Sabra Reports Third Quarter 2012 Results and Declares Quarterly Dividend; Revenues, Net Income, FFO and AFFO Increased 21%,

Sabra Reports Third Quarter 2012 Results and Declares Quarterly Dividend;
Revenues, Net Income, FFO and AFFO Increased 21%, 123%, 38% and 19%,
Respectively, Over the Third Quarter 2011

IRVINE, Calif., Oct. 29, 2012 (GLOBE NEWSWIRE) -- Sabra Health Care REIT, Inc.
("Sabra," the "Company" or "we") (Nasdaq:SBRA) today announced results of
operations for the third quarter of 2012.

RECENT HIGHLIGHTS

  *For the third quarter of 2012, FFO, AFFO and net income per diluted share
    were $0.34, $0.39 and $0.14, respectively, up from $0.28, $0.38 and $0.07,
    respectively, for the third quarter of 2011.
  *During the third quarter, revenues increased 21% over the same period in
    2011 from $21.5 million to $26.0 million.
  *During the third quarter, we purchased an independent living facility and
    a memory care facility in two separate transactions for $42.5 million.
  *During the third quarter, we entered into a pipeline agreement to acquire
    up to ten assisted living and memory care facilities that will be leased
    to and operated by a RIDEA-compliant joint venture between Sabra and First
    Phoenix Group, LLC.
  *During the third quarter, we refinanced an existing $13.5 million HUD
    mortgage note, reducing the interest rate from 5.90% to 2.49% and
    increasing the outstanding principal amount by $0.4 million. This will
    result in annual interest savings of approximately $0.4 million, bringing
    our total annual interest savings including previously announced
    refinancings to $1.4 million.
  *During the third quarter, we issued a $100 million aggregate principal
    amount add-on to our existing 8.125% senior notes due 2018 at a price of
    106.0% for net proceeds of $103.0 million (after underwriting costs and
    other offering expenses) and a yield-to-maturity of 6.92%. FFO and AFFO
    were impacted by $1.1 million and $1.3 million, respectively, ($0.03 per
    diluted share) during the quarter by the additional debt after considering
    the repayment of the $42.5 million outstanding balance on our secured
    revolving credit facility. The additional debt is expected to impact FFO
    and AFFO for the year ended December 31, 2012 by $2.3 million ($0.06 per
    diluted share) and $2.6 million ($0.07 per diluted share), respectively.
    The impact of the senior notes add-on was not reflected in our 2012
    outlook updated on July 23, 2012.
  *During the third quarter, we utilized the accordion feature to increase
    the borrowing capacity under our secured revolving credit facility to
    $230.0 million from $200.0 million, increasing our current borrowing
    availability to $201.6 million. As of September 30, 2012, there were no
    amounts outstanding on our secured revolving credit facility.
  *On October 29, 2012, our board of directors declared a quarterly cash
    dividend of $0.33 per share of common stock. The dividend will be paid on
    November 30, 2012 to stockholders of record as of the close of business on
    November 15, 2012.

Commenting on the third quarter results, Rick Matros, CEO and Chairman, said,
"We are quite pleased with our activity these past few months. Our recently
announced deals were all in the senior housing space including our first RIDEA
and development deal. Our senior housing pipeline has filled up very
effectively and is allowing us to focus on diversifying our asset base in that
space sooner than anticipated. We will still do skilled nursing deals but they
will likely be small and a lower priority than senior housing. We believe we
can execute in this fashion while continuing to diversify away from
Sun/Genesis at the current pace." Matros continued, "We have ample capital on
hand to accommodate our current pipeline and believe we have the optionality
to be opportunistic as we contemplate future capital raises."

