,089		43,645		51,734		(4,310)		1984/2018	08/17/17	40
Aurora San Diego Hospital	San Diego, CA	100%	0		8,403		55,015		63,418		7,599		8,403		62,614		71,017		(5,853)		1988/2017	08/17/17	40
Gateway Rehabilitation Hospital at Florence	Florence, KY	100%	0		3,866		26,447		30,313		0		3,866		26,447		30,313		(2,308)		2000	08/17/17	40
Highlands Regional Rehabilitation Hospital	El Paso, TX	100%	0		2,009		6,639		8,648		0		2,009		6,639		8,648		(646)		1999/2009	08/17/17	40
Landmark New London	New London, CT	100%	0		356		152		508		98		356		250		606		(32)		1967/2016	08/17/17	40
Landmark Carmel	Carmel, IN	100%	0		963		4,347		5,310		0		963		4,347		5,310		(218)		1996/2019	07/24/19	40
Landmark Louisville	Louisville, KY	100%	0		1,078		8,305		9,383		0		1,078		8,305		9,383		(355)		2002/2018	08/21/19	40
Recovery Centers of America at Monroeville	Monroeville, PA	100%	0		2,034		1,758		3,792		13,740		2,034		15,498		17,532		(144)		1987/2020	12/18/19	40
			0		82,924		565,842		648,766		22,089		82,924		587,869		670,793		(66,021)
Multi-property Indebtedness			10,224		0		0		0		0		0		0		0		0
			80,199		595,791		5,258,240		5,854,031		120,462		594,843		5,371,050		5,965,893		(681,253)
Corporate Assets			0		0		136		136		666		0		802		802		(404)
			$	80,199	$	595,791	$	5,258,376	$	5,854,167	$	121,128	$	594,843	$	5,371,852	$	5,966,695	$	(681,657)

(1)    Encumbrances do not include deferred financing costs, net of $1.1 million as of December 31, 2020.

(2)    Building and building improvements include land improvements and furniture and equipment.

(3)    The aggregate cost of real estate for federal income tax purposes was $5.0 billion.

(4)    Property serves as collateral for secured debt totaling $10.2 million as of December 31, 2020.

F-55

SCHEDULE III

REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

(dollars in thousands)

	Year Ended December 31,
	2020		2019		2018
Real estate:
Balance at the beginning of the year	$	5,880,583	$	6,255,883	$	6,334,855
Acquisitions	110,752		49,483		262,605
Real estate assumed	0		12,962		0
Improvements	47,354		25,451		27,697
Impairment	(6,776)		(143,655)		(1,576)
Sale of real estate	(63,050)		(322,910)		(351,922)
Foreign currency translation	3,448		6,918		(12,639)
Write-off of fully depreciated assets	(5,616)		(3,549)		(3,137)
Balance at the end of the year	$	5,966,695	$	5,880,583	$	6,255,883
Accumulated depreciation:
Balance at the beginning of the year	$	(539,213)	$	(402,338)	$	(340,423)
Depreciation expense	(166,086)		(163,863)		(174,398)
Impairment	2,773		22,070		163
Sale of real estate	15,886		2,092		108,122
Foreign currency translation	(633)		(723)		1,061
Write-off of fully depreciated assets	5,616		3,549		3,137
Balance at the end of the year	$	(681,657)	$	(539,213)	$	(402,338)

F-56

SCHEDULE IV

MORTGAGE LOANS ON REAL ESTATE

As of December 31, 2020

(dollars in thousands)

Description	Contractual Interest Rate		Maturity Date	Periodic Payment Terms	Prior Liens		Principal Balance		Book Value (1)		Principal Amount of Loans Subject to Delinquent Principal or Interest
Mortgages:
River Vista	10.0	%	2027	(2)	$	0	$	19,000	$	19,000	N/A
Construction Mortgages:
Arlington	8.0		2022	(3)	0		3,343		3,352		N/A
					$	0	$	22,343	$	22,352

(1)    The aggregate cost for federal income tax purposes was $22.5 million as of December 31, 2020.

(2)    Interest is due monthly, and principal is due at the maturity date.

(3)    Interest and principal for the first 36 months is deferred and due at the maturity date. Interest after the first 36 months is due monthly.

Changes in mortgage loans are summarized as follows:

	Year Ended December 31,
	2020		2019		2018
Balance at the beginning of the year	$	21,468	$	23,146	$	16,033
Additions during period:
Draws	706		1,689		10,943
Interest income added to principal	169		194		1,528
Deductions during period:
Paydowns/repayments	0		(3,561)		(5,358)
Balance at the end of the year	$	22,343	$	21,468	$	23,146

F-57

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Irvine, State of California, on August 6, 2021.

SABRA HEALTH CARE REIT, INC.
By:	/S/    RICHARD K. MATROS
	Richard K. Matros Chairman, President and Chief Executive Officer