Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — REITWorld 2018 Annual Convention
35 slides from Sabra Health Care Reit's conference presentation, Nov 6, 2018
Slide 1: Dedicated to Value Creation, Committed to Our Operator Roots
DEDICATED TO VALUE CREATION, COMMITTED TO OUR OPERATOR ROOTS REITWorld 2018 Annual Convention November 7 - 9, 2018
Slide 2: Positioned to Perform
POSITIONED TO PERFORM Our operational expertise 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 our shareholders while promoting a high quality of care. November 7 - 9, 2
Slide 3: We've Been Opportunistically Executing Our Strategy and It Shows
WE’VE BEEN OPPORTUNISTICALLY EXECUTING OUR STRATEGY AND IT SHOWS STRONG BALANCE SHEET SCALE Investment Grade1: BBB- / BBB- / Ba1 $7.7B Enterprise Value3 5.50x (5.94x with JV Debt) Leverage2 693 Properties / Investments in 44 States and Canada4 CONSISTENT GROWTH DIVERSIFIED PORTFOLIO 6% Normalized AF
Slide 4: Strategy
STRATEGY “THE STRONGER SABRA YOU SEE TODAY IS THE PRODUCT OF CREATIVE AND TIMELY EXECUTION OF OUR STRATEGY.” – Rick Matros, Chief Executive Officer November 7 - 9, 2018 REITWorld 4
Slide 5: Building a Better REIT
STRATEGY BUILDING A BETTER REIT Investment . Invest in high-quality, strong-performing senior housing and SNF portfolios . Increase relationship diversification . Grow private-pay through investments in high-quality managed senior housing . Develop purpose-built senior housing Finance . Maintain a f
Slide 6: Who We Are Now Is Who We've Always Been
STRATEGY WHO WE ARE NOW IS WHO WE'VE ALWAYS BEEN— FOCUSED, OPPORTUNISTIC AND FORWARD-THINKING 2010 VS 2018 ENTERPRISE VALUE 1 INVESTMENTS 2 RELATIONSHIPS 2 $773.3M vs $7.7B 86 vs 693 1 vs 73 (1) Includes Sabra’s 49% pro rata share of the debt of its unconsolidated joint venture. Share price as of 11
Slide 7: Strategy in Action
STRATEGY IN ACTION “WHEN IT COMES TO EXECUTING OUR STRATEGY, WE DO WHAT WE SAY WE ARE GOING TO DO.” – Talya Nevo-Hacohen, Chief Investment Officer November 7 - 9, 2018 REITWorld 7
Slide 8: Genesis Sales Roadmap
STRATEGY IN ACTION GENESIS SALES ROADMAP LEASED ANNUAL CASH REMAINING RENT AS A % OF 1 (dollars in millions) FACILITIES RENT PRO FORMA NOI Current Status2 24 $ 30.4 5.3% Expected Sales by Q1 2019 (16) (9.6) (under purchase contract) Post Sales Status3 8 $ 20.8 3.7% ESTIMATED PROCEEDS FROM SALE OF 16
Slide 9: Creating Operating Efficiencies
STRATEGY IN ACTION CREATING OPERATING EFFICIENCIES 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
Slide 10: Investment Thesis
INVESTMENT THESIS “WE HAVE THE SKILLS AND ACCESS TO CAPITAL TO TAKE ON DEALS OF ANY SIZE, BUT MORE IMPORTANT, WE ARE NOT AFRAID TO STEP OUTSIDE THE PROVERBIAL BOX. WE CREATIVELY SOURCE, STRUCTURE AND FINANCE DEALS.” – Talya Nevo-Hacohen, Chief Investment Officer November 7 - 9, 2018 REITWorld 10
Slide 11: Focused Strategy, Creative Execution, Consistent Growth
INVESTMENT THESIS FOCUSED STRATEGY, CREATIVE EXECUTION, CONSISTENT GROWTH Unique, Accretive Investments Utilize our operational and asset management expertise to identify and capitalize on new opportunities where off-market price dislocation exists. Support Partner Expansion Be the capital partner o
Slide 12: Portfolio
