Sabra Health Care REIT Inc

Previous wording

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

Current wording

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

Previous wording

Our primary business consists of acquiring, financing and owning real estate property to be leased to third party tenants in the healthcare sector. We primarily generate revenues by leasing properties to tenants and owning properties operated by third-party property managers throughout the United States (“U.S.”) and Canada.

Current wording

Our primary business consists of acquiring, financing and owning real property to be leased to third party tenants in the healthcare sector. We primarily generate revenues by leasing properties to tenants and owning properties operated by third-party property managers throughout the United States (“U.S.”) and Canada.

Previous wording

We employ a disciplined approach in our healthcare real estate investment strategy by investing in assets that provide attractive opportunities for dividend growth and appreciation of asset values, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value.

Current wording

We employ a disciplined approach in our healthcare real estate investment strategy by investing in assets that provide attractive opportunities for earnings growth and appreciation of asset values, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value.

Previous wording

During thesix months ended June 30, 2024, we acquiredone Senior Housing - Leased community for consideration of $36.1 million, including acquisition costs. See Note 3, “Recent Real Estate Acquisitions (Consolidated),” in the Notes to Consolidated Financial Statements for additional information regarding this investment.

Current wording

During thenine months ended September 30, 2024, we acquiredtwo Senior Housing - Managed communities and one Senior Housing - Leased community for aggregate consideration of $112.2 million, including acquisition costs. See Note 3, “Recent Real Estate Acquisitions (Consolidated),” in the Notes to Consolidated Financial Statements for additional information regarding these investments.

Previous wording

During thesix months ended June 30, 2024, we completed the sale of four skilled nursing/transitional care facilities for aggregate consideration, net of closing costs, of$6.2 million. The net carrying value of the assets and liabilities of these facilities was$4.4 million, which resulted in an aggregate$1.8 million net gain on sale. We continue to evaluate additional assets for sale as part of our initiative to recycle capital and further improve our portfolio quality.

Current wording

During thenine months ended September 30, 2024, we completed the sale of eight skilled nursing/transitional care facilities for aggregate consideration, net of closing costs, of$40.5 million. The net carrying value of the assets and liabilities of these facilities was$44.5 million, which resulted in an aggregate$4.0 million net loss on sale. We continue to evaluate additional assets for sale as part of our initiative to recycle capital and further improve our portfolio quality.

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 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.

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 nine months ended September 30, 2024.

Previous 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.

Current wording

As of September 30, 2024, our investment portfolio consisted of 373 real estate properties held for investment, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. As of September 30, 2023, our investment portfolio consisted of 377 real estate properties held for investment, 12 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. The results of operations presented are not directly comparable due to ongoing acquisition and disposition activity, including our capital recycling initiative.

Previous wording

During the three months ended June 30, 2024, we recognized $99.1 million of rental income compared to $94.3 million for the three months ended June 30, 2023. The $4.8 million net increase in rental income is related to (i) a $4.3 million net increase in rental and related revenues related to leases that are no longer accounted for on an accrual basis, (ii) a $1.9 million increase from properties acquired after April 1, 2023 and (iii) a $0.7 million increase due to incremental revenue related to capital expenditures. These increases are offset bya $2.2 million decrease from properties disposed of after April 1, 2023.

Current wording

During the three months ended September 30, 2024, we recognized $94.6 million of rental income compared to $93.1 million for the three months ended September 30, 2023. The $1.5 million net increase in rental income is related to(i) a $1.9 million increase from properties acquired after July 1, 2023, (ii) a $1.5 million net increase in rental and related revenues related to leases that are no longer accounted for on an accrual basis, (iii) a $0.8 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index, (iv)a $0.8 million increase from properties that were transitioned to new operatorsand (v)a $0.6 million increase due to incremental revenue related to capital expenditures. These increases are partially offset byan increase of $2.4 million in cash and non-cash rent receivable write-offs related to leases that are no longer accounted for on an accrual basis and a $2.1 million decrease from properties disposed of after July 1, 2023.

Previous 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.

Current wording

During the three months ended September 30, 2024, we recognized $73.7 million of resident fees and services compared to $59.7 million for the three months ended September 30, 2023. The $14.0 million net increase is due to a $5.3 million increase related to five facilities that were transitioned to Senior Housing - Managed communities after July 1, 2023, a $4.2 million increase related to two Senior Housing - Managed communities acquired after July 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 six months ended June 30, 2024, we recognized $18.0 million of interest and other income compared to $17.2 million for the six months ended June 30, 2023. The net increase of $0.8 million is due to (i) a $0.6 million increase due to increased fundings for existing investments, (ii) a $0.6 million increase from investments made after January 1, 2023 and (iii) a $0.3 million increase in bank interest income, partially offset by a $0.7 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 September 30, 2024, we recognized $9.7 million of interest and other income compared to $8.8 million for the three months ended September 30, 2023. The net increase of $0.9 million is due to (i) a $0.4 million increase from investments made after July 1, 2023, (ii) a $0.2 million lease termination payment primarily related to one skilled nursing/transitional care facility, (iii) a $0.1 million increase due to increased fundings for existing investments and (iv) a $0.1 million increase in bank interest income.

