Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Investor Presentation (August 2006)
30 slides from Sonida Senior Living's investor presentation, Aug 29, 2006
Slide 1: Capital Senior Living Corporation
Capital Senior Living Corporation
Slide 2: Forward-Looking Statements
Forward-Looking Statements The forward-looking statements in this presentation are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to complete the refinancing of certain of our wholly owned comm
Slide 3: Investment Highlights
Investment Highlights Favorable demographics and improving metrics Strong growth in same-store community net income Acquisition opportunities in highly fragmented industry Existing infrastructure results in low marginal integration cost Predominately private pay with minimal federal regulation Finan
Slide 4: Company Overview
Company Overview Owns and/or operates 61 communities in 22 states No. of Communities Resident Capacity Resident Capacity Resident Capacity Resident Capacity No. of Communities IL AL SN Total Wholly Owned 25 3,578 298 50 3,926 JV Ownership/Mgmt. 12 454 981 - 1,435 Leased 18 2,352 577 120 3,049 Manage
Slide 5: Senior Living Industry Demographics
Senior Living Industry Demographics 2000 2005 2010 2015 2020 2025 2030 Population Age 75+ 16.6 17.9 18.5 19.6 22.3 27 32.6 Population Age 85+ 4.2 4.9 5.8 6.4 6.7 7.4 8.9 Source: U.S. Census Bureau
Slide 6: Senior Living Industry
AL IL CCRC East 35 30 10 Senior Living Industry Source: American Seniors Housing Association Seniors Housing Construction Report, 2005 AL IL CCRC 0.29 0.38 0.33 • Seniors Housing Supply by Number of Properties (15,857 properties) • Seniors Housing Supply by Number of Units (1,918,112 units) AL IL CC
Slide 7: Senior Housing Construction
Senior Housing Construction New Units Under Construction 1997 1998 1999 2000 2001 2002 2003 2004 2005 East 42760 47863 62064 37755 22687 16929 19907 23552 23362 Source: American Seniors Housing Association Seniors Housing Construction Report, 2005 CAGR of 1.3%
Slide 8: Senior Housing Construction
Senior Housing Construction Source: American Seniors Housing Association Seniors Housing Construction Report, 2005 NIC Key Financial Indicators 1997 1998 1999 2000 2001 2002 2003 2004 2005 IL 9671 10206 13042 12415 9274 5077 6028 7216 6843 AL 22380 32666 31273 14096 8005 3627 6147 6034 6022 CCRC 107
Slide 9: Senior Housing Capitalization Rates
Source: National Investment Center for the Seniors Housing & Care Industry Note: Q1 2005 data not available Senior Living Industry Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Q1 Independent Living 0.1 0.099 0.104 0.103 0.1 0.091 0.094 0.091 0.082 0.082 0.085 0.082 Assisted Living 0.109 0.114 0.114 0.11 0.109 0
Slide 10: The Capital Advantage: Senior Living Options (Independent Living)
The Capital Advantage: Senior Living Options Spacious apartments with a variety of floor plans Restaurant-style dining 24-hour staffing Social events, recreational activities, educational programs and outings Scheduled transportation Housekeeping and linen service On-site beauty salon and barber sho
Slide 11: The Capital Advantage: Senior Living Options (Assisted Living)
The Capital Advantage: Senior Living Options Three delicious meals daily and snacks Medication reminders Assistance with activities of daily living such as bathing, dressing and grooming 24-hour on-site staff Emergency call systems Resident "well-being" checks Scheduled entertainment & activities Sc
Slide 12: Resident Demographics at CSU Communities
Resident Demographics at CSU Communities Average age of resident: 85 years Average age of resident moving in: 82 years Average stay period: 2-3 years Percent of female residents: 80% Resident turnover is primarily attributed to death or need for higher care
Slide 13: The Capital Advantage: High-Quality Communities
The Capital Advantage: High-Quality Communities
Slide 14: The Capital Advantage: Established National Platform
? Wholly Owned (25) ? JV Ownership/Managed (12) ? Leased (18) ? Management Only (6) ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? SW Region Duane Ness (13) Linda McAlister (10) Midwest Region Mark West (20) Gary Fernandez (9) ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dallas Region Carole B
Slide 15: The Capital Advantage: Years of Management Expertise
The Capital Advantage: 161 Years of Management Expertise (Parenthetical indicates years of experience in industry.) James A. Stroud Chairman (21) Lawrence A. Cohen Vice-Chairman/CEO (21) Keith N. Johannessen President/COO (27) Rob L. Goodpaster VP Marketing (29) David W. Beathard VP Operations (32)
