Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — 2015 Stifel Senior Housing and Healthcare Real Estate Conference
29 slides from Sabra Health Care Reit's conference presentation, Jan 26, 2015
Slide 1: 2015 Stifel Senior Housing and Healthcare Real Estate Conference
2015 Stifel Senior Housing and Healthcare Real Estate Conference January 27, 2015 Relationship driven. Investor focused.
Slide 2: Strategic Overview
. 2 STRATEGIC OVERVIEW Multiple avenues to increase shareholder returns Create a diversified portfolio that is well positioned for the future of health care delivery Leverage Sabra’s operating expertise to develop strategic relationships with local & regional operators Improve Sabra’s cost of capita
Slide 3: Where We Are Today
. 3 WHERE WE ARE TODAY(1) Building a better REIT… but we’re not done yet (1) All results since inception through September 30, 2014 unless otherwise noted. (2) Since first quarter 2011. (3) Through January 21, 2015. (4) Since fourth quarter 2011. Information assumes that all material investment, dis
Slide 4: Sabra's Portfolio by the Numbers
. 4 SABRA’S PORTFOLIO BY THE NUMBERS Revenue diversification is the name of the game Skilled nursing/ transitional care Genesis 1) Includes revenues from all investment activity through May 27, 2014 Private pay sources (1) (1) Non-private pay revenues for tenants and borrowers consist of revenues fr
Slide 5: The Future of Health Care Delivery
. 5 THE FUTURE OF HEALTH CARE DELIVERY The times they are a changing Skilled Nursing/ Transitional Care Long term care Higher-acuity, short-stay rehab, “step down” units for hospitals Senior Housing Developed by multi-family developers for self-sufficient residents Needs-based model, residents with
Slide 6: Thinking Outside the Box
. 6 Traditional REIT structures - Sale/leasebacks -Mortgage debt THINKING OUTSIDE THE BOX Deal structure flexibility drives competitive advantage Smaller investments with options to purchase RIDEA compliant structures Preferred equity & mezzanine debt Development agreements
Slide 7: Market Focus
. 7 MARKET FOCUS Bigger is not always better • Many opportunities exist outside of largest MSAs in U.S. • The percentage of the population over the age of 65 is greater in the markets where Sabra has invested than in the U.S. as a whole • Lower costs to build, coupled with favorable demographics and
Slide 8: Relationships Drive Consistent Deal Flow
. 8 RELATIONSHIPS DRIVE CONSISTENT DEAL FLOW Partnering with growing operators and developers $186.5 $262.9 $223.0 $32.0 $36.6 $90.0 $218.4 $299.5 $313.0 2012 2013 YTD 2014 New Investments Relationship Investments • In 2014, 29% of investments (excluding the Holiday portfolio) have come from existin
Slide 9: Total Investments by Relationship
. 9 TOTAL INVESTMENTS BY RELATIONSHIP ($ in millions) (1) (1) Includes all material investments in these relationships through January 21, 2015 $26.2 $28.1 $35.7 $288.1 $4.5 $75.2 $22.7 $88.3 $38.4 $89.4 $23.6 $86.1 $48.9 $116.4 $74.1 $377.5 $28.1 $161.3 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0
Slide 10: Target = Investment Grade
. 10 TARGET = INVESTMENT GRADE Main barriers to investment grade rating are size and diversification Sabra (1) “Big 3” (2) Net Debt to Adjusted EBITDA 5.10x 4.93x 5.80x Debt as % of Enterprise Value 40% 32% 36% Interest Coverage Ratio 4.40x 3.58x 4.40x Fixed Charge Coverage Ratio 3.34x 2.84x 4.40x S
Slide 11: Portfolio Performance
Portfolio Performance
Slide 12: Strong Portfolio Performance: Occupancy and Skilled Mix
. 12 STRONG PORTFOLIO PERFORMANCE Portfolio occupancy and SNF portfolio skilled mix 88.7% 88.5% 89.3% 89.9% 38.0% 37.2% 2013 2014 2013 2014 SNF Senior Housing Skilled Mix Occupancy & Skilled Mix Solid skilled mix reflects focus on higher-acuity, short-stay skilled nursing/transitional care facilitie
Slide 13: Skilled Nursing EBITDAR and EBITDARM Coverage
. 13 STRONG PORTFOLIO PERFORMANCE Skilled nursing/transitional care EBITDAR and EBITDARM coverage 1.41x 1.23x 1.81x 1.61x 2013 2014 EBITDAR EBITDARM (2) (1) Information assumes that all material investment and disposition activity subsequent to September 30, 2014 was completed as of September 30, 20
Slide 14: Senior Housing EBITDAR and EBITDARM Coverage
