Sabra Health Care REIT Inc

Previous wording

Our operations have been and are expected to continue to be impacted by economic and market conditions. Increases in interest rates, labor shortages, supply chain disruptions, high inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.

Current wording

Our operations have been and are expected to continue to be impacted by economic and market conditions. Increases in interest rates, labor shortages, inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.

Previous wording

Our consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conjunction with the rules and regulations of the SEC. The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results is included in Part II, Item 7 of our 2023 Annual Report on Form 10-K filed with the SEC. There have been no significant changes to our critical accounting policies during the three months ended March 31, 2024.

Current wording

Our consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results is included in Part II, Item 7 of our 2023 Annual Report on Form 10-K filed with the SEC. There have been no significant changes to our critical accounting policies during the six months ended June 30, 2024.

Previous wording

As of March 31, 2024, our investment portfolio consisted of 374 real estate properties held for investment, four assets held for sale, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. As of March 31, 2023, our investment portfolio consisted of 396 real estate properties held for investment, 13 investments in loans receivable, six preferred equity investments and three investments in unconsolidated joint ventures. In general, we expect that income and expenses related to our portfolio will fluctuate in future periods in comparison to the corresponding prior periods as a result of investment and disposition activity and anticipated future changes in our portfolio. The results of operations presented are not directly comparable due to ongoing acquisition and disposition activity, including our capital recycling initiative.

Current wording

As of June 30, 2024, our investment portfolio consisted of 374 real estate properties held for investment, one asset held for sale, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. As of June 30, 2023, our investment portfolio consisted of 392 real estate properties held for investment, 13 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. In general, we expect that income and expenses related to our portfolio will fluctuate in future periods in comparison to the corresponding prior periods as a result of investment and disposition activity and anticipated future changes in our portfolio.

Previous wording

During the three months ended March 31, 2024, we recognized $66.0 million of resident fees and services compared to $56.7 million for the three months ended March 31, 2023. The $9.3 million net increase is due to (i) a $5.1 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023, (ii) a $3.1 million increase related to increased occupancy and an increase in rates and (iii) a $1.3 million increase from one Senior

Current wording

During the three months ended June 30, 2024, we recognized $67.9 million of resident fees and services compared to $58.4 million for the three months ended June 30, 2023. The $9.5 million net increase is due to a $5.7 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after April 1, 2023 and the remaining increase is primarily related to increased occupancy and an increase in rates.

Previous wording

Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments. During the three months ended March 31, 2024, we recognized $8.9 million of interest and other income compared to $8.7 million for the three months ended March 31, 2023. The net increase of $0.2 million is due to (i) a $0.4 million increase due to increased fundings for existing investments, (ii) a $0.2 million increase from investments made after January 1, 2023 and (iii) a $0.2 million increase in bank interest income, partially offset by a $0.6 million decrease in income from investments repaid after January 1, 2023.

Current wording

Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments. During the three months ended June 30, 2024, we recognized $9.1 million of interest and other income compared to $8.5 million for the three months ended June 30, 2023. The net increase of $0.6 million is due to (i) a $0.3 million increase from investments made after April 1, 2023, (ii) a $0.2 million increase due to increased fundings for existing investments and (iii) a $0.1 million increase in bank interest income, partially offset by a $0.1 million decrease in income from investments repaid after April 1, 2023.

Previous wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the three months ended March 31, 2024, we incurred $28.4 million of interest expense compared to $28.5 million for the three months ended March 31, 2023. The $0.1 million net decrease is primarily related to borrowings outstanding under the Credit Agreement (as defined below).

Current wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the three months ended June 30, 2024, we incurred $29.3 million of interest expense compared to $28.3 million for the three months ended June 30, 2023. The $1.0 million net increase is primarily related to an increase in borrowings under the Credit Agreement (as defined below).

Previous wording

During the three months ended March 31, 2024, we recognized $4.3 million of triple-net portfolio operating expenses compared to $4.2 million during the three months ended March 31, 2023. The $0.2 million net increase is primarily due to adjusting our estimates related to property taxes.

