Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Q2 2022 Earnings Presentation
31 slides from Sabra Health Care Reit's earnings presentation, Aug 4, 2022
Slide 1: What Happens Inside Our Buildings Cost Matters Most
What Happens Cost Inside Our Buildings Matters Most Investor Presentation | August May 4, 2022 7, 2022
Slide 2: Disclaimers: Forward-Looking Statements
Disclaimers Forward-Looking Statements This presentation contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward looking statements. These statements may be ident
Slide 3: Disclaimers: Tenant Information and Non-GAAP Measures
Disclaimers Tenant, Operator and Borrower Information This presentation includes information (e.g., EBITDARM Coverage and Occupancy Percentage) regarding certain of our tenants that lease properties from us and our operators and borrowers, most of which are not subject to SEC reporting requirements.
Slide 4: Uniquely Positioned to Thrive
LOREM IPSUM Heading Uniquely Positioned to Thrive Our passion for quality care and deep industry experience uniquely position Sabra to succeed in the dynamic healthcare real estate market. We have the size, know-how and resilient balance sheet necessary to deliver long-term value to shareholders. Au
Slide 5: We know what happens inside our buildings matters most
STRATEGY “We know what happens inside our buildings matters most. That’s why we align ourselves with operators who skillfully and compassionately care for the residents and patients in the buildings we own.” -Rick Matros (he/him), Chief Executive Officer August 7, 2022 Investor Presentation 5
Slide 6: Our Strategy — Passion Meets Know-how
STRATEGY Our Strategy — Passion Meets Know-how Unique, Accretive Investments - Utilize our operational and asset management experience to identify and capitalize on new opportunities where off-market price dislocation exists. Support Operator Expansion - Be the capital partner of choice for the expa
Slide 7: By consistently and deliberately executing our strategy
STRATEGY IN ACTION “By consistently and deliberately executing our strategy, we deliver long-term value to our shareholders and provide the capital our tenants need to invest in their business and deliver quality care.” -Talya Nevo-Hacohen (she/her), Chief Investment Officer August 7, 2022 Investor
Slide 8: Adaptive Reuse for Behavioral Health
STRATEGY IN ACTION Adaptive Reuse for Behavioral Health • Sabra’s growing behavioral health portfolio represents a total investment of approximately $730 million with a weighted average cash yield of over 8%, which accounts for roughly 13% of the Company’s Annualized Cash NOI. • In total, nine prope
Slide 9: Proactive Asset Management
STRATEGY IN ACTION Proactive Asset Management • Sabra continues to take a proactive approach to asset management, which includes regularly reassessing our portfolio to help ensure that we have the right operator for the right property. • Year to date, we have transitioned, or are in the process of t
Slide 10: Good for the Planet. Good for Our Stakeholders.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Good for the Planet. Good for Our Stakeholders. “ESG principles are intrinsically tied to our objective to drive shareholder value by operating efficiently, sustainably and with our stakeholders’ best interest in mind.” -Rick Matros (he/him), Chief Executive Offi
Slide 11: Committed to Diversity, Equity & Inclusion
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Committed to Diversity, Equity & Inclusion 57% As of June 30, 2022, 30% As of June 30, 2022, 30% of our team members women comprised self-identified as being members of one or more ethnic minorities. 57% of our workforce We believe our ethnic diversity and 64% of
Slide 12: Addressing Critical Health And Wellness Issues In Senior Facilities
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Addressing Critical Health And Wellness Issues In Senior Facilities Sabra is a proud Alliance Member of the Well Living Lab and active participant in WISE— Wellness Innovation in Senior Living—initiative. The initiative will leverage scientific research conducted
Slide 13: WELL Health-Safety Ratings
ENVIRONMENTAL, SOCIAL AND GOVERNANCE WELL Health-Safety Ratings Enlivant, one of Sabra’s largest operators, recently became the first senior living organization to achieve the WELL Health-Safety Rating for its entire portfolio. We are encouraging all our operators to pursue the WELL Health-Safety Ra
Slide 14: Ethics. Transparency. Accountability.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Ethics. Transparency. Accountability. Our strong, independent board brings unique skill sets and relevant experience that enrich our decision making. Healthcare Real Estate Finance Leadership Portfolio Management ESG Regulatory Risk Management Policy August 7, 20
Slide 15: Our Success Is Predicated on a Healthy Portfolio
