Sabra Health Care Reit, Inc. · NASDAQ:SBRA

Sabra Health Care Reit — Non-Deal Roadshow (March 2012)

27 slides from Sabra Health Care Reit's roadshow presentation, Mar 7, 2012

  1. Slide 1: Jefferies Non-Deal Roadshow Presentation

    JEFFERIES NON-DEAL ROADSHOW PRESENTATION March 7, 2012

  2. Slide 2: Forward Looking Statements

    FORWARD LOOKING STATEMENTS 2 Certain information contained in this presentation includes “forward-looking” statements (as defined in the Private Securities Litigation Reform Act of 1995 and the federal securities law). Forward-looking statements include statements regarding our expectations, beliefs

  3. Slide 3: Non-GAAP Financial Measures

    NON-GAAP FINANCIAL MEASURES 3 This presentation includes the following financial measures defined as non-GAAP financial measures by the SEC: EBITDA, EBITDAR, EBITDARM, funds from operations (“FFO”), adjusted FFO (“AFFO”) and normalized AFFO, FFO per diluted share, AFFO per diluted share and normaliz

  4. Slide 4: Investment Highlights

    4 Company Update and Investment Highlights

  5. Slide 5: Sabra Has Competitive Industry Presence

    SABRA HAS COMPETITIVE INDUSTRY PRESENCE 5  Formed by Opco / Propco split of Sun Healthcare Group  Independently traded as of November 2010 (NASDAQ: SBRA)  Structured as an UPREIT  B+/B2 rating (S&P / Moody’s) – S&P upgrade from B on September 30, 2011  97 health care investments(1)  76 skilled

  6. Slide 6: Opportunity to Be Capital Provider of Choice

    OPPORTUNITY TO BE CAPITAL PROVIDER OF CHOICE  Few capital providers serving the smaller operators  Over 90% of senior housing facilities are owned in portfolios of less than 10 properties(1)  Larger health care REITs have made transformational deals and grown significantly  Limited debt sources

  7. Slide 7: Sabra Capitalizes on Opportunity

    SABRA CAPITALIZES ON OPPORTUNITY 7 Focused Tactics Execution Diversification from original tenant Exposure to diverse property types within health care sector Increased AFFO Lower cost of capital Sale/ leaseback transactions Focus on deals < $100 mm Triple-net lease structure Broad spectrum of prope

  8. Slide 8: Acquisitions Yield Diversification

    ACQUISITIONS YIELD DIVERSIFICATION  Strong acquisition activity since inception with approximately $211.6 million(1) of capital invested through December 31, 2011  6 new operator relationships  11 new assets in 4 new states (9 SNFs, 1 AL and 1 Hospital)  Steady pipeline across spectrum of health

  9. Slide 9: Recent Investment Highlights

    Encore Portfolio (Closed November 1, 2011) - Texas 9  Purchase Price: $14.2mm  Number of Properties: 2  Windcrest Alzheimer’s Care Center  Wesley Woods Alzheimer’s Care Center  Investment Type: Equity  Property Type: SNF  Available Beds: 240 combined  Facility Ages: 7-12 years  Annualized G

  10. Slide 10: Impact of Acquisitions: Revenue by Asset Class

    10 88.6% 4.4% 7.0% As of December 31, 2010 As of December 31, 2011 Acquisitions are changing the revenue makeup of our portfolio (1) Skilled nursing and health care facilities include skilled nursing, multi-license designation and mental health facilities. (2) Senior housing facilities include indep

  11. Slide 11: Impact of Acquisitions: Revenue by Tenant

    11 Sun 100.0% Sun 76.1% Texas Regional Medical Center 7.0% Cadia Portfolio 11.2% Aurora Portfolio 2.4% Other 3.3% As of December 31, 2010 As of December 31, 2011 Acquisitions are changing the revenue makeup of our portfolio Sabra’s Annualized Rental Revenue By Tenant IMPACT OF ACQUISITIONS Future ac

  12. Slide 12: Sabra's Portfolio & Primary Tenant

    12 Sabra’s Portfolio & Primary Tenant

  13. Slide 13: Strong Portfolio Performance

    13 90.1% 88.2% 87.7% 88.2% 87.4% 20% 40% 60% 80% 100% 2009 2010 2011 Q4 2010 Q4 2011 90.0% 88.2% 87.5% 88.2% 87.3% 20% 40% 60% 80% 100% 2009 2010 2011 Q4 2010 Q4 2011 89.0% 87.3% 87.7% 88.1% 88.4% 20% 40% 60% 80% 100% 2009 2010 2011 Q4 2010 Q4 2011 39.2% 39.3% 41.4% 39.0% 39.5% 10% 20% 30% 40% 50% 2

  14. Slide 14: Property Diversification

    PROPERTY DIVERSIFICATION (as of March 1, 2012) 1 1 1 1 3 2 2 1 4 3 1 1 5 2 1 1 2 2 11 2 1 8 5 2 8 3 2 9 1 1 States with existing facilities (Equity investments – 97 total) CCRC (total: 1) Multi-Licensed Designation (total: 10) Mental Health (total: 2) Assisted Living (total: 6) Skilled Nursing (tota