Previous wording

During the three months ended June 30, 2024, we incurred $41.7 million of depreciation and amortization expense compared to $44.1 million for the three months ended June 30, 2023. The net decrease of $2.5 million is due to a $2.1 million decrease due to assets that have been fully depreciated and a $1.6 million decrease from properties disposed of after April 1, 2023. These decreases are partially offset by a $0.6 million increase from additions to real estate and a $0.5 million increase from properties acquired after April 1, 2023.

Current wording

During the three months ended September 30, 2024, we incurred $42.7 million of depreciation and amortization expense compared to $43.2 million for the three months ended September 30, 2023. The net decrease of $0.5 million is due to a $1.5 million decrease due to assets that have been fully depreciated and a $1.3 million decrease from properties disposed of after July 1, 2023. These decreases are partially offset by a $1.9 million increase from properties acquired after July 1, 2023 and a $0.5 million increase from additions to real estate.

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 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).

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 September 30, 2024, we incurred $29.5 million of interest expense compared to $28.2 million for the three months ended September 30, 2023. The $1.3 million net increase is primarily related to a $1.8 million increase in interest expense related to borrowings under the Credit Agreement (as defined below), partially offset by a $0.5 million decrease in non-cash interest expense related to our interest rate hedges.

Previous 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.

Current wording

During the three months ended September 30, 2024, we recognized $4.3 million of triple-net portfolio operating expenses compared to $4.3 million during the three months ended September 30, 2023. The $34,000 net decrease is primarily due to facilities that have since transitioned to new operators who are now paying the property taxes directly and adjustments to our estimates related to property taxes.

Previous wording

During the three months ended June 30, 2024, we recognized $50.4 million of Senior Housing - Managed portfolio operating expenses compared to $44.0 million for the three months ended June 30, 2023. The $6.4 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 April 1, 2023, (ii) a $0.6 million increase in employee compensation primarily due to increased labor rates and staffing, (iii) a $0.4 million increase in management fees, dining expenses and housekeeping due to increased occupancy and (iv) a $0.2 million increase in administrative and corporate overhead expense.

Current wording

During the three months ended September 30, 2024, we recognized $54.2 million of Senior Housing - Managed portfolio operating expenses compared to $44.5 million for the three months ended September 30, 2023. The $9.7 million net increase is due to (i) a $4.6 million increase related to five facilities that were transitioned to Senior Housing - Managed communities after July 1, 2023, (ii) a $2.5 million increase related to two Senior Housing - Managed communities acquired after July 1, 2023, (iii) a $1.4 million increase in employee compensation primarily due to increased labor rates and staffing, (iv) a $0.6 million increase in management fees, dining expenses and housekeeping costs due to increased occupancy and (v) a $0.5 million increase in marketing, administrative and corporate overhead expense.

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 June 30, 2024, general and administrative expenses were $12.7 million compared to $9.5 million during the three months ended June 30, 2023. The $3.2 million net increase is primarily related to a $3.5 million increase in compensation, including a $0.3 million increase in stock-based compensation, for our teammates as a result of changes in performance-based payout assumptions on compensation and annual salary adjustments.

Current wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and acquisition costs. During the three months ended September 30, 2024, general and administrative expenses were $12.4 million compared to $10.8 million during the three months ended September 30, 2023. The $1.6 million net increase is primarily related to a $2.1 million increase in compensation, including a $0.4 million increase in stock-based compensation, for our teammates as a result of changes in performance-based payout assumptions on compensation and annual salary adjustments, partially offset by a $0.2 million decrease in insurance expense.

Previous 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.

Current wording

During the three months ended September 30, 2024 and 2023, we recognized a $0.1 million recovery of and a $0.3 million provision for loan losses, respectively, associated with our loans receivable investments.

Previous 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.

Current wording

No other income was recognized during the three months ended September 30, 2024. During the three months ended September 30, 2023, we recognized $2.2 million of other income related to a $3.7 million gain on insurance proceeds received related to property damage incurred at a vacant facility and $0.5 million of business interruption insurance income related to one Senior Housing - Managed community that was closed due to a fire. This income is partially offset by $1.4 million of transition-related expenses related to the transition of 14 Senior Housing - Managed communities to new operators in 2023.