Current wording

During the three months ended June 30, 2024, we recognized $4.4 million of triple-net portfolio operating expenses compared to $4.8 million during the three months ended June 30, 2023. The $0.4 million net decrease is primarily due to a $0.6 million decrease due to facilities that have since transitioned to new operators who are now paying the property taxes directly, offset by an increase due to adjusting our estimates related to property taxes.

Previous wording

During the three months ended March 31, 2024 and 2023, we recognized a $0.1 million and a $0.2 million recovery of loan losses, respectively, associated with our loans receivable investments.

Current wording

During the three months ended June 30, 2024 and 2023, we recognized a $0.2 million recovery of and a $0.4 million provision for loan losses, respectively, associated with our loans receivable investments.

Previous wording

See Note 5, “Assets Held for Sale, Impairment of Real Estate and Dispositions,” in the Notes to Consolidated Financial Statements for additional information regarding these impairments.

Current wording

During the three months ended June 30, 2024, we recognized a$15.3 million impairment of real estate primarily related to three facilities that are expected to be sold, one of which sold subsequent to June 30, 2024. No impairment of real estate was recognized during the three months ended June 30, 2023. See Note 5, “Asset Held for Sale, Impairment of Real Estate and Dispositions,” in the Notes to Consolidated Financial Statements for additional information regarding these impairments.

Previous wording

Net Loss on Sales of Real Estate

Current wording

Net Gain (Loss) on Sales of Real Estate

Previous wording

During the three months ended March 31, 2024, we recognized $91.8 million of rental income compared to $95.9 million for the three months ended March 31, 2023. The $4.1 million net decrease in rental income is related to(i) a $3.1 million decrease from properties disposed of after January 1, 2023,(ii) a $2.4 million increase of non-cash rent and lease inducement write-offs related to leases that are no longer accounted for on an accrual basis and (iii) a $1.1 million decrease in Genesis excess rents in accordance with the terms of the memorandum of understanding entered into with Genesis in 2017. The decreases are partially offset by (i) a $1.1 million increase from properties acquired after January 1, 2023 and (ii) a $1.2 million increase due to incremental revenue related to capital expenditures.

Current wording

During the six months ended June 30, 2024, we recognized $190.9 million of rental income compared to $190.1 million for the six months ended June 30, 2023. The $0.7 million net increase in rental income is related to(i) a $3.0 million increase from properties acquired after January 1, 2023, (ii) a $3.0 million net increase in rental and related revenues related to leases that are no longer accounted for on an accrual basis,(iii) a $1.9 million increase due to incremental revenue related to capital expenditures and (iv) a $1.0 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index. These increases are partially offset by(i) a $5.3 million decrease from properties disposed of after January 1, 2023,(ii) a $1.1 million decrease in Genesis excess rents in accordance with the terms of the memorandum of understanding entered into with Genesis in 2017, (iii) a $1.1 million decrease from facilities transitioned from triple-net lease to Senior Housing - Managed communities and (iv) a $0.6 million decrease from properties that were transitioned to new operators.

Previous wording

Housing - Managed community acquired after January 1, 2023. These increases are partially offset by a $0.4 million decrease related to one Senior Housing - Managed community disposed of after January 1, 2023.

Current wording

During the six months ended June 30, 2024, we recognized $134.0 million of resident fees and services compared to $115.1 million for the six months ended June 30, 2023. The $18.8 million net increase is due to (i) a $10.8 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023, (ii) a $6.7 million increase related to increased occupancy and an increase in rates and (iii) a $1.8 million increase from one Senior Housing - Managed community acquired after January 1, 2023. These increases are partially offset by a $0.4 million decrease related to one Senior Housing - Managed community disposed of after January 1, 2023.

Previous wording

During the three months ended March 31, 2024, we incurred $42.9 million of depreciation and amortization expense compared to $52.8 million for the three months ended March 31, 2023. The net decrease of $9.9 million is due to (i) an $8.2 million decrease due to accelerating the remaining useful life of a facility that was demolished in 2023, (ii) a $2.2 million decrease from properties disposed of after January 1, 2023 and (iii) a $0.7 million decrease due to assets that have been fully depreciated. These decreases are partially offset by a $1.1 million increase from additions to real estate and a $0.3 million increase from properties acquired after January 1, 2023.

