Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — REITworld: 2019 Annual Conference
38 slides from Sabra Health Care Reit's conference presentation, Nov 12, 2019
Slide 1: Dedicated to Value Creation
DEDICATED TO VALUE CREATION REITworld: 2019 Annual Conference November 12 – 14, 2019
Slide 2: Poised for Growth
POISED FOR GROWTH Our vast industry knowledge, experienced executive team 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 shareholders. November 12 - 14, 2019 REITworld:
Slide 3: Strategy
STRATEGY “THE STRONG SABRA YOU SEE TODAY IS THE PRODUCT OF CREATIVE AND TIMELY EXECUTION OF OUR STRATEGY.” – Rick Matros, Chief Executive Officer November 12 - 14, 2019 REITworld: 2019 Annual Conference 3
Slide 4: Opportunistically executing our strategy post merger
STRATEGY WE’VE BEEN OPPORTUNISTICALLY EXECUTING OUR STRATEGY POST MERGER, AND IT SHOWS ENTERPRISE VALUE 1 SNF CONCENTRATION 2 OPERATOR RELATIONSHIPS 1 $2.6B vs $7.3B 74% vs 61% 34 vs 69 (1) Pre CCP merger reported as 6/30/2017 compared to 9/30/2019. Includes Sabra’s 49% pro rata share of the debt of
Slide 5: Our post merger strategy: what we promised, what we delivered
STRATEGY OUR POST MERGER STRATEGY—FOCUSED, FORWARD- THINKING AND DELIBERATE WHAT WE PROMISED WHAT WE DELIVERED Fortify Balance Sheet and Improve • Achieved investment-grade ratings on our unsecured notes from Fitch and S&P 1 Access to Capital • Improved fixed charge coverage from 3.16x as of 6/30/17
Slide 6: Building a resilient and agile REIT
STRATEGY BUILDING A RESILIENT AND AGILE REIT Investment . Invest in high-quality, strong-performing senior housing and SNF portfolios . Relationship diversification . Geographic diversification (investments in 44 states and Canada) . Grow private-pay through investments in high-quality managed senio
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 12 - 14, 2019 REITworld: 2019 Annual Conference 7
Slide 8: 2019 Guidance
STRATEGY IN ACTION 2019 GUIDANCE 1 Diluted per share data attributable to common stockholders Net Income $0.24 - $0.32 FFO $2.02 - $2.10 Normalized FFO $1.86 - $1.94 AFFO $2.00 - $2.08 Normalized AFFO $1.81 - $1.89 Annualized dividend per share $1.80 Senior Housing - Managed Portfolio Same Store Cas
Slide 9: Strengthened balance sheet by reducing leverage
STRATEGY IN ACTION STRENGTHENED BALANCE SHEET BY REDUCING LEVERAGE Lowered cost of PERMANENT DEBT by 36 basis points to 3.91% 34 vs 72 Reduced NET DEBT TO ADJUSTED EBITDA ratio (including our unconsolidated joint venture) from 6.12x to 5.70x (1) Includes Sabra’s 49% pro rata share of the debt of its
Slide 10: Significantly improved credit metrics
STRATEGY IN ACTION SIGNIFICANTLY IMPROVED CREDIT METRICS INTEREST COVERAGE FIXED CHARGE COVERAGE TOTAL DEBT/ASSET VALUE + 0.83x to 4.97x + 1.02x to 4.72x IMPROVED 11% DECEMBER 31, 2018 vs SEPTEMBER 30, 2019 November 12 - 14, 2019 REITworld: 2019 Annual Conference 10
Slide 11: Creating operating efficiencies: proprietary information technology system
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 12: 2019 Operator Conference
STRATEGY IN ACTION 2019 OPERATOR CONFERENCE GATHERLEARN SHARE November 12 - 14, 2019 REITworld: 2019 Annual Conference 12
Slide 13: Operator conference testimonial
STRATEGY IN ACTION “THANK YOU FOR THE EXCEPTIONAL CONFERENCE. THE SPEAKERS WERE GREAT, AND I CAME BACK WITH A LOT OF IDEAS THAT WILL IMPROVE OUR REIMBURSEMENT, OPERATIONS AND CULTURE.” - Stephen Silver, Managing Member, Cadia Healthcare November 12 - 14, 2019 REITworld: 2019 Annual Conference 13
Slide 14: 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 12 - 14, 2019 REITworld: 201
Slide 15: 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 16: 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 12 - 14, 2019 REITworld: 2019 Annual Conference 16
Slide 17: Superior returns start with a strong portfolio
PORTFOLIO SUPERIOR RETURNS START WITH A STRONG PORTFOLIO AS OF SEPTEMBER 30, 2019 SNF/TC SH - Leased SH – Managed 2 Hosp/Oth. 82% 86% 89% 72% 634 Investments1 Average Occupancy Percentage 69 39 % Relationships 1 Skilled Mix1 SNF/TC/Hosp/Oth. SH - Leased 8 2.01x 1.25x Years Wtd. Avg. Remaining Rent C
Slide 18: 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 25 $294M EXPECTED REAL EXPECTED INITIAL CASH ESTATE VALUE 1 YIELD ON RENTS $483M 7.5% (1) Represents the value of completed projects at Sabra’
Slide 19: Effective asset management and strong operator relationships
PORTFOLIO EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Senior Housing Managed 17% Asset Mix 1 Crafted portfolio of high- Senior Housing quality and diverse Leased facilities passionate about 10% care. Specialty Hospitals Skilled Nursing / and Other Transitional Care 10% 61% Interest