Performance for the Third Quarter of 2012

During the third quarter of 2012, we recognized FFO of $12.7 million ($0.34
per diluted share) and AFFO of $14.9 million ($0.39 per diluted share),
compared to FFO of $9.2 million ($0.28 per diluted share) and AFFO of $12.5
million ($0.38 per diluted share) for the same period in 2011. AFFO represents
FFO excluding non-cash revenues (including straight-line rental income
adjustments, amortization of acquired above/below market lease intangibles and
non-cash interest income adjustments), non-cash expenses (including
stock-based compensation expense, amortization of deferred financing costs and
amortization of debt discounts and premiums) and acquisition pursuit costs,
which aggregated to a net adjustment of $2.1 million ($0.05 per diluted share)
for the period. During the third quarter of 2012, net income was $5.2 million
($0.14 per diluted share), compared to net income of $2.3 million ($0.07 per
diluted share) for the same period in 2011. We recognized revenues of $26.0
million during the third quarter of 2012 compared to $21.5 million during the
third quarter of 2011. In addition, during the third quarter of 2012, we
generated $23.8 million of cash from operating activities, up from $16.6
million during the same period of 2011. Finally, EBITDARM Coverage and EBITDAR
Coverage were 1.82x and 1.54x, respectively, for the three months ended
September 30, 2012 after adjusting to eliminate the impact of facilities
identified as strategic disposition candidates.

LIQUIDITY

As of September 30, 2012, we had approximately $232.1 million in liquidity,
consisting of unrestricted cash and cash equivalents of $30.5 million and
available borrowings of $201.6 million under our secured revolving credit
facility.

CONFERENCE CALL AND COMPANY INFORMATION

A conference call to discuss the 2012 third quarter results will be held on
Tuesday, October 30, 2012 at 8:00am Pacific Time. The dial in number for the
conference call is 888-428-9480 and the participant code is "Sabra." A replay
of the call will also be available immediately following the call and for 30
days, ending on November 29, 2012, by dialing (888) 203-1112, and using
passcode 9443640. The Company's supplemental information package for the third
quarter will also be available on the Company's website in the "Investor
Relations" section.

ABOUT SABRA

Sabra Health Care REIT, Inc. (Nasdaq:SBRA), a Maryland corporation, operates
as a self-administered, self-managed real estate investment trust (a "REIT")
that, through its subsidiaries, owns and invests in real estate serving the
healthcare industry. Sabra leases properties to tenants and operators
throughout the United States. As of September 30, 2012, Sabra's investment
portfolio included 105 properties leased to operators/tenants under triple-net
lease agreements (consisting of (i) 93 skilled nursing/post-acute facilities,
(ii) 11 senior housing facilities, and (iii) one acute care hospital), two
mortgage loan investments and one mezzanine loan investment. As of September
30, 2012, Sabra's properties were located in 26 states and included 11,689
licensed beds.

The Sabra Health Care REIT, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=8563

FORWARD-LOOKING STATEMENTS SAFE HARBOR

This release contains "forward-looking" statements as defined in the Private
Securities Litigation Reform Act of 1995. These statements may be identified,
without limitation, by the use of "expects," "believes," "intends," "should"
or comparable terms or the negative thereof. Forward-looking statements in
this release include all statements regarding our expectations concerning our
acquisition pipeline and our capital needs.

Our actual results may differ materially from those projected or contemplated
by our forward-looking statements as a result of various factors, including,
among others, the following: our dependence on Sun Healthcare Group, Inc.
("Sun") until we are able to further diversify our portfolio; our dependence
on the operating success of our tenants; changes in general economic
conditions and volatility in financial and credit markets; the dependence of
our tenants on reimbursement from governmental and other third-party payors;
the significant amount of and our ability to service our indebtedness;
covenants in our debt agreements that may restrict our ability to make
acquisitions, incur additional indebtedness and refinance indebtedness on
favorable terms; increases in market interest rates; our ability to raise
capital through equity financings; the relatively illiquid nature of real
estate investments; competitive conditions in our industry; the loss of key
management personnel or other employees; the impact of litigation and rising
insurance costs on the business of our tenants; uninsured or underinsured
losses affecting our properties and the possibility of environmental
compliance costs and liabilities; our ability to maintain our status as a
REIT; compliance with REIT requirements and certain tax matters related to our
status as a REIT; and other factors discussed from time to time in our news
releases, public statements and/or filings with the Securities and Exchange
Commission (the "SEC"), especially the "Risk Factors" sections of our Annual
and Quarterly Reports on Forms 10-K and 10-Q. We assume no, and hereby
disclaim any, obligation to update any of the foregoing or any other
forward-looking statements as a result of new information or new or future
developments, except as otherwise required by law.