Current wording

During the six months ended June 30, 2024, we incurred $84.6 million of depreciation and amortization expense compared to $97.0 million for the six months ended June 30, 2023. The net decrease of $12.4 million is due to (i) an $8.1 million decrease due to accelerating the remaining useful life of a facility that was demolished in 2023, (ii) a $3.9 million decrease from properties disposed of after January 1, 2023 and (iii) a $3.0 million decrease due to assets that have been fully depreciated. These decreases are partially offset by a $1.9 million increase from additions to real estate and a $0.8 million increase from properties acquired after January 1, 2023.

Previous wording

During the three months ended March 31, 2024, we recognized $49.7 million of Senior Housing - Managed portfolio operating expenses compared to $43.6 million for the three months ended March 31, 2023. The $6.0 million net increase is due to (i) a $4.5 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023, (ii) a $0.6 million increase related to one Senior Housing - Managed community acquired after January 1, 2023, (iii) a $0.5 million increase in management fees and dining expenses due to increased occupancy and (iv) a $0.3 million increase in employee compensation primarily due to increased labor rates and staffing. The increases are partially offset by a $0.4 million decrease related to one Senior Housing - Managed community disposed of after January 1, 2023.

Current wording

During the six months ended June 30, 2024, we recognized $100.0 million of Senior Housing - Managed portfolio operating expenses compared to $87.6 million for the six months ended June 30, 2023. The $12.4 million net increase is due to (i) a $9.6 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023, (ii) a $0.8 million increase related to one Senior Housing - Managed community acquired after January 1, 2023, (iii) a $0.9 million increase in management fees, dining expenses and housekeeping due to increased occupancy, (iv) a $0.8 million increase in employee compensation primarily due to increased labor rates and staffing and (v) a $0.5 million increase in administrative and corporate overhead expenses. These increases are partially offset by a $0.4 million decrease related to one Senior Housing - Managed community disposedof after January 1, 2023.

Previous wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and merger and acquisition costs. During the three months ended March 31, 2024, general and administrative expenses were $11.9 million compared to $10.5 million during the three months ended March 31, 2023. The $1.4 million net increase is related to (i) a $0.9 million increase in compensation, including a $0.3 million increase in stock-based compensation, for our teammates as a result of annual salary adjustments and (ii) a $0.2 million increase in office expense primarily related to the new corporate office lease.

Current wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and merger and acquisition costs. During the six months ended June 30, 2024, general and administrative expenses were $24.6 million compared to $20.0 million during the six months ended June 30, 2023. The $4.6 million net increase is related to (i) a $4.3 million increase in compensation, including a $0.6 million increase in stock-based compensation, for our teammatesas a result of changes in performance-based payout assumptions on compensation andannual salary adjustments and (ii) a $0.2 million increase in office expense primarily related to the new corporate office lease.

Previous wording

During the three months ended March 31, 2024, we recognized$3.1 million impairment of real estate related to three skilled nursing/transitional care facilities that are held for sale as of March 31, 2024. During the three months ended March 31, 2023, we recognized $7.1 million impairment of real estate related to one skilled nursing/transitional care facility that has sold.

Current wording

During the six months ended June 30, 2024, we recognized an $18.5 million impairment of real estate primarily related to six facilities that were sold or are expected to be sold. During the six months ended June 30, 2023, we recognized a $7.1 million impairment of real estate related to one skilled nursing/transitional care facility that was sold.

Previous wording

No loss on extinguishment of debt was recognized during the three months ended March 31, 2024. During the three months ended March 31, 2023, we recognized$1.5 million of loss on extinguishment of debt related to write-offs of deferred financing costs in connection with amending and restating the fifth amended and restated unsecured credit agreement entered into by the Operating Partnership and Sabra Canadian Holdings, LLC and the other parties thereto on September 9, 2019.

