Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Capital One Securities Inaugural REIT Conference 2021
37 slides from Sabra Health Care Reit's conference presentation, Jan 11, 2021
Slide 1: Consistent Strategy. Deliberate Execution.
CONSISTENT STRATEGY. DELIBERATE EXECUTION. Capital One Securities Inaugural REIT Conference January 11, 2021
Slide 2: Delivering Value
Our vast industry knowledge, experienced executive team and entrepreneurial spirit make Sabra uniquely positioned to succeed in our dynamic industry. We have the size, know-how, balance sheet and passion to deliver long-term value to shareholders. DELIVERING VALUE Capital One Securities Inaugural RE
Slide 3: Strategy
“WE’VE BUILT A STRONG AND RESILIENT FOUNDATION.” – Rick Matros, Chief Executive Officer STRATEGY Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 3
Slide 4: Sabra Today
4 35% 71 $6.3B1 SABRA TODAY STRATEGY Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 DEBT/ASSET VALUE OPERATOR RELATIONSHIPS ENTERPRISE VALUE $975M+ LIQUIDITY 9% MAX RELATIONSHIP CONCENTRATION 20.4% NOI CAGR SINCE 2011 (1) Includes Sabra’s 49% pro rata share of the debt of its uncon
Slide 5: A Resilient and Agile REIT
A RESILIENT AND AGILE REIT Investment ▪ Invest in high-quality, strong-performing senior housing and SNF portfolios ▪ Relationship diversification ▪ Geographic diversification (investments in 43 states and Canada) ▪ Grow private-pay through investments in high-quality managed senior housing ▪ Develo
Slide 6: Strategy in Action
“BY OPPORTUNISTICALLY EXECUTING OUR STRATEGY, WE CONTINUE TO DELIVER LONG-TERM VALUE FOR OUR SHAREHOLDERS.” STRATEGY IN ACTION Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 6 – Talya Nevo-Hacohen, Chief Investment Officer
Slide 7: Strengthened Balance Sheet by Reducing Leverage
7 34 vs 72 STRENGTHENED BALANCE SHEET BY REDUCING LEVERAGE STRATEGY IN ACTION Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 Lowered cost of PERMANENT DEBT by 75 basis points to 3.53% Reduced NET DEBT TO ADJUSTED EBITDA1 ratio from 5.66x to 4.91x DECEMBER 31, 2018 vs SEPTEMBER 30,
Slide 8: Significantly Improved Credit Metrics
8 INTEREST COVERAGE + 1.27x to 5.41x FIXED CHARGE COVERAGE + 1.52x to 5.22x TOTAL DEBT/ASSET VALUE IMPROVED 1400 bps SIGNIFICANTLY IMPROVED CREDIT METRICS STRATEGY IN ACTION Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 DECEMBER 31, 2018 vs SEPTEMBER 30, 2020
Slide 9: Investment Thesis
“WE CUSTOMIZE OUR FINANCIAL SOLUTIONS TO PROVIDE OPERATORS WITH CAPITAL TO INVEST IN THEIR BUSINESS AND SUPPORT THE DELIVERY OF QUALITY CARE.” – Talya Nevo-Hacohen, Chief Investment Officer INVESTMENT THESIS Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 9
Slide 10: Opportunistically Sourced, Creatively Structured and Prudently Financed
OPPORTUNISTICALLY SOURCED, CREATIVELY STRUCTURED AND PRUDENTLY FINANCED Unique, Accretive Investments Utilize our operational and asset management expertise to identify and capitalize on new opportunities where off-market price dislocation exists. Support Operator Expansion Be the capital partner of
Slide 11: Portfolio
“OUR PORTFOLIO AND TENANTS ARE POSITIONED TO DELIVER QUALITY CARE NOW AND IN THE FUTURE.” PORTFOLIO – Peter Nyland, Executive Vice President Asset Management Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 11
Slide 12: COVID-19 Rent Collections and Liquidity
▪ Since the start of the COVID-19 pandemic, we have collected 99.9% of our expected rents. Through the first few business days of January, collections are in line with what we normally receive through this point of the month. ▪ Our balance sheet remains strong, our liquidity increased $23.7 million
Slide 13: COVID-19 Impact on Our Portfolio
The COVID-19 pandemic continues to have a significant impact on the operations of our facilities, although mitigated by government relief packages that continue to provide assistance to our Skilled Nursing/Transitional Care and Specialty Hospital and Other portfolios, and, beginning in the third qua
Slide 14: COVID-19 Impact on Our Portfolio (cont.)