TENANT INFORMATION

This release includes information regarding Sun. Sun is subject to the
reporting requirements of the SEC and is required to file with the SEC annual
reports containing audited financial information and quarterly reports
containing unaudited financial information. Sun's filings with the SEC can be
found at www.sec.gov. This release also includes information regarding each of
our other tenants that lease properties from us. The information related to
Sun and our other tenants that is provided in this release has been provided
by the tenants or, in the case of Sun, derived from Sun's public filings or
provided by Sun. We have not independently verified this information. We have
no reason to believe that such information is inaccurate in any material
respect. We are providing this data for informational purposes only.

NOTE REGARDING NON-GAAP FINANCIAL MEASURES

This release includes the following financial measures defined as non-GAAP
financial measures by the SEC: EBITDA, funds from operations ("FFO"), Adjusted
FFO ("AFFO"), Normalized AFFO, FFO per diluted share, AFFO per diluted share
and normalized AFFO per diluted share. These measures may be different than
non-GAAP financial measures used by other companies, and the presentation of
these measures is not intended to be considered in isolation or as a
substitute for financial information prepared and presented in accordance with
U.S. generally accepted accounting principles. An explanation of these
non-GAAP financial measures is included under "Definitions of Non-GAAP
Financial Measures" in this release, and reconciliations of these non-GAAP
financial measures to the GAAP financial measures we consider most comparable
are included under "Reconciliations of Net Income to EBITDA, Funds from
Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO"
in this release.


SABRA HEALTH CARE REIT, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)

                      Three Months Ended September    Nine Months Ended
                       30,                             September 30,
                      2012             2011           2012        2011
Revenues               $26,038          $21,470        $74,882     $57,876
EBITDA                 $22,260          $16,818        $63,294     $47,631
Net income             $5,226           $2,344         $15,554     $5,678
FFO                    $12,722          $9,194         $37,910     $24,905
AFFO                   $14,868          $12,525        $44,528     $31,884
Normalized AFFO        $14,868          $12,525        $44,528     $32,194
Per share data:                                                 
Diluted EPS            $0.14            $0.07          $0.42       $0.20
Diluted FFO            $0.34            $0.28          $1.02       $0.89
Diluted AFFO           $0.39            $0.38          $1.18       $1.13
Diluted Normalized     $0.39            $0.38          $1.18       $1.14
AFFO
Weighted-average
number of common                                                
shares outstanding,
diluted:
EPS & FFO              37,465,114       33,049,621     37,276,013  27,891,690
AFFO & Normalized AFFO 37,748,716       33,320,262     37,660,657  28,142,867
Net cash flow from     $23,815          $16,581        $47,902     $34,509
operations
                                                               
                      September30,    December31,              
                       2012             2011
Real Estate Portfolio                                           
Total Equity           105              97                        
Investments (#)
Total Equity           $863,879         $767,054                  
Investments, gross ($)
Total Licensed         11,689           10,877                    
Beds/Units
Weighted Average
Remaining Lease Term   135              144                       
(in months)
Total Debt Investments 3                —                         
(#)
Total Debt
Investments, gross ($) $22,111          $—                        
^(1)
                                                               
                       Three Months     Twelve Months
                      Ended            Ended                     
                       September 30,    September 30,
                       2012             2012
EBITDARM Coverage ^(2) 1.82x            1.80x                     
EBITDAR Coverage ^(2)  1.54x            1.50x                     
                                                               
                      September30,    December31,              
                       2012             2011
Debt                                                            
Book Value                                                      
Fixed Rate Debt        $430,112         $324,239                  
Variable Rate Debt     58,262           59,159                    
Total Debt             $488,374         $383,398                  
Weighted Average                                                
Effective Rate
Fixed Rate Debt        7.12%            7.55%                     
Variable Rate Debt     5.00%            5.50%                     
Total Debt             6.87%            7.24%                     
% of Total                                                      
Fixed Rate Debt        88.1%            84.6%                     
Variable Rate Debt     11.9%            15.4%                     
Total Debt             100.0%           100.0%                    
Availability Under     $201,600         $100,000                  
Credit Facility:
Available Liquidity
(Unrestricted Cash and $232,077         $142,250                  
Availability Under
Credit Facility)

^(1) Total Debt Investments, gross consists of principal of $21.9million plus
capitalized origination fees of $0.2million.
^(2) EBITDARM and EBITDAR and related coverages for facilities with new
tenants/operators are only included in periods subsequent to our acquisition
of the facilities and exclude the impact of strategic disposition candidates.
All facility financial performance data are presented one month in arrears.



SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data) 

                                  Three Months Ended    Nine Months Ended
                                   September 30,         September 30,
                                  2012       2011       2012       2011
Revenues:                                                        
Rental income                      $25,420    $21,294    $73,903    $57,483
Interest income                    618        176        979        393
Total revenues                     26,038     21,470     74,882     57,876
                                                                
Expenses:                                                        
Depreciation and amortization      7,496      6,850      22,356     19,227
Interest                           9,538      7,624      25,384     22,726
General and administrative         3,778      4,652      11,588     10,245
                                                                
Total expenses                     20,812     19,126     59,328     52,198
Net income                         $5,226     $2,344     $15,554    $5,678
Net income per common share, basic $0.14      $0.07      $0.42      $0.20
Net income per common share,       $0.14      $0.07      $0.42      $0.20
diluted
Weighted-average number of common  37,178,162 32,986,657 37,121,384 27,797,411
shares outstanding, basic
Weighted-average number of common  37,465,114 33,049,621 37,276,013 27,891,690
shares outstanding, diluted



SABRA HEALTH CARE REIT, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)

                                                   September30, December31,
                                                    2012          2011
                                                   (unaudited)   
Assets                                                           
Real estate investments, net of accumulated
depreciation of $131,071 and $108,916 as of         $733,054      $658,377
September 30, 2012 and December 31, 2011,
respectively
Loans receivable, net                               22,092        —
Cash and cash equivalents                           30,477        42,250
Restricted cash                                     5,197         6,093
Deferred tax assets                                 25,540        25,540
Prepaid expenses, deferred financing costs and      26,651        17,390
other assets
Total assets                                        $843,011      $749,650
Liabilities and stockholders' equity                             
Mortgage notes payable                              $157,513      $158,398
Senior unsecured notes payable                      330,861       225,000
Accounts payable and accrued liabilities            17,778        14,139
Tax liability                                       25,540        25,540
Total liabilities                                   531,692       423,077
Commitments and contingencies                                    
Stockholders' equity                                             
Preferred stock, $.01 par value; 10,000,000 shares
authorized, zero shares issued and outstanding as   —             —
of September 30, 2012 and December31, 2011
Common stock, $.01 par value; 125,000,000 shares
authorized, 37,051,242 and 36,891,712 shares issued 371           369
and outstanding as of September 30, 2012 and
December31, 2011, respectively
Additional paid-in capital                          351,106       344,995
Cumulative distributions in excess of net income    (40,158)      (18,791)
Total stockholders' equity                          311,319       326,573
Total liabilities and stockholders' equity          $843,011      $749,650



SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

                                              Nine Months Ended September 30,
                                              2012          2011
Cash flows from operating activities:                       
Net income                                     $15,554       $5,678
Adjustments to reconcile net income to net                  
cash provided by operating activities:
Depreciation and amortization                  22,356        19,227
Non-cash interest income adjustments           18            —
Amortization of deferred financing costs       2,620         1,507
Stock-based compensation expense               5,749         3,249
Amortization of premium on notes payable       (12)          (11)
Amortization of premium on senior unsecured    (139)         
notes
Straight-line rental income adjustments        (2,857)       (720)
Changes in operating assets and liabilities:                
Prepaid expenses and other assets              116           556
Accounts payable and accrued liabilities       7,211         7,860
Restricted cash                                (2,714)       (2,837)
Net cash provided by operating activities      47,902        34,509
                                                           
Cash flows from investing activities:                       
Acquisitions of real estate                    (98,050)      (187,700)
Origination of loans receivable                (22,111)      —
Acquisition of note receivable                 —             (5,348)
Additions to real estate                       (1,039)       (86)
Net cash used in investing activities          (121,200)     (193,134)
                                                           