Current wording

No loss on extinguishment of debt was recognized during the six months ended June 30, 2024. During the six months ended June 30, 2023, we recognized a $1.5 million loss on extinguishment of debt related to write-offs of deferred financing costs in connection with amending and restating the fifth amended and restated unsecured credit agreement entered into by the Operating Partnership and Sabra Canadian Holdings, LLC and the other parties thereto on September 9, 2019.

Previous wording

During the three months ended March 31, 2024, we recognized $0.8 million of other income primarily related to business interruption insurance income related to one Senior Housing - Managed community that was closed due to a fire. During the three months ended March 31, 2023, we recognized $0.3 million of other income primarily due to the sale of licensed beds.

Current wording

During the six months ended June 30, 2024, we recognized $0.8 million of other income primarily related to business interruption insurance income related to one Senior Housing - Managed community that was closed due to a fire. During the six months ended June 30, 2023, we recognized $0.3 million of other income primarily related to the sale of licensed beds.

Previous wording

No gain or loss on sales of real estate was recognized during the three months ended March 31, 2024. During the three months ended March 31, 2023, we recognized an aggregate net loss of $21.5 million related to the disposition of six skilled nursing/transitional care facilities, one Senior Housing - Leased community and one Senior Housing - Managed community.

Current wording

During the six months ended June 30, 2024, we recognized an aggregate net gain of $1.8 million related to the disposition of four skilled nursing/transitional care facilities. During the six months ended June 30, 2023, we recognized an aggregate net loss of $29.3 million related to the disposition of 10 skilled nursing/transitional care facilities, one Senior Housing - Leased community and one Senior Housing - Managed community.

Previous wording

During the three months ended March 31, 2024, we recognized $0.6 million of loss from our unconsolidated joint ventures compared to $0.8 million of loss for the three months ended March 31, 2023. The $0.2 million net decrease in loss is primarily related to a $0.6 million increase in revenues net of operating expenses primarily due to increased occupancy, including $0.2 million related to one senior housing community acquired by one of our joint ventures after January 1, 2023. The decrease in loss is partially offset by an increase of $0.2 million of depreciation expense and $0.2 million of interest expense, both primarily related to the senior housing community acquired after January 1, 2023.

Current wording

During the six months ended June 30, 2024, we recognized $0.5 million of loss from our unconsolidated joint ventures compared to $1.5 million of loss for the six months ended June 30, 2023. The $1.0 million net improvement is primarily related to a $1.2 million increase in revenues net of operating expenses primarily due to increased occupancy, which includes $0.1 million related to one senior housing community acquired by one of our joint ventures after January 1, 2023.

Previous wording

During the three months ended March 31, 2024, we recognized $0.5 million of income tax expense compared to $0.7 million during the three months ended March 31, 2023. The $0.3 million decrease is due to lower taxable income.

Current wording

During the six months ended June 30, 2024, we recognized $0.9 million of income tax expense compared to $1.1 million for the six months ended June 30, 2023. The $0.2 million decrease is due to lower taxable income during the six months ended June 30, 2024.

Previous wording

The following table reconciles our calculations of FFO and AFFO for the three months ended March 31, 2024 and 2023, to net income, the most directly comparable GAAP financial measure, for the same periods (in thousands, except share and per share amounts):

Current wording

The following table reconciles our calculations of FFO and AFFO for the three and six months ended June 30, 2024 and 2023, to net income, the most directly comparable GAAP financial measure, for the same periods (in thousands, except share and per share amounts):

Previous wording

The following table sets forth additional information related to certain other items included in net income (loss) above, and the portions of each that are included in FFO and AFFO, which may be helpful in assessing our operating results. Please refer to “—Results of Operations” above for additional information regarding these items (in millions):

Current wording

The following table sets forth additional information related to certain other items included in net income above, and the portions of each that are included in FFO and AFFO, which may be helpful in assessing our operating results. Please refer to “—Results of Operations” above for additional information regarding these items (in millions):

Previous wording

As of March 31, 2024, we had approximately $913.8 million in liquidity, consisting of unrestricted cash and cash equivalents of $59.9 million and available borrowings under our Revolving Credit Facility (as defined below) of $853.9 million. The Credit Agreement also contains an accordion feature that can increase the total available borrowings to $2.75 billion (from U.S. $1.4 billion plus CAD $150.0 million), subject to terms and conditions.