PORTFOLIO Our Success Is Predicated on a Healthy Portfolio As of June 30, 2022 73% 80% 80% 83% 80% 441 1 SNF/TC SH - Leased Average Occupancy Percentage SH - Managed BH 2 Hosp./Oth. Investments 75 Relationships 38% Skilled Mix 2 7 Years Wtd. Avg. 1.88x 1.09x 1.83x 7.07x SNF/TC SH - Leased BH Hosp./O
Slide 16: Diverse Portfolio, Positioned to Perform
PORTFOLIO Diverse Portfolio, Positioned to Perform As of June 30, 2022 1 1 Relationship Concentration Asset Class Concentration North American Healthcare, 8.7% Behavioral Health, 13.4% Signature Healthcare, 8.6% Senior Housing - Signature Leased, 11.2% Behavioral, 6.9% Other, 53.4% Avamere Family of
Slide 17: We invest in relationships with operators who are nimble
PORTFOLIO “We invest in relationships with operators who are nimble and poised to deliver excellent care now and in the future.” -Peter Nyland, Executive Vice President, Asset Management August 7, 2022 Investor Presentation 17
Slide 18: Reimbursement Trends
PORTFOLIO Reimbursement Trends • On July 29, 2022, CMS issued a final rule regarding fiscal year 2023 Medicare rates for skilled nursing facilities providing an estimated net increase of 2.7% compared to fiscal year 2022 (an increase as a result of an update to the payment rates of 5.1%, partially o
Slide 19: Advancing the Quality of Care
OPERATORS Advancing the Quality of Care We Work with Operators Who Are: • Committed to their mission • Nimble • Regional experts • In markets with favorable demographics • Well-positioned for the future of healthcare delivery August 7, 2022 Investor Presentation 19
Slide 20: We Support Our Operators
OPERATORS We Support Our Operators We Invest in Our Tenants’ Success: • Redevelopment / Adaptive Reuse • Expansion • Strategic development • Flexible equity and debt capital solutions August 7, 2022 Investor Presentation 20
Slide 21: Operator testimonial: Leo Brown Group
OPERATORS “What started with a single sale/leaseback transaction for a senior living community in Indiana has grown into a multi-state, multi- community relationship. We truly value the collaboration, insight and support we receive from Sabra. Sabra is who we think about first when it comes to a cap
Slide 22: Our strong balance sheet and ready access to capital
PERFORMANCE “Our strong balance sheet and ready access to capital allows us to thoughtfully finance investment opportunities and drive value for our shareholders.” –Michael Costa, Chief Financial Officer August 7, 2022 Investor Presentation 22
Slide 23: Balanced Capital Structure
PERFORMANCE Balanced Capital Structure 1 Capital Structure Our diverse menu of capital options and $0.9 billion of available liquidity ensures that we have ready access to low cost capital to fund our growth. Unsecured Debt Common Equity Value 39% 60% Our credit facility contains an accordion featur
Slide 24: Strong Investment-Grade Credit Metrics
PERFORMANCE Strong Investment-Grade Credit Metrics 1 Investment grade Sabra 2Q 22 2 peers median 3 Net Debt to Adjusted EBITDA 5.44x 6.04x 3 Interest Coverage Ratio 4.81x 4.31x Debt as a % of Asset Value 35% 39% Secured Debt as a % of Asset Value 1% 5% We expect to reduce leverage closer to our 5.0x
Slide 25: Favorable Profile with Staggered Maturities
PERFORMANCE Favorable Profile with Staggered Maturities Debt maturity profile at June 30, 2022 (Dollars in millions) 5.82% $1,600 5.12% 3.89% $1,400 3.33% 3.11% 2.88% 2.90% 3.20% 3.08% 2.84% 2.86% $1,200 $1,000 $2 $800 $600 $2 $858 $2 $400 $2 800 557 500 $200 $2 350 $1 $142 $2 100 $2 $2 $31 $0 2022
Slide 26: Attractive Valuation Relative to Direct Peers
PERFORMANCE Attractive Valuation Relative to Direct Peers 1 2 Forward FFO multiples Dividend yield 8.5% 15.8x 7.7% 14.1x 14.6x 10.5x 5.2% 5.3% 5.5% 10.2x SBRA OHI CTRE NHI LTC SBRA CTRE LTC NHI OHI 3 Premium / discount to consensus NAV Portfolio composition (% Annualized Cash NOI) 7% 2% 5% 18% 29.7%
Slide 27: Well-Positioned Portfolio
PERFORMANCE Well-Positioned Portfolio 1 SNF concentration Top five relationships SNF EBITDARM SH EBITDARM 1 1,3 1 concentration coverage coverage 2.80x 64% 64% 2.70x 87% 1.09x 1.10x 1.04x 1.06x 72% 0.95x 2.14x 47% 1.88x 61% 57% 39% 36% 1.44x 32% 2 2 4,5 4 SBRA NHI LTC OHI CTRE SBRA OHI LTC NHI CTRE
Slide 28: Appendix
Appendix Appendix August 7, 2022 Investor Presentation 28
Slide 29: Definitions
APPENDIX Definitions Adjusted EBITDA.* Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company's long-term equity award program, and loan loss reserves.
Slide 30: Definitions
APPENDIX Definitions Funds From Operations (“FFO”) and Adjusted FFO (“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 Nati
Slide 31: Definitions
APPENDIX Definitions Occupancy Percentage. Occupancy Percentage represents the facilities’ average operating occupancy for the period indicated. The percentages are calculated by dividing the actual census from the period presented by the available beds/units for the same period. Occupancy includes
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