Cash flows from financing activities:                       
Proceeds from secured revolving credit         42,500        —
facility
Proceeds from mortgage notes payable           35,829        —
Proceeds from issuance of senior unsecured     106,000       —
notes
Payments on secured revolving credit facility  (42,500)      —
Principal payments on mortgage notes payable   (36,701)      (2,249)
Payments of deferred financing costs           (7,045)       (495)
Issuance of common stock                       144           163,431
Dividends paid                                 (36,702)      (19,878)
Net cash provided by financing activities      61,525        140,809
                                                           
Net decrease in cash and cash equivalents      (11,773)      (17,816)
Cash and cash equivalents, beginning of period 42,250        74,233
Cash and cash equivalents, end of period       $30,477       $56,417
Supplemental disclosure of cash flow                        
information:
Interest paid                                  $17,116       $17,024



SABRA HEALTH CARE REIT, INC.
RECONCILIATIONS OF NET INCOME TO EBITDA, FUNDS FROM OPERATIONS (FFO),
ADJUSTED FUNDS FROM OPERATIONS (AFFO) AND NORMALIZED AFFO
(dollars in thousands, except per share data)

                     Three Months Ended September Nine Months Ended September
                      30,                          30,
                     2012           2011          2012          2011
Net income            $5,226         $2,344        $15,554       $5,678
Interest expense      9,538          7,624         25,384        22,726
Depreciation and      7,496          6,850         22,356        19,227
amortization
EBITDA                $22,260        $16,818       $63,294       $47,631
                                                             
Net income            $5,226         $2,344        $15,554       $5,678
Add:                                                          
Depreciation of real  7,496          6,850         22,356        19,227
estate assets
Funds from Operations $12,722        $9,194        $37,910       $24,905
(FFO)
                                                             
Acquisition pursuit   367            2,643         1,239         2,954
costs
Stock-based           1,907          771           5,749         3,249
compensation expense
Straight-line rental  (1,167)        (591)         (2,857)       (720)
income adjustments
Amortization of
deferred financing    1,173          512           2,620         1,507
costs
Amortization of debt  (143)          (4)           (151)         (11)
premium
Non-cash interest     9              —             18            —
income adjustments
Adjusted Funds from   $14,868        $12,525       $44,528       $31,884
Operations (AFFO)
Start-up costs        —              —             —             310
Normalized AFFO       $14,868        $12,525       $44,528       $32,194
Net income per        $0.14          $0.07         $0.42         $0.20
diluted common share
FFO per diluted       $0.34          $0.28         $1.02         $0.89
common share
AFFO per diluted      $0.39          $0.38         $1.18         $1.13
common share
Normalized AFFO per   $0.39          $0.38         $1.18         $1.14
diluted common share
Weighted average
number of common                                              
shares outstanding,
diluted:
Net income and FFO    37,465,114     33,049,621    37,276,013    27,891,690
AFFO and Normalized   37,748,716     33,320,262    37,660,657    28,142,867
AFFO

                  DEFINITIONS OF NON-GAAP FINANCIAL MEASURES

This press release includes the non-GAAP financial measures of EBITDA, FFO,
AFFO, normalized AFFO, FFO per diluted share, AFFO per diluted share and
normalized AFFO per diluted share, which are reconciled to net income, which
we believe is the most comparable GAAP measure. We believe that the use of
FFO, AFFO and Normalized AFFO (and the related per share amounts), combined
with the required GAAP presentations, improves the understanding of operating
results of REITs among investors and makes comparisons of operating results
among such companies more meaningful.