Current wording

As of June 30, 2024, we had approximately $906.0 million in liquidity, consisting of unrestricted cash and cash equivalents of $36.4 million and available borrowings under our Revolving Credit Facility (as defined below) of $869.6 million. The Credit Agreement also contains an accordion feature that can increase the total available borrowings to $2.75 billion (from U.S. $1.4 billion plus CAD $150.0 million), subject to terms and conditions.

Previous wording

Net cash provided by operating activities was $52.8 million for the three months ended March 31, 2024. Operating cash inflows were derived primarily from the rental payments received under our lease agreements, resident fees and services net of the corresponding operating expenses, and interest payments from borrowers under our loan and preferred equity investments. Operating cash outflows consisted primarily of interest payments on borrowings and payment of general and administrative expenses, including corporate overhead. Increases to operating cash flows primarily relate to completed investment activity, and decreases to operating cash flows primarily relate to disposition activity and interest expense from increased borrowing activity and higher interest rates. In addition, the change in operating cash flows was impacted by the timing of collections from our tenants and borrowers and fluctuations in the operating results of our Senior Housing - Managed communities. We expect our annualized cash flows provided by operating activities to fluctuate as a result of such activity.

Current wording

Net cash provided by operating activities was $132.9 million for the six months ended June 30, 2024. Operating cash inflows were derived primarily from the rental payments received under our lease agreements, resident fees and services net of the corresponding operating expenses, and interest payments from borrowers under our loan and preferred equity investments. Operating cash outflows consisted primarily of interest payments on borrowings and payment of general and administrative expenses, including corporate overhead. Increases to operating cash flows primarily relate to completed investment activity, and decreases to operating cash flows primarily relate to disposition activity and interest expense from increased borrowing activity and higher interest rates. In addition, the change in operating cash flows was impacted by the timing of collections from our tenants and borrowers and fluctuations in the operating results of our Senior Housing - Managed communities. We expect our annualized cash flows provided by operating activities to fluctuate as a result of such activity.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $13.2 million and included $12.9 million used for additions to real estate, $1.0 million used to provide funding for a preferred equity investment, $0.2 million used for the investment in an unconsolidated joint venture and $0.1 million used to provide funding for a loan receivable, partially offset by $0.6 million in repayments of preferred equity investments and $0.4 million in repayments of loans receivable.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $70.5 million and included $36.1 million used for the acquisition of one facility, $25.4 million used for additions to real estate, $19.8 million used to provide funding for loans receivable, $1.0 million used to provide funding for a preferred equity investment and $0.3 million used for the investment in an unconsolidated joint venture, partially offset by $6.2 million in net proceeds from the sales of real estate, $4.7 million in repayments of preferred equity investments and $1.2 million in repayments of loans receivable.

Previous wording

During the three months ended March 31, 2024, net cash used in financing activities was $20.2 million and included $69.4 million of dividends paid to stockholders, $2.6 million of net costs related to payroll tax payments related to the issuance of common stock pursuant to equity compensation arrangements and our ATM Program, $0.5 million of principal repayments on secured debt and $0.1 million of payments of deferred financing costs related to the Credit Agreement, partially offset by $52.4 million of net proceeds from our Revolving Credit Facility.

Current wording

During the six months ended June 30, 2024, net cash used in financing activities was $66.6 million and included $138.9 million of dividends paid to stockholders, $1.0 million of principal repayments on secured debt and $0.1 million of payments of deferred financing costs related to the Credit Agreement, partially offset by $36.9 million of net proceeds from our Revolving

Previous wording

(1)Principal balance does not include discount, net of $4.4 million and deferred financing costs, net of $10.1 million as of March 31, 2024.