PORTFOLIO “WE CONTINUE TO REFINE OUR PORTFOLIO TO SUPPORT THE CHANGING NEEDS OF PATIENTS. THE REAL ESTATE IS IMPORTANT, BUT IT'S WHAT GOES ON INSIDE THAT REALLY MATTERS.” – Peter Nyland, Executive Vice President Asset Management November 7 - 9, 2018 REITWorld 12
Slide 13: Superior Returns Start with a Strong Portfolio
PORTFOLIO SUPERIOR RETURNS START WITH A STRONG PORTFOLIO SNF/TC SH - Leased SH – Managed2 Hosp/Oth. 83% 86% 92% 89% 693 Investments1 Average Occupancy Percentage 73 39 % Relationships 1 Skilled Mix1 SNF/TC SH - Leased Hosp/Oth. 9 1.30x 1.07x 3.19x Years Wtd. Avg. Remaining Rent Coverage1 Lease Term1
Slide 14: Proprietary Pipeline of Purpose-Built Assets
PORTFOLIO PROPRIETARY PIPELINE OF PURPOSE-BUILT ASSETS ENHANCES THE QUALITY OF OUR PORTFOLIO COMPLETED AND PLANNED PROJECTS PROJECTS CURRENT TOTAL INVESTMENT 28 $276M EXPECTED REAL EXPECTED INITIAL CASH ESTATE VALUE 1 YIELD ON RENTS $508M 7.1% (1) Represents the value of completed projects at Sabra’
Slide 15: Effective Asset Management and Strong Operator Relationships
PORTFOLIO EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Senior Housing Leased 15% Asset Mix Senior Housing We’ve improved the quality Managed and diversity of our 10% portfolio through opportunistic dispositions Specialty Hospitals and accretive investments. and Other 8% Skilled Nursi
Slide 16: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE November 7 - 9, 2018 REITWorld 16
Slide 17: Operators
OPERATORS “SABRA PROVIDES MORE THAN JUST CAPITAL; IT IS A PARTNER IN OUR SUCCESS BY PROVIDING INDUSTRY METRIC INTELLIGENCE, PURCHASING LEVERAGE AND AN IMPORTANT HEALTH CARE PERSPECTIVE.” – Stephen Silver, Managing Member, Cadia Healthcare November 7 - 9, 2018 REITWorld 17
Slide 18: Our Operators Are Driven by an Unwavering Passion
OPERATORS OUR OPERATORS ARE DRIVEN BY AN UNWAVERING PASSION: ADVANCING THE QUALITY OF CARE We Partner With Operators Who Are: . Highly engaged . Nimble . Regional experts . In markets with favorable demographics . Well positioned for the future of health care delivery November 7 - 9, 2018 REITWorld
Slide 19: We Offer More Than Just Capital
OPERATORS WE OFFER MORE THAN JUST CAPITAL; WE ARE A PARTNER IN OUR OPERATORS’ SUCCESS We Improve Operating Efficiencies: We Invest in Our Mutual Success: . Share best practices . Redevelopment . Facilitate group purchasing . Expansion . Share operational expertise . Strategic development . Provide i
Slide 20: Operator and Management Quotes
STRATEGY IN ACTION OPERATORS “WHEN IT COMES ““WE’VESABRA CONSISTENTLYUNDERSTANDS THE CHALLENGESTO OFEXECUTING OPERATING DELIVERED VALUE TO FACILITIES AND SHOWED IT BY PROVIDINGOUR DINNER STRATEGY, TO OUR SHAREHOLDERS WE DO WHAT WE WHILEOUR TEAM MAINTAINING MEMBERS IMPACTEDA BY HURRICANE FLORENCE…THI
Slide 21: Free Access to Industry-Leading Business Intelligence Tools
OPERATORS DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS November 7 - 9, 2018 REITWorld 21
Slide 22: Diverse Operator Base, Passionate About Care
OPERATORS DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE Relationship Concentration Senior Care Centers 10% Enlivant By diversifying our tenant 8% concentration, we’ve curated a portfolio Avamere Family of equipped to perform in Companies 7% today’s dynamic health care market. Signature Healthcare 6%
Slide 23: Leadership
LEADERSHIP “WHEN WE PUT OUR MINDS TO SOMETHING, WE GET IT DONE.” – Rick Matros, Chief Executive Officer November 7 - 9, 2018 REITWorld 23