EBITDA.The real estate industry uses earnings before interest, taxes,
depreciation and amortization ("EBITDA"), a non-GAAP financial measure, as a
measure of both operating performance and liquidity. The Company uses EBITDA
to measure both its operating performance and liquidity. By excluding interest
expense, EBITDA allows investors to measure the Company's operating
performance independent of its capital structure and indebtedness and,
therefore, allows for a more meaningful comparison of its operating
performance between quarters as well as annual periods and to compare its
operating performance to that of other companies, both in the real estate
industry and in other industries. As a liquidity measure, the Company believes
that EBITDA helps investors analyze the Company's ability to meet its interest
payments on outstanding debt. The Company believes investors should consider
EBITDA in conjunction with net income (the primary measure of the Company's
performance) and the other required GAAP measures of its performance and
liquidity, to improve their understanding of the Company's operating results
and liquidity, and to make more meaningful comparisons of its performance
between periods and against other companies. EBITDA has limitations as an
analytical tool and should be used in conjunction with the Company's required
GAAP presentations. EBITDA does not reflect the Company's historical cash
expenditures or future cash requirements for capital expenditures or
contractual commitments. While EBITDA is a relevant and widely used measure of
operating performance and liquidity, it does not represent net income or cash
flow from operations as defined by GAAP and it should not be considered as an
alternative to those indicators in evaluating operating performance or
liquidity. Further, the Company's computation of EBITDA may not be comparable
to similar measures reported by other companies.

EBITDAR.Earnings before interest, taxes, depreciation, amortization and rent
("EBITDAR") for a particular facility accruing to the operator/tenant of the
property (not the Company) for the period presented plus EBITDAR (excluding
one-time adjustments) for the period presented for all other operations of any
entities that guarantee the tenants' lease obligations to the Company (if
applicable). The Company uses EBITDARin determining EBITDAR Coverage.
EBITDARhas limitations as an analytical tool.EBITDARdoes not reflect
historical cash expenditures or future cash requirements for facility capital
expenditures or contractual commitments.In addition, EBITDARdoes not
represent a property's net income or cash flow from operations and should not
be considered an alternative to those indicators.The Company receives EBITDAR
and other information from its operators/tenants and relevant guarantors and
utilizes EBITDARas a supplemental measure of their ability to generate
sufficient liquidity to meet related obligations to the Company. All facility
and tenant financial performance data is derived solely from information
provided by operators/tenants and guarantors without independent verification
by the Company and is presented one month in arrears. The Company includes
EBITDAR with respect to a property if the property was operated at any time
during the period presented subject to a lease with the Company. EBITDAR for
facilities with new tenants/operators are only included in periods subsequent
to the Company's acquisition of the facilities. EBITDAR excludes the impact of
strategic disposition candidates.

EBITDAR Coverage.EBITDAR for the trailing 3 and 12 month periods prior to and
including the period presented divided by the same period cash rent for all of
our facilities plus rent expense for other operations of any entity that
guarantees the tenants' lease obligation to the Company.EBITDAR Coverage is a
supplemental measure of an operator/tenant's and relevant guarantor's ability
to meet their cash rent and other obligations to the Company.However, its
usefulness is limited by, among other things, the same factors that limit the
usefulness of EBITDAR. All facility and tenant data are derived solely from
information provided by operators/tenants and guarantors without independent
verification by the Company. All such data is presented one month in arrears
and excludes the impact of strategic disposition candidates.

EBITDARM.Earnings before interest, taxes, depreciation, amortization, rent
and management fees ("EBITDARM") for a particular facility accruing to the
operator/tenant of the property (not the Company), for the period presented.
The Company uses EBITDARMin determining EBITDARM Coverage.The usefulness of
EBITDARM is limited by the same factors that limit the usefulness of EBITDAR.
Together with EBITDAR, the Company utilizes EBITDARM to evaluate the core
operations of the properties by eliminating management fees, which vary based
on operator/tenant and its operating structure.All facility financial
performance data is derived solely from information provided by
operators/tenants without independent verification by the Company. All such
data is presented one month in arrears. The Company includes EBITDARM for a
property if it was operated at any time during the period presented subject to
a lease with the Company. EBITDARM for facilities with new tenants/operators
are only included in periods subsequent to our acquisition of the facilities.
EBITDARM excludes the impact of strategic disposition candidates.

EBITDARM Coverage.EBITDARM for the trailing 3 and 12 month periods prior to
and including the period presented divided by the same period cash
rent.EBITDARM coverage is a supplemental measure of a property's ability to
generate cash flows for the operator/tenant (not the Company) to meet the
operator's/tenant's related cash rent and other obligations to the
Company.However, its usefulness is limited by, among other things, the same
factors that limit the usefulness of EBITDARM. All facility data is derived
solely from information provided by operators/tenants without independent
verification by the Company. All such data is presented one month in arrears
and excludes the impact of strategic disposition candidates.