▪ The combined impact of these factors noted on slide 13 has lowered EBITDARM for our leased portfolios and earnings recognized in our Senior Housing-Managed portfolio, though their impact has been partially mitigated thus far due to the provision of the government relief. At this time, we cannot pr
Slide 15: Government Relief Packages for Operators
▪ In response to the COVID-19 pandemic, the federal government approved several relief packages that have benefited our Skilled Nursing/Transitional Care facility operators. Prior to September 1, 2020, few of these programs were available to our Senior Housing operators; as of September 1, 2020, eli
Slide 16: CARES Act Mitigation Sources
Mitigation Source Mitigates EBITDARM Reductions Description Estimated Available (All Sabra Relationships) PRF 1: Yes The CARES Act has, to date, appropriated $175 billion to the Provider Relief Fund (“PRF” or the “Fund”) for hospitals and other healthcare providers nationwide to prevent, prepare for
Slide 17: Other Governmental Actions Benefiting Operators
▪ In addition to the mitigation sources on slide 16, there have been other governmental actions taken that benefit skilled nursing/transitional care operators. These actions include the waiver of the requirement for skilled nursing/transitional care patients to have stayed in a hospital for three da
Slide 18: Superior Returns Start with a Strong Portfolio
8 Years Wtd. Avg. Remaining Lease Term SUPERIOR RETURNS START WITH A STRONG PORTFOLIO 609 Investments1 PORTFOLIO 80% 85% 82% 73% Average Occupancy Percentage 2.07x 1.31x Rent Coverage3 71 Relationships 39% Skilled Mix SH - Leased SH - Managed 2 SNF/TC/Hosp/Oth. SH - Leased (1) Includes investment in
Slide 19: Proprietary Pipeline of Purpose-Built Assets
PROJECTS 25 CURRENT TOTAL INVESTMENT $390M EXPECTED REAL ESTATE VALUE 1 $493M COMPLETED AND PLANNED PROJECTS PROPRIETARY PIPELINE OF PURPOSE-BUILT ASSETS ENHANCES THE QUALITY OF OUR PORTFOLIO PORTFOLIO (1) Represents the value of completed projects at Sabra’s purchase price and the projected purchas
Slide 20: Effective Asset Management and Strong Operator Relationships
Senior Housing - Managed 14.9% Specialty Hospitals and Other 10.4% Senior Housing - Leased 9.8% Interest and Other Income 2.0% Skilled Nursing / Transitional Care 62.9% EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Crafted portfolio of high- quality and diverse facilities passionate a
Slide 21: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 21
Slide 22: Our Operators Are Driven by Passion for Quality of Care
OUR OPERATORS ARE DRIVEN BY AN UNWAVERING PASSION: ADVANCING THE QUALITY OF CARE We Work With Operators Who Are: ▪ Highly engaged ▪ Nimble ▪ Regional experts ▪ In markets with favorable demographics ▪ Well positioned for the future of health care delivery OPERATORS Capital One Securities Inaugural R
Slide 23: We Support Our Operators
WE SUPPORT OUR OPERATORS We Invest in Our Tenants’ Success: ▪ Redevelopment ▪ Expansion ▪ Strategic development ▪ Flexible equity and debt capital solutions OPERATORS Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 23
Slide 24: Strategy in Action: Operator and Executive Quotes
“WHEN IT COMES TO EXECUTING OUR STRATEGY, WE DO WHAT WE SAY WE ARE GOING TO DO.” – Talya Nevo-Hacohen, Chief Investment Officer STRATEGY IN ACTION – Rick Matros, Chief Executive Officer “WE’VE CONSISTENTLY DELIVERED VALUE TO OUR SHAREHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” Capital One Sec
Slide 25: Proprietary Information Technology System