  15. Slide 15: Geographically Diverse Portfolio

    GEOGRAPHICALLY DIVERSE PORTFOLIO New Hampshire Connecticut Kentucky Ohio Florida Texas Montana Delaware Other States 97 equity investments in 23 states $94.6 mm annualized rental revenue 13.8% 12.5% 10.5% 5.5% 8.3% 10.1% 22.6% Properties/ facilities by state 5.5% New Hampshire Connecticut Kentucky O

  16. Slide 16: Lease Structure Summary

    16 LEASE STRUCTURE SUMMARY Triple Net Master lease cross defaulted Maturities Escalators Renewal Options Minimum Cap Ex Purchase Option Guarantee Sun   2020-2025 Lessor of CPI or 2.5% annually (2) 5 yr. renewal options  NO  TRMC  N/A 2034 6.0% every 5 yrs. (2) 5 yr. renewal options Good Repair

  17. Slide 17: Rent Coverage Analysis

    RENT COVERAGE ANALYSIS 17 (1) All coverages calculated one month in arrears. (2) Sun’s Tenant EBITDAR Coverage for the three months and year ending December 31, 2011 was 1.53x and 1.70x respectively. On January 4, 2012, Sun issued a press release announcing its 2012 financial outlook and guidance, i

  18. Slide 18: Primary Tenant Overview

    PRIMARY TENANT OVERVIEW (as of December 31, 2011) States with facilities Number of facilities per state Key Sun portfolio information Number of Centers: 199 Property Type:  Skilled Nursing  Multi-License Designation  Assisted Living  Mental Health  Independent Living 165 (83%) 14 (7%) 10 (5%) 8

  19. Slide 19: Sun Profile and Statistics

    SUN PROFILE AND STATISTICS 19  $117.9 million of liquidity as of December 31, 2011(4)  0.34x Net Debt-to-Adjusted EBITDA ratio(5)  Amended Term Loan covenants to ease interest coverage and leverage covenants (1) For the quarter ended December 31, 2011. (2) Sun defines Adjusted EBITDAR as earnings

  20. Slide 20: Financial Overview

    20 Financial Overview

  21. Slide 21: Financial Policies

    FINANCIAL POLICIES  $0.32 per share paid Q2, Q3 and Q4 of 2011  $0.33 per share announced Q1 2012  Target of 80% AFFO (dividends for Q1, Q2 and Q3 higher due to acquisition timing and increase in shares from equity offering) 21 Dividend Acquisitions and Investments  Continued focus on triple-net

  22. Slide 22: Financial Highlights: Income Statement

    FINANCIAL HIGHLIGHTS 22 Income statement and other data Revenues $ 26.3 $ 26.5 $ 84.2 $ 96.5 G&A costs 4.2 4.2 14.5 14.5 EBITDA 22.1 22.3 69.8 82.2 Net income 7.2 7.3 12.8 21.9 FFO 14.5 14.7 39.4 51.8 AFFO 15.3 15.8 47.2 57.7 Normalized AFFO 13.7 14.2 45.9 56.4 Per share data: Diluted EPS $ 0.19 $ 0

  23. Slide 23: Financial Highlights: Balance Sheet

    FINANCIAL HIGHLIGHTS 23 Balance sheet and other data (as of December 31, 2011) Cash $ 42.3 Real Estate, Gross Book Value 767.1 Real Estate, Asset Value (2) 926.8 Total Debt 383.4 Total Equity 326.6 Capitalization 446.0 Liquidity 142.3 Debt Covenants (3) MAX Actual Incurrence: Total Debt/ Asset Value

  24. Slide 24: FY 2012 Guidance

    FY 2012 GUIDANCE(1) 24 Low High Net income from continuing operations 0.64$ 0.68$ Add: Depreciation and amortization 0.89 0.90 FFO 1.53$ 1.58$ Straight line rent adjustment (0.13) (0.14) Stock based compensation 0.18 0.18 Amortization of deferred financing costs 0.09 0.09 Acquisition pursuit costs 0

  25. Slide 25: Pro Forma Debt Maturity Schedule

    25 $3.2 $3.4 $3.6 $86.0 $1.7 $1.8 $1.9 $2.1 $2.2 $2.4 $49.5 $200.0 $0 $50 $100 $150 $200 $250 Mortgage Notes Revolver Senior Unsecured Notes $225.0 Minimal near-term debt maturities PRO FORMA DEBT MATURITY SCHEDULE Weighted Average Cost of Debt(1): 7.25% (before utilization of revolver) (1) 5.99% we

  26. Slide 26: Geographically Diverse Portfolio Attractive Industry Fundamentals Favorable Long-Term Lease Structure Strong Lease Co…

    26 Geographically Diverse Portfolio Attractive Industry Fundamentals Favorable Long-Term Lease Structure Strong Lease Coverage Strong Asset Coverage Financially Secure Primary Tenant Growth Opportunities Experienced Management Team

  27. Slide 27: Reconciliation of Net Income to EBITDA, FFO, AFFO and Normalized AFFO

    27 Reconciliation of Net Income to EBITDA, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO Actual Pro Forma (1) Net income $ 7.2 $ 7.3 $ 12.8 $ 21.9 Interest expense 7.6 7.6 30.4 30.4 Depreciation and amortization 7.3 7.4 26.6 29.9 EBITDA $ 22.1 $ 22.3 $ 69.8 $

Sabra Health Care REIT — Non-Deal Roadshow (March 2012) on 6ix