Funds From Operations ("FFO") and Adjusted Funds from Operations ("AFFO").The
Company believes that net income as defined by GAAP is the most appropriate
earnings measure. The Company also believes that Funds From Operations, or
FFO, as defined in accordance with the definition used by the National
Association of Real Estate Investment Trusts ("NAREIT"), and Adjusted Funds
from Operations, or AFFO, (and related per share amounts) are important
non-GAAP supplemental measures of operating performance for a real estate
investment trust. Because the historical cost accounting convention used for
real estate assets requires straight-line depreciation (except on land), such
accounting presentation implies that the value of real estate assets
diminishes predictably over time. However, since real estate values have
historically risen or fallen with market and other conditions, presentations
of operating results for a real estate investment trust that uses historical
cost accounting for depreciation could be less informative. Thus, NAREIT
created FFO as a supplemental measure of operating performance for real estate
investment trusts that excludes historical cost depreciation and amortization,
among other items, from net income, as defined by GAAP. FFO is defined as net
income, computed in accordance with GAAP, excluding gains or losses from real
estate dispositions, plus real estate depreciation and amortization. AFFO is
defined as FFO excluding non-cash revenues (including straight-line rental
income adjustments, amortization of acquired above/below market lease
intangibles and non-cash interest income adjustments), non-cash expenses
(including stock-based compensation expense, amortization of deferred
financing costs and amortization of debt discounts and premiums) and
acquisition pursuit costs. The Company believes that the use of FFO and AFFO
(and the related per share amounts), combined with the required GAAP
presentations, improves the understanding of operating results of real estate
investment trusts among investors and makes comparisons of operating results
among such companies more meaningful. The Company considers FFO and AFFO to be
useful measures for reviewing comparative operating and financial performance
because, by excluding gains or losses related to sales of previously
depreciated operating real estate assets and real estate depreciation and
amortization, and, for AFFO, by excluding non-cash revenues (including
straight-line rental income adjustments, amortization of acquired above/below
market lease intangibles and non-cash interest income adjustments), non-cash
expenses (including stock-based compensation expense, amortization of deferred
financing costs and amortization of debt discounts and premiums) and
acquisition pursuit costs, FFO and AFFO can help investors compare the
operating performance of the Company between periods or as compared to other
companies. While FFO and AFFO are relevant and widely used measures of
operating performance of real estate investment trusts, they do not represent
cash flows from operations or net income as defined by GAAP and should not be
considered an alternative to those measures in evaluating the Company's
liquidity or operating performance. FFO and AFFO also do not consider the
costs associated with capital expenditures related to the Company's real
estate assets nor do they purport to be indicative of cash available to fund
the Company's future cash requirements. Further, the Company's computation of
FFO and AFFO may not be comparable to FFO and AFFO reported by other real
estate investment trusts that do not define FFO in accordance with the current
NAREIT definition or that interpret the current NAREIT definition or define
AFFO differently from the Company.

Normalized AFFO.Normalized AFFO represents AFFO adjusted for one-time
start-up costs and non-recurring income and expenses. The Company considers
normalized AFFO to be a useful measure to evaluate the Company's operating
results excluding start-up costs and non-recurring income and expenses.
Normalized AFFO can help investors compare the operating performance of the
Company between periods or as compared to other companies. Normalized AFFO
does not represent cash flows from operations or net income as defined by GAAP
and should not be considered an alternative to those measures in evaluating
the Company's liquidity or operating performance. Normalized AFFO also does
not consider the costs associated with capital expenditures related to the
Company's real estate assets nor does it purport to be indicative of cash
available to fund the Company's future cash requirements. Further, the
Company's computation of normalized AFFO may not be comparable to normalized
AFFO reported by other REITs that do not define FFO in accordance with the
current NAREIT definition or that interpret the current NAREIT definition or
define AFFO or normalized AFFO differently from the Company.


CONTACT: Investor & Media Inquiries: (949) 679-0410

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