Slide 20: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE November 12 - 14, 2019 REITworld: 2019 Annual Conference 20
Slide 21: Operators driven by passion for quality of care
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 12 - 14, 2019 REITworl
Slide 22: We support our operators
OPERATORS WE SUPPORT OUR OPERATORS We Invest in Our Mutual Success: . Redevelopment . Expansion . Strategic development . Flexible equity and debt capital solutions November 12 - 14, 2019 REITworld: 2019 Annual Conference 22
Slide 23: Strategy in Action: Operators
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 24: Free access to industry-leading business intelligence tools
OPERATORS DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS November 12 - 14, 2019 REITworld: 2019 Annual Conference 24
Slide 25: PointRight program for SNF tenants
OPERATORS POINTRIGHT PROGRAM FOR SNF TENANTS Data Integrity Audit Real-time MDS verification analyzes the accuracy of the Minimum Data Set (MDS) assessment prior to CMS submission. Each MDS is checked for logical and clinical coding accuracy, with recommended actions when inaccurate, incomplete, or
Slide 26: Diverse operator base, passionate about care
OPERATORS DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE Relationship Concentration 1 Enlivant 10% Avamere By diversifying our tenant 8% concentration, we’ve curated a portfolio North American equipped to perform in 7% today’s dynamic health care market. Signature Healthcare 7% Other 61% Cadia 7% (1)
Slide 27: Leadership
LEADERSHIP “WHEN WE PUT OUR MINDS TO SOMETHING, WE GET IT DONE.” – Rick Matros, Chief Executive Officer November 12 - 14, 2019 REITworld: 2019 Annual Conference 27
Slide 28: Our approach is as unique as our leadership team
OUR 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 . Lean organizational structure Chief Executive Officer Talya Nevo-Hacohen Chief Investment Officer November 1
Slide 29: Performance
PERFORMANCE “WE CONSISTENTLY DELIVER VALUE TO OUR STOCKHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” – Harold Andrews, Jr., Chief Financial Officer November 12 - 14, 2019 REITworld: 2019 Annual Conference 29
Slide 30: Fortified balance sheet with focus on lowering leverage and enhancing liquidity
PERFORMANCE FORTIFIED BALANCE SHEET WITH FOCUS ON LOWERING LEVERAGE AND ENHANCING LIQUIDITY . Investment-grade balance sheet 1: BBB- / BBB- / Ba1 . Primarily fixed rate (77.4%), unsecured borrowings 2 . Cost of permanent debt is 3.91% 3 . Well-laddered maturity schedule . More than $820 million of a
Slide 31: Balanced capital structure
PERFORMANCE BALANCED CAPITAL STRUCTURE Capital Structure 1 Our diverse menu of capital Common Equity Value options ensures that we 60% have ready access to low- Unsecured Debt cost capital to fund our 33% growth. ENTERPRISE VALUE Our Credit Facility, which includes a $1.0 billion Revolving Credit Fa
Slide 32: Strong investment grade credit metrics
PERFORMANCE STRONG INVESTMENT GRADE CREDIT METRICS 1 SABRA 3Q19 INVESTMENT GRADE 2 PEERS MEDIAN LTM Net Debt to Adjusted EBITDA 5.25x 3 5.86x LTM Net Debt to Adjusted EBITDA - Incl. Unconsolidated Joint 5.70x 3 5.88x Venture Interest Coverage Ratio 4.97x 4.19x Debt as a % of Asset Value 38% 41% Secu
Slide 33: Favorable profile with staggered maturities
PERFORMANCE FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE AT DECEMBER 31, 2018 (dollars in millions) $1,600 $1,156 $1,400 376 $1,200 $1,001 $1,000 Available Line of Credit $800 624 Line of Credit $585 $600 18 Mortgage Debt / Secured Debt 81 13 992 $400 Sabra's Share of Uncons. JV
Slide 34: Attractive relative valuation
PERFORMANCE ATTRACTIVE RELATIVE VALUATION 2019 FFO Multiples 1 Dividend Yield 10.0% 22.0x 19.0x 8.0% 17.7x 8.0% 15.6x 15.8x 6.5% 16.5x 14.7x 14.8x 6.0% 5.2% 4.7% 4.8% 12.0x 4.2% 4.4% 11.0x 4.0% 5.5x 2.0% 0.0% 0.0x SBRA CTRE PEAK Big 2 LTC NHI OHI SBRA OHI NHI LTC CTRE Big 2 PEAK 2 Average Average2 3
Slide 35: Well-positioned portfolio
PERFORMANCE WELL-POSITIONED PORTFOLIO SNF CONCENTRATION 1 TOP FIVE RELATIONSHIP SNF RENT COVERAGE 1,3 CONCENTRATION 1 82% 2.80x 68% 67% 2.37x 61% 54% 58% 1.83x 1.73x 1.66x 39% 37% 27% 2 2 4 SBRA NHI LTC OHI SBRA OHI LTC CTRE NHI SBRA OHI LTC CTRE NHI (1) Represents latest available concentration and
Slide 36: Appendix
APPENDIX November 12 - 14, 2019 REITworld: 2019 Annual Conference 36
Slide 37: 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 38: 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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