Slide 24: Our Care-Driven Approach Is as Unique as Our Leadership Team
OUR CARE-DRIVEN APPROACH IS AS UNIQUE AS OUR LEADERSHIP TEAM . Entrepreneurial . Operational expertise Harold Andrews, Jr. Chief Financial Officer . Fresh thinking Rick Matros Chairman of the Board and Chief Executive Officer . Lean organizational structure Talya Nevo-Hacohen Chief Investment Office
Slide 25: Performance
PERFORMANCE “WE CONSISTENTLY DELIVER VALUE TO OUR STOCKHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” – Harold Andrews, Jr., Chief Financial Officer November 7 - 9, 2018 REITWorld 25
Slide 26: Superb Execution of a Consistent Strategy Fuels Long-Term Growth
PERFORMANCE SUPERB EXECUTION OF A CONSISTENT STRATEGY FUELS LONG-TERM GROWTH 200% Total Shareholder Return 150% as of 11/5/2018 100% 124% Sabra 50% 90% 0% Healthcare REIT Composite1 -50% 92% SNL U.S. Healthcare REIT Equity -100% Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 SBRA SNL
Slide 27: Fortified Balance Sheet with Low Leverage and Enhanced Liquidity
PERFORMANCE FORTIFIED BALANCE SHEET WITH LOW LEVERAGE AND ENHANCED LIQUIDITY . Investment-grade balance sheet1: BBB- / BBB- / Ba1 . Primarily fixed rate (76.7%), unsecured borrowings2,3 . Cost of permanent debt is 4.22%4 . Well-laddered maturity schedule . More than $400 million of available liquidi
Slide 28: Balanced Capital Structure
PERFORMANCE BALANCED CAPITAL STRUCTURE Capital Structure1 Common Equity Value Our diverse menu of capital 52% options ensures that we have ready access to low- cost capital to fund our Unsecured Debt growth. 40% ENTERPRISE VALUE Our Credit Facility which includes a $1.0 billion Revolving Credit Faci
Slide 29: Strong Investment Grade Credit Metrics
PERFORMANCE STRONG INVESTMENT GRADE CREDIT METRICS SABRA PRO INVESTMENT GRADE FORMA 3Q18 1 PEERS MEDIAN 2 Net Debt to Adjusted EBITDA 5.50x3 5.75x Net Debt to Adjusted EBITDA – 5.94x3 5.94x Incl. Unconsolidated Joint Venture Interest Coverage Ratio 4.18x 4.47x Debt as a % of Asset Value 50% 44% Secu
Slide 30: Favorable Profile with Staggered Maturities
PERFORMANCE FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE1 (dollars in millions) $1,600 $1,152 $1,400 381 $1,200 $1,007 $1,000 619 $800 $586 $600 13 81 20 997 5 $400 $274 $208 2 $211 500 $194 500 70 $200 $103 3 104 200 200 $11 189 $1 103 100 $0 2018 2019 2020 2021 2022 2023 2024
Slide 31: Attractive Relative Valuation
PERFORMANCE ATTRACTIVE RELATIVE VALUATION 2019 FFO Multiples1 Dividend Yield 22.0x 12.0% 9.5% 16.5x 15.8x 8.1% 7.6% 13.9x 15.4x 13.1x 13.3x 7.0% 5.4% 11.1x 5.2% 5.3% 5.3% 11.0x 4.5% 8.9x 4.5% 5.5x 2.0% -0.5% 0.0x SBRA CTRE HCP Big 2 LTC NHI OHI SBRA OHI NHI CTRE LTC Big 2 HCP Average 2 Average 2 Pre
Slide 32: Well-Positioned Portfolio
PERFORMANCE WELL-POSITIONED PORTFOLIO SNF CONCENTRATION 1 TOP FIVE RELATIONSHIP SNF RENT COVERAGE 1,3 CONCENTRATION 1 86% 83% 70% 70% 1.73x 1.64x 65% 55% 59% 1.30x 1.34x 1.28x 38% 39% 30% SBRA 2 NHI LTC OHI CTRE SBRA 2 OHI LTC NHI CTRE SBRA 4 LTC OHI NHI CTRE (1) Represents latest available concentr
Slide 33: Appendix
APPENDIX November 7 - 9, 2018 REITWorld 33
Slide 34: 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 35: Forward-Looking Statements
APPENDIX 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 a
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