Previous wording

Net Gain (Loss) on Sales of Real Estate

Current wording

Net Loss on Sales of Real Estate

Previous wording

During the three 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 three months ended June 30, 2023, we recognized an aggregate net loss of $7.8 million related to the disposition of four skilled nursing/transitional care facilities.

Current wording

During the three months ended September 30, 2024, we recognized an aggregate net loss of $5.7 million related to the disposition of four skilled nursing/transitional care facilities. During the three months ended September 30, 2023, we recognized an aggregate net loss of $46.5 million related to the disposition of 13 skilled nursing/transitional care facilities and two Senior Housing - Leased communities.

Previous wording

During the three months ended June 30, 2024, we recognized $0.1 million of income from our unconsolidated joint ventures compared to $0.7 million of loss for the three months ended June 30, 2023. The $0.7 million net improvement is primarily related to a $0.6 million increase in revenues net of operating expenses primarily due to increased occupancy.

Current wording

During the three months ended September 30, 2024, we recognized $0.2 million of income from our unconsolidated joint ventures compared to $0.6 million of loss for the three months ended September 30, 2023. The $0.9 million net improvement is primarily related to a $0.8 million increase in revenues net of operating expenses primarily due to increased occupancy.

Previous wording

During the three months ended June 30, 2024, we recognized $0.4 million of income tax expense compared to $0.3 million during the three months ended June 30, 2023. The $0.1 million increase is due to higher taxable income during the three months ended June 30, 2024.

Current wording

During the three months ended September 30, 2024, we recognized $0.3 million of income tax benefit compared to $0.5 million of income tax expense during the three months ended September 30, 2023. The $0.7 million change is due to lower taxable income during the three months ended September 30, 2024.

Previous wording

Comparison of results of operations for the six months ended June 30, 2024 versus the six months ended June 30, 2023 (dollars in thousands):

Current wording

Comparison of results of operations for the nine months ended September 30, 2024 versus the nine months ended September 30, 2023 (dollars in thousands):

Previous wording

(1)Represents the dollar amount increase (decrease) for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 as a result of investments/dispositions made after January 1, 2023.

Current wording

(1)Represents the dollar amount increase (decrease) for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as a result of investments/dispositions made after January 1, 2023.

Previous wording

(2)Represents the dollar amount increase (decrease) for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 that is not a direct result of investments/dispositions made after January 1, 2023.

Current wording

(2)Represents the dollar amount increase (decrease) for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 that is not a direct result of investments/dispositions made after January 1, 2023.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we recognized $285.4 million of rental income compared to $283.2 million for the nine months ended September 30, 2023. The $2.2 million net increase in rental income is related to(i) a $4.9 million increase from properties acquired after January 1, 2023, (ii) a $4.0 million net increase in rental and related revenues related to leases that are no longer accounted for on an accrual basis,(iii) a $2.4 million increase due to incremental revenue related to capital expenditures, (iv) a $1.7 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index and (v) a $0.5 million increase from properties that were transitioned to new operators. These increases are partially offset by(i) a $7.1 million decrease from properties disposed of after January 1, 2023,(ii) a$2.4 million increase in cash and non-cash rent receivable write-offs related to leases that are no longer accounted for on an accrual basis, (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 and (iv) a $1.1 million decrease from facilities transitioned from triple-net leases to Senior Housing - Managed communities.

Previous wording

Our reported rental and related revenues may be subject to increased variability in the future as a result of lease accounting standards. If at any time we 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. However, there can be no assurances regarding the timing and amount of these revenues. Amounts due under the terms of all of our lease agreements are subject to contractual increases, and contingent rental income may be derived from certain lease agreements. No material contingent rental income was derived during the six months ended June 30, 2024 and 2023.

Current wording

Our reported rental and related revenues may be subject to increased variability in the future as a result of lease accounting standards. If at any time we 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. However, there can be no assurances regarding the timing and amount of these revenues. Amounts due under the terms of all of our lease agreements are subject to contractual increases, and contingent rental income may be derived from certain lease agreements. No material contingent rental income was derived during the nine months ended September 30, 2024 and 2023.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we recognized $207.7 million of resident fees and services compared to $174.9 million for the nine months ended September 30, 2023. The $32.8 million net increase is due to (i) a $16.1 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023, (ii) a $10.8 million increase related to increased occupancy and an increase in rates and (iii) a $6.3 million increase from three Senior Housing - Managed communities 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

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.