Slide 16: The Capital Advantage: Proven Track Record
The Capital Advantage: Proven Track Record Stabilized Operating Results Capital Senior Living Industry Averages Industry Averages Capital Senior Living Independent Living Assisted Living Occupancy 1 91.0% 92.5% 89.0% Operating Margins 2,3 48.0% 47.1% 38.4% Second Quarter 2006 CSU and First Quarter 2
Slide 17: The Capital Advantage: Proven Track Record
The Capital Advantage: Proven Track Record All Communities Under Management Same Store Analysis Source: Second Quarter 2006 CSU and from The State of Seniors Housing 2005 by the American Seniors Housing Association (ASHA) Capital Senior Living Industry Averages Industry Averages Capital Senior Livin
Slide 18: Yearly Median Increases in Resident Revenue
Yearly Median Increases in Resident Revenue Year Independent Living Independent Living Assisted Living Assisted Living Year Existing Residents New Residents Existing Residents New Residents 2005 4% 4% 5% 5% 2004 4% 4% 5% 5% 2003 4% 5% 4% 5% 2002 4% 5% 5% 5% 2001 4.5% 5% 5% 5.5% 2000 4% 5% 4% 4.5% 19
Slide 19: 2006 Business Plan
2006 Business Plan Sale/leaseback transactions Generate gains Monetize equity in communities Reduce and fix interest rates on remaining debt Exercise option to purchase seven CGI communities Enhance value of communities Improve operating income Increase assisted living capacity Expand ancillary/supp
Slide 20: 2006 Business Plan
2006 Business Plan Acquisitions Joint Ventures REIT acquisitions / leasebacks Increase third-party fee income Management Development
Slide 21: Sale/Leaseback Transactions
Initial lease term of 10 years with renewal options Gains recognized over 10 years Initial lease rate is 8% with conditional escalation provisions Sale/Leaseback Transactions $ in Millions Blackstone JV Towne Centre Three Communities CGIM Total Sales Price $85.0 $29.0 $54.0 $43.0 $211.0 CSU Gain $4.
Slide 22: Operating Leverage from Achieving 93% Occupancy
Operating Leverage from Achieving 93% Occupancy in Consolidated Communities $5.7 Million $7.2 Million $143.9 Million Annualized revenue as of June 2006 Effect of a 5% increase in average rents Effect of achieving 93% average occupancy
Slide 23: Growth Strategies: Joint Ventures
Growth Strategies: Joint Ventures Joint venture partners Blackstone GE Healthcare Prudential Seeking additional acquisitions of senior housing communities Co-invest with joint venture partners to participate in economics: 5% - 15% Capital Senior Living 95% - 85% JV Partners Earn management fees, ret
Slide 24: Joint Ventures: Benefits of Financial Leverage
Joint Ventures: Benefits of Financial Leverage 75% Debt / 25% Equity 75% Debt / 25% Equity 70% Debt / 30% Equity 70% Debt / 30% Equity Cap Rate 8.0% 9.0% 8.0% 9.0% Interest Rate 6.25% 6.25% 6.25% 6.25% ROE 13.3% 17.3% 12.0% 15.4% ROE with 25-year amortization 8.0% 12.0% 8.0% 11.3%
Slide 25: Example of Joint Venture Economics
Example of Joint Venture Economics Venture CSU Partner NOI $ 10,000,000 Cap Rate 8% Purchase Price $125,000,000 Debt $ 93,750,000 Equity $ 31,250,000 $3,125,000 $28,125,000 Revenues $ 30,000,000 Mgt. Fees (5%) $1,500,000 ROE (13.3%) $ 414,100 $ 3,726,600 Total First Year Return $1,914,100 $ 3,726,60
Slide 26: Example of Enhancing Shareholder Value
Example of Enhancing Shareholder Value $100 Million of Lease Acquisitions $125 Million of Joint Venture Acquisitions 93% Occupancy in Consolidated Communities Revenue $25.0 $1.5 $12.9 (a) EBITDAR $10.0 $1.5 $9.0 (b) Lease Expense $8.0 - - Implied CSU Equity Value Per Share (at 26.5M shares) (c) $1.7
Slide 27: Income Statement: Q2 Comparison
Income Statement: Q2 Comparison 2006 2005 (in millions, except per share) (in millions, except per share) Resident & Health Care Revenue $33.3 $23.5 Other Revenue 0.6 0.9 Total Revenues $33.9 $24.4 Operating Expenses 21.5 16.2 General & Administrative Expenses 2.7 2.4 Lease Costs Depreciation & Amor
Slide 28: Balance Sheet
Balance Sheet ASSETS ASSETS Cash and Securities $ 25.7 Other Current Assets 24.1 Total Current Assets $ 49.8 Fixed Assets $314.9 Other Assets 32.2 TOTAL ASSETS $396.9 As of June 30, 2006 (in millions) LIABILITIES & EQUITY LIABILITIES & EQUITY Current Liabilities $ 27.9 Long-Term Debt 198.7 Other Lia
Slide 29: Capital Senior Living Corporation
Capital Senior Living Corporation 2
Slide 30: Capital Senior Living Corporation
Capital Senior Living Corporation
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