Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Q1 2022 Earnings Presentation
34 slides from Sabra Health Care Reit's earnings presentation, May 5, 2022
Slide 1: What Happens Inside Our Buildings Matters Most
What Happens Inside Our Buildings Matters Most Investor Presentation | May 4, 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
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. May 4, 2022 Investor P
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 May 4, 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 May 4, 2022 Investor Pre
Slide 8: Adaptive Reuse for Behavioral Health
STRATEGY IN ACTION Adaptive Reuse for Behavioral Health • Sabra’s Behavioral Health portfolio has grown considerably in recent years with a total investment of approximately $730 million currently yielding 8.3%, which accounts for roughly 13% of the Company’s Annualized Cash NOI. • In total, six pro
Slide 9: 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 10: Committed to Diversity, Equity & Inclusion
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Committed to Diversity, Equity & Inclusion 57% As of March 31, 2022, 26% As of March 31, 2022, 26% of our team members women comprised self-identified as being members 57% of our workforce of one or more ethnic minorities. We believe our ethnic diversity and 64%
Slide 11: 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 12: 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 13: 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 May 4, 2022
Slide 14: Our Success Is Predicated on a Healthy Portfolio
PORTFOLIO Our Success Is Predicated on a Healthy Portfolio As of March 31, 2022 440 72% 79% 79% 85% 81% SNF/TC SH - Leased SH - Managed BH Hosp./Oth. Investments1 Average Occupancy Percentage2 76 38% Relationships Skilled Mix2 7 1.87x 1.02x 1.98x 7.52x SNF/TC SH - Leased BH Hosp./Oth. Years Wtd. Avg
Slide 15: Diverse Portfolio, Positioned to Perform
PORTFOLIO Diverse Portfolio, Positioned to Perform As of March 31, 2022 Relationship Concentration1 Asset Class Concentration1 North American Healthcare, 8.7% Behavioral Health, 13.4% Signature Healthcare, 8.5% Avamere Family Senior Housing - of Companies, Leased, 12.2% 6.8% Signature Other, 55.6% B
Slide 16: 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 May 4, 2022 Investor Presentation 16
Slide 17: COVID-19 Impact on Our Business
PORTFOLIO COVID-19 Impact on Our Business ▪ We have collected 99.5% of our forecasted rents from the beginning of the COVID-19 pandemic through April 2022, including 100% of Avamere’s rent under its previous and amended leases. ▪ We continue to maintain a strong Net Debt to Adjusted EBITDA ratio of
Slide 18: COVID-19 Impact on Our Portfolio (Cont.)
PORTFOLIO COVID-19 Impact on Our Portfolio (Cont.) OCCUPANCY TRENDS – SKILLED NURSING ▪ After initial headwinds related to the Omicron variant of COVID-19, Sabra’s seven largest skilled nursing tenants (representing roughly 40% of Annualized Cash NOI) saw a sizable sequential increase in occupancy d
Slide 19: COVID-19 Impact on Our Portfolio (Cont.)
PORTFOLIO COVID-19 Impact on Our Portfolio (Cont.) SAME-STORE SENIOR HOUSING – MANAGED ▪ Headwinds related to the Omicron variant abated as the first quarter progressed, which drove a healthy sequential increase in occupancy across our needs-based assisted living portfolio. Our independent living po
Slide 20: 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 May 4, 2022 Investor Presentation 20
Slide 21: 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 May 4, 2022 Investor Presentation 21
Slide 22: Driving Performance with Free Access to Industry-Leading Business Intelligence Tools
OPERATORS Driving Performance with Free Access to Industry-Leading Business Intelligence Tools May 4, 2022 Investor Presentation 22
Slide 23: PointRight Solutions for SNF Tenants
OPERATORS PointRight Solutions for SNF Tenants Data Integrity Audit (DIA) Real-time MDS verification analysis. Ensures accuracy and quality of MDS data with insights into PDPM reimbursement. Each MDS is checked for logical and clinical coding accuracy with helpful alerts to identify quality measure
Slide 24: 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 25: 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 May 4, 2022 Investor Presentation 25
Slide 26: Balanced Capital Structure
PERFORMANCE Balanced Capital Structure Capital Structure 1 Common Equity Value Our diverse menu of capital 53% options and $1.0 billion of available liquidity ensures that we have ready access to low cost capital to fund our growth. CONSOLIDATED Unsecured Debt ENTERPRISE 46% Our credit facility cont
Slide 27: Strong Investment-Grade Credit Metrics
PERFORMANCE Strong Investment-Grade Credit Metrics Investment grade Sabra 1Q 22 1 peers median 2 Net Debt to Adjusted EBITDA 5.11x 3 6.11x Interest Coverage Ratio 5.21x 3 4.24x Debt as a % of Asset Value 34% 39% Secured Debt as a % of Asset 1% 5% Value 1 Key credit statistics (except Net Debt to Adj
Slide 28: Favorable Profile with Staggered Maturities
PERFORMANCE Favorable Profile with Staggered Maturities Debt maturity profile at March 31, 2022 (Dollars in millions) 1 2 1 Revolving Credit Facility is subject to two six-month extension options. 2 Represents actual contractual interest rates excluding private mortgage insurance and impact of inter
Slide 29: Attractive Relative Valuation
PERFORMANCE Attractive Relative Valuation Forward FFO multiples 1 Dividend yield 2 21.9x 10.3% 10.7% 7.0% 7.1% 13.0x 6.5% 10.9x 11.4x 8.9x 7.6x 3.0% SBRA OHI CTRE NHI LTC Big 2 SBRA Big 2 CTRE LTC NHI OHI Average 3 Average 3 Premium / discount to consensus NAV Portfolio composition (% Annualized Cas
Slide 30: Well-Positioned Portfolio
PERFORMANCE Well-Positioned Portfolio SNF concentration 1 Top five relationships SNF EBITDARM SH EBITDARM concentration 1 coverage 1,3 coverage 1 2.80x 64% 64% 2.70x 87% 1.10x 75% 49% 1.06x 1.92x 62% 1.87x 59% 39% 1.02x 36% 1.48x 0.99x 0.95x 32% 4,5 4 SBRA 2 NHI LTC OHI CTRE SBRA 2 OHI LTC NHI CTRE
Slide 31: Appendix
Appendix May 4, 2022 Investor Presentation 31
Slide 32: 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 33: 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 34: 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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