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 nine months ended September 30, 2024, we recognized $27.7 million of interest and other income compared to $26.0 million for the nine months ended September 30, 2023. The net increase of $1.8 million is due to (i) a $1.1 million increase from investments made after January 1, 2023, (ii) a $0.6 million increase due to increased fundings for existing investments, (iii) a $0.4 million increase in bank interest income and (iv) a $0.2 million lease termination payment primarily related to one skilled nursing/transitional care facility, partially offset by a $0.7 million decrease in income from investments repaid after January 1, 2023.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we incurred $127.3 million of depreciation and amortization expense compared to $140.2 million for the nine months ended September 30, 2023. The net decrease of $12.9 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 $5.1 million decrease from properties disposed of after January 1, 2023 and (iii) a $4.4 million decrease due to assets that have been fully depreciated. These decreases are partially offset by a $2.7 million increase from properties acquired after January 1, 2023 and a $2.3 million increase from additions to real estate.

Previous wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the six months ended June 30, 2024, we incurred $57.7 million of interest expense compared to $56.9 million for the six months ended June 30, 2023. The $0.9 million net increase is primarily related to an increase in borrowings under the Credit Agreement.

Current wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the nine months ended September 30, 2024, we incurred $87.2 million of interest expense compared to $85.0 million for the nine months ended September 30, 2023. The $2.2 million net increase is primarily related toa $2.7 million increase in interest expense related to borrowings under the Credit Agreement, partially offset by a $0.5 million decrease in non-cash interest expense related to our interest rate hedges.

Previous wording

During the six months ended June 30, 2024, we recognized $8.7 million of triple-net portfolio operating expenses compared to $8.9 million for the six months ended June 30, 2023. The $0.2 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 anincrease due to adjusting our estimates related to property taxes.

Current wording

During the nine months ended September 30, 2024, we recognized $13.0 million of triple-net portfolio operating expenses compared to $13.2 million for the nine months ended September 30, 2023. The $0.3 million net decrease is primarily due tofacilities that have since transitioned to new operators who are now paying the property taxes directly and adjustments to our estimates related to property taxes.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we recognized $154.3 million of Senior Housing - Managed portfolio operating expenses compared to $132.1 million for the nine months ended September 30, 2023. The $22.1 million net increase is due to (i) a $14.2 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023, (ii) a $3.3 million increase related to three Senior Housing - Managed communities acquired after January 1, 2023, (iii) a $2.0 million increase in employee compensation primarily due to increased labor rates and staffing, (iv) a $1.4 million increase in management fees, dining expenses and housekeeping costs due to increased occupancy and (v) a $1.2 million increase in marketing, 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 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.

Current wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and acquisition costs. During the nine months ended September 30, 2024, general and administrative expenses were $37.0 million compared to $30.8 million during the nine months ended September 30, 2023. The $6.2 million net increase is related to a $6.4 million increase in compensation, including a $0.9 million increase in stock-based compensation, for our teammatesas a result of changes in performance-based payout assumptions on compensation andannual salary adjustments and a $0.3 million increase in office expense primarily related to the new corporate office lease, partially offset by a $0.3 million decrease in insurance expense.

Previous wording

During the six months ended June 30, 2024 and 2023, we recognized a $0.3 million recovery of and a $0.2 million provision for loan losses, respectively, primarily associated with our loans receivable investments.

Current wording

During the nine months ended September 30, 2024 and 2023, we recognized a $0.4 million recovery of and a $0.5 million provision for loan losses, respectively, primarily associated with our loans receivable investments.

Previous 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.

Current wording

During the nine months ended September 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 nine months ended September 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 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.

Current wording

No loss on extinguishment of debt was recognized during the nine months ended September 30, 2024. During the nine months ended September 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

Net Gain (Loss) on Sales of Real Estate

Current wording

Net Loss on Sales of Real Estate

Previous 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.

Current wording

During the nine months ended September 30, 2024, we recognized an aggregate net loss of $4.0 million related to the disposition of eight skilled nursing/transitional care facilities. During the nine months ended September 30, 2023, we recognized an aggregate net loss of $75.9 million related to the disposition of 23 skilled nursing/transitional care facilities, three Senior Housing - Leased communities and one Senior Housing - Managed community.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we recognized $0.3 million of loss from our unconsolidated joint ventures compared to $2.1 million of loss for the nine months ended September 30, 2023. The $1.8 million net improvement is primarily related to a $2.0 million increase in revenues net of operating expenses primarily due to increased occupancy, which includes $0.2 million related to one senior housing community acquired by one of our joint ventures after January 1, 2023.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we recognized $0.6 million of income tax expense compared to $1.5 million for the nine months ended September 30, 2023. The $0.9 million decrease is due to lower taxable income during the nine months ended September 30, 2024.