Current wording

(1)Principal balance does not include discount, net of $4.6 million and deferred financing costs, net of $9.7 million as of June 30, 2024.

Previous wording

Interest. Our estimated interest and facility fee payments based on principal amounts of debt outstanding as of March 31, 2024, applicable interest rates in effect as of March 31, 2024, and including the impact of interest rate swaps and collars are $84.2 million for the remainder of 2024, $106.8 million in 2025, $106.7 million in 2026, $66.0 million in 2027, $40.6 million in 2028 and $100.9 million thereafter.

Current wording

Interest. Our estimated interest and facility fee payments based on principal amounts of debt outstanding as of June 30, 2024, applicable interest rates in effect as of June 30, 2024, and including the impact of interest rate swaps and collars are $52.6 million for the remainder of 2024, $105.6 million in 2025, $105.6 million in 2026, $66.0 million in 2027, $40.6 million in 2028 and $100.9 million thereafter.

Previous wording

Capital and Other Expenditures and Funding Commitments. For the three months ended March 31, 2024 and 2023, our aggregate capital expenditures were $12.9 million and $19.5 million, respectively. As of March 31, 2024, our aggregate commitment for future capital and other expenditures related to facilities leased under triple-net operating leases was approximately $21 million, of which $16 million will directly result in incremental rental income, and approximately

Current wording

Capital and Other Expenditures and Funding Commitments. For the six months ended June 30, 2024 and 2023, our aggregate capital expenditures were $25.4 million and $38.0 million, respectively. As of June 30, 2024, our aggregate commitment for future capital and other expenditures related to facilities leased under triple-net operating leases was approximately $17 million, of which $13 million will directly result in incremental rental income, and approximately $7 million will be spent over the next 12 months. We also expect to fund capital expenditures related to our Senior Housing - Managed communities.

Previous wording

We paid dividends of $69.4 million on our common stock during the three months ended March 31, 2024. On May 8, 2024, our board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on May 31, 2024 to common stockholders of record as of May 20, 2024.

Current wording

We paid dividends of $138.9 million on our common stock during the six months ended June 30, 2024. On August 7, 2024, our board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on August 30, 2024 to common stockholders of record as of August 19, 2024.

Previous wording

In accordance with Regulation S-X, the following aggregate summarized financial information is provided for Sabra and the Operating Partnership. This aggregate summarized financial information has been prepared from the books and records maintained by us and the Operating Partnership. The aggregate summarized financial information does not include the investments in, nor the earnings from, subsidiaries other than the Operating Partnership and therefore is not necessarily indicative of the results of operations or financial position had the Operating Partnership operated as an independent entity. Intercompany transactions have been eliminated. The aggregate summarized balance sheet information as of March 31, 2024 and December 31, 2023 and aggregate summarized statement of loss information for the three months ended March 31, 2024 is as follows (in thousands):

Current wording

In accordance with Regulation S-X, the following aggregate summarized financial information is provided for Sabra and the Operating Partnership. This aggregate summarized financial information has been prepared from the books and records maintained by us and the Operating Partnership. The aggregate summarized financial information does not include the investments in, nor the earnings from, subsidiaries other than the Operating Partnership and therefore is not necessarily indicative of the results of operations or financial position had the Operating Partnership operated as an independent entity. Intercompany transactions have been eliminated. The aggregate summarized balance sheet information as of June 30, 2024 and December 31, 2023 and aggregate summarized statement of loss information for the six months ended June 30, 2024 is as follows (in thousands):

Previous wording

For the three months ended March 31, 2024, no tenant relationship represented 10% or more of our total revenues.

Current wording

For the three and six months ended June 30, 2024, no tenant relationship represented 10% or more of our total revenues.

Previous wording

For the three months ended March 31, 2024, 39.7% of our revenues was derived directly or indirectly from skilled nursing/transitional care facilities. Medicare reimburses skilled nursing facilities for Medicare Part A services under the Prospective Payment System (“PPS”), as implemented pursuant to the Balanced Budget Act of 1997 and modified pursuant to subsequent laws, most recently the Patient Protection and Affordable Care Act of 2010. PPS regulations predetermine a payment amount per patient, per day, based on a market basket index calculated for all covered costs.