. 14 STRONG PORTFOLIO PERFORMANCE Senior Housing EBITDAR and EBITDARM coverage 1.10x 1.21x 1.30x 1.41x 2013 2014 EBITDAR EBITDARM (2) Secure rental payments from an increasing portion of our portfolio (1) Information assumes that all material investment and disposition activity subsequent to Septemb
Slide 15: Strong Portfolio Performance: Fixed Charge Coverage
. 15 STRONG PORTFOLIO PERFORMANCE Fixed Charge Coverage (1) Information assumes that all material investment and disposition activity subsequent to September 30, 2014 was completed as of September 30, 2014. (2) Fixed Charge Coverage is presented one quarter in arrears for tenants with significant co
Slide 16: Financial Overview
=——— ——— — | ~ it Li Financial Overview
Slide 17: Capitalization and Cost of Capital
. 17 Capitalization and cost of capital $1,947 $699 $125 $155 $200 Common Equity Market Value Senior Notes Mortgage Debt Preferred Equity Revolving Credit Facility Term Loan (1) (2) (1) Common Equity market value and Preferred Equity market value is based on September 30, 2014 pro forma shares outst
Slide 18: Financial Results
. 18 FINANCIAL RESULTS Normalized AFFO/share, Normalized FFO/share and Dividend/share $1.51 $1.59 $1.77 $0.53 $0.53 $0.51 $0.52 $1.31 $1.47 $1.84 $0.55 $0.53 $0.51 $0.55 $0.96 $1.32 $1.36 $0.38 $0.38 $0.39 $0.39 2011 2012 2013 Q1 2014 Q2 2014 Q3 2014 Pro forma Q3 2014 Normalized AFFO/share Normalize
Slide 19: Financial Strength: Net Debt to Adjusted EBITDA
. 19 FINANCIAL STRENGTH Historical Net Debt to Adjusted EBITDA 2.19x 2.65x 2.82x 4.49x 1.9x 2.11x 1.92x 0.61x 4.09x 4.76x 4.74x 5.10x 12/31/2011 12/31/2012 12/31/2013 Pro forma Q3 2014 Unsecured Leverage Secured Leverage Net Debt to Adjusted EBITDA Lowering use of secured leverage, a step towards im
Slide 20: Financial Strength: Historical LTM Interest Coverage
. 20 FINANCIAL STRENGTH Historical LTM Interest Coverage 3.17x 3.22x 3.85x 4.40x 2011 2012 2013 Pro forma Q3 2014 Weighted average interest rate (3) declined from: 7.24% at December 31, 2011 to 4.69% Pro forma as of September 30, 2014(2) (1) Interest Coverage is calculated in accordance with the ind
Slide 21: Financial Strength: Debt Maturities
. 21 FINANCIAL STRENGTH(1) Debt maturities $0.7 $2.8 $2.9 $3.0 $3.1 $3.2 $3.3 $3.4 $3.5 $3.7 $95.0 $200.0 $450.0 $500.0 $200.0 Q4 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Thereafter Mortgage Notes Term Loan Credit Facility Outstanding Credit Facility Available Senior Notes Ample liquidity o
Slide 22: 2015 Guidance
. 22 2015 GUIDANCE Low High Net income attributable to common stockholders $1.19 $1.24 Add: Depreciation and amortization 1.00 1.00 FFO $2.19 $2.24 Straight-line rental income adjustments (0.37) (0.37) Stock-based compensation expense 0.14 0.14 Amortization of deferred financing costs 0.08 0.08 Acqu
Slide 23: Appendix
Appendix
Slide 24: Key Credit Statistics
. 24 KEY CREDIT STATISTICS(1) Option One Option Three Ma Pro forma September 30, 2014 (2) September 30, 2014 December 31, 2013 Net Debt to Adjusted EBITDA 5.10x 6.35x 4.74x Interest Coverage 4.40x 4.46x 3.85x Fixed Charge Coverage Ratio 3.34x 3.16x 2.76x Total Debt/Asset Value 43% 49% 52% Secured De
Slide 25: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO
. 25 RECONCILIATION OF FFO, NORMALIZED FFO, AFFO and NORMALIZED AFFO Option One Option Three Ma (1) Information assumes that all material investment, disposition and financing activity subsequent to September 30, 2014 was completed as of September 30, 2014. 2011 2012 2013 Net income (loss) attributa
Slide 26: Forward Looking Statements
. 26 FORWARD LOOKING STATEMENTS Option One Option Three Ma 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 pre
Slide 27: Non-GAAP Financial Measures
. 27 NON-GAAP FIANANCIAL MEASURES Option One Option Three Ma This presentation includes the following financial measures defined as non-GAAP financial measures by the SEC: funds from operations (“FFO”), Normalized FFO, adjusted FFO (“AFFO”), Normalized AFFO and Adjusted EBITDA (defined below). These
Slide 28: Definitions
. 28 DEFINITIONS Option One Option Three Ma Acute Care Hospital. A facility designed to provide extended medical and rehabilitation care for patients who are clinically complex and have multiple acute or chronic conditions. EBITDAR Coverage. EBITDAR for the trailing 12 month periods prior to and inc
Slide 29: Definitions
. 29 DEFINITIONS Option One Ma 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
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