PROPRIETARY INFORMATION TECHNOLOGY SYSTEM ▪ Supports the efficient and accurate collection of tenant, financial, asset management and acquisitions information. ▪ Furthers our ability to drive value to shareholders by enabling our team to remain lean, yet effective. CREATING OPERATING EFFICIENCIES OP
Slide 26: Industry-Leading Business Intelligence Tools
DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS Capital One Securities Inaugural REIT Conference OPERATORS January 11, 2021 26
Slide 27: Business Intelligence Tools Detail
Data Integrity Audit Real-time MDS verification analyzes the accuracy of the Minimum Data Set (MDS) assessment prior to CMS submission. Each MDS is checked for logical and clinical coding accuracy, with recommended actions when inaccurate, incomplete, or inconsistent information is identified. Helpf
Slide 28: Diverse Operator Base, Passionate About Care
Avamere 8.5% North American 7.4% Signature Healthcare 7.3% Cadia 7.2% Signature Behavioral 6.6%Enlivant 7.6%Holiday 5.1% Other 2.2% Other 48.1% Relationship Concentration 1 DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE By diversifying our tenant concentration, we’ve curated a portfolio equipped to pe
Slide 29: Performance
“WE’VE DELIVERED ON OUR PROMISE TO STRENGTHEN OUR BALANCE SHEET AND ARE POISED TO CAPITALIZE ON FUTURE GROWTH OPPORTUNITIES.” – Harold Andrews, Jr., Chief Financial Officer PERFORMANCE Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 29
Slide 30: Balanced Capital Structure
Common Equity Value 56% Secured Debt 7% Unsecured Debt 37% Capital Structure 1 ENTERPRISE VALUE $6.3B BALANCED CAPITAL STRUCTURE Our diverse menu of capital options ensures that we have ready access to low- cost capital to fund our growth. PERFORMANCE (1) As of 9/30/2020. Includes Sabra’s 49% pro ra
Slide 31: Credit Metrics vs. Investment Grade Peers
(1) Credit metrics (except net debt to adjusted EBITDA) are calculated in accordance with the credit agreement relating to our revolving credit facility and the indentures relating to our unsecured senior notes. (2) Investment Grade Peers consists of PEAK, WELL, VTR, OHI and NHI, except with respect
Slide 32: Favorable Profile with Staggered Maturities
FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE AT SEPTEMBER 30, 2020 PERFORMANCE (1) Term loans are pre-payable at par. (2) Revolving Credit Facility is subject to two six-month extension options. (dollars in millions) Capital One Securities Inaugural REIT ConferenceJanuary 11, 20
Slide 33: Peer Valuation and Portfolio Comparison
9.8x 11.0x 12.0x 13.5x 15.2x 18.0x 0.0x 4.0x 8.0x 12.0x 16.0x 20.0x SBRA NHI LTC CTRE OHI Big 3 Average 7.0% 4.3% 4.6% 5.9% 6.6% 7.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% SBRA Big 3 Average CTRE LTC NHI OHI 10.6% 6.9% 15.2% 17.7% 31.0% 35.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% SBRA Big 3 Average LTC
Slide 34: Well-Positioned Portfolio
SNF CONCENTRATION 1 SNF EBITDARM COVERAGE 1,3TOP FIVE RELATIONSHIP CONCENTRATION 1 (1) Represents latest available concentration and coverage for peers as of 1/7/2021. (2) Based on Annualized Cash NOI as of 9/30/2020 for real estate investments, investments in loans receivable and other investments,
Slide 35: Appendix
APPENDIX Capital One Securities Inaugural REIT ConferenceJanuary 11, 2021 35
Slide 36: Non-GAAP 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. Adjusted EBITDA is a
Slide 37: Forward-Looking Statements
This presentation contains “forward-looking” statements that 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 presentation include, but are not limited to, all statements re
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