Current wording

For the six months ended June 30, 2024, 40.0% of our revenues was derived directly or indirectly from skilled nursing/transitional care facilities. Medicare reimburses skilled nursing facilities for Medicare Part A services under the Prospective Payment System (“PPS”), as implemented pursuant to the Balanced Budget Act of 1997 and modified pursuant to subsequent laws, most recently the Patient Protection and Affordable Care Act of 2010. PPS regulations predetermine a payment amount per patient, per day, based on a market basket index calculated for all covered costs.

Previous wording

On April 22, 2024, CMS issued a final rule that establishes minimum nurse staffing requirements for long-term care facilities (the “Minimum Staffing Standards”). The Minimum Staffing Standards will require a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 HPRD of direct registered nurse care and 2.45 HPRD of direct nurse aide care. Facilities may use any combination of nurse staff (registered nurse, licensed practical nurse and licensed vocational nurse, or nurse aide) to account for the additional 0.48 HPRD needed to comply with the total nurse staffing standard. Additionally, the Minimum Staffing Standards will require facilities to meet new facility assessment requirements and have a registered nurse onsite 24 hours a day, seven days a week, to provide skilled nursing care. The Minimum Staffing Standards are expected to take effect on June 21, 2024, with a phase-in period consisting of three phases over three years for non-rural facilities and over five years for rural facilities. We believe the Minimum Staffing Standards, if implemented in its current form, will exacerbate the staffing challenges already faced by our tenants.

Current wording

On April 22, 2024, CMS issued a final rule that establishes minimum nurse staffing requirements for long-term care facilities (the “Minimum Staffing Standards”). The Minimum Staffing Standards will require a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 HPRD of direct registered nurse care and 2.45 HPRD of direct nurse aide care. Facilities may use any combination of nurse staff (registered nurse, licensed practical nurse and licensed vocational nurse, or nurse aide) to account for the additional 0.48 HPRD needed to comply with the total nurse staffing standard. Additionally, the Minimum Staffing Standards will require facilities to meet new facility assessment requirements and have a registered nurse onsite 24 hours a day, seven days a week, to provide skilled nursing care. The Minimum Staffing Standards became effective on June 21, 2024, with a compliance deadline for the new facility assessment requirements of August 8, 2024 and a phase-in period consisting of three phases over three years for non-rural facilities and over five years for rural facilities for the staffing requirements. We believe the Minimum Staffing Standards, as implemented in its current form, will exacerbate the staffing challenges already faced by our tenants.

Previous wording

On March 28, 2024, CMS issued a proposed rule regarding fiscal year 2025 Medicare rates for skilled nursing facilities providing an estimated net increase of 4.1% compared to fiscal year 2024 (comprised of (i) a market basket increase of 2.8% plus (ii) a market basket forecast error adjustment of 1.7% and less (iii) a productivity adjustment of 0.4%). These figures do not incorporate any of the estimated value-based purchasing reductions for skilled nursing facilities. The proposed payment rates would become effective on October 1, 2024. Additionally, the proposed rule would expand the civil monetary penalties (“CMP”) that can be imposed for noncompliance to allow for more CMPs per instance and per day.

Current wording

On July 31, 2024, CMS issued a final rule regarding fiscal year 2025 Medicare rates for skilled nursing facilities providing an estimated net increase of 4.2% compared to fiscal year 2024 (comprised of (i) a market basket increase of 3.0% plus (ii) a market basket forecast error adjustment of 1.7% and less (iii) a productivity adjustment of 0.5%). These figures do not incorporate any of the estimated value-based purchasing reductions for skilled nursing facilities. The new payment rates become effective on October 1, 2024. Additionally, the proposed rule expands the civil monetary penalties (“CMP”) that can be imposed for noncompliance to allow for more CMPs per instance and per day.