Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Non-Deal Roadshow (August 2015)
29 slides from Sabra Health Care Reit's roadshow presentation, Aug 11, 2015
Slide 1: Bank of America Merrill Lynch Non-Deal Roadshow
Bank of America Merrill Lynch Non-Deal Roadshow August 11, 2015 Relationship driven. Investor focused.
Slide 2: NMS Portfolio Acquisition
. 2 NMS PORTFOLIO ACQUISITION(1) Key Transaction Terms Size / Structure Cap rate / Yield Term Escalators Credit Enhancement $234.0 million sale / leaseback transaction for 4 skilled nursing/transitional care facilities located in Maryland 8.75% cash lease cap rate and 10.5% GAAP yield 15-year initia
Slide 3: Canadian Portfolio Acquisition
. 3 CANADIAN PORTFOLIO ACQUISITION Key Transaction Terms Size / Structure Cap rate / Yield Term Escalators Credit Enhancement CAD $170.5 million / USD $138.8 million sale / leaseback transaction for 8 independent living facilities and 1 assisted living/independent living facility, with an earn-out p
Slide 4: Strategic Overview
. 4 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 5: Where We Are Today
. 5 WHERE WE ARE TODAY(1) Building a better REIT… but we’re not done yet (1) All results since inception through June 30, 2015 unless otherwise noted. (2) Since first quarter 2011. (3) Through August 5, 2015. (4) Since fourth quarter 2011 through August 5, 2015. (5) Includes all investments through
Slide 6: Sabra's Portfolio by the Numbers
. 6 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 7: The Future of Health Care Delivery
. 7 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 8: Thinking Outside the Box
. 8 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 9: Market Focus
. 9 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 10: Relationships Drive Consistent Deal Flow
. 10 RELATIONSHIPS DRIVE CONSISTENT DEAL FLOW Partnering with growing operators and developers($ in millions) 5 Strategic development partners 45 Total anticipated investments $202.3 Total invested dollars through July 31, 2015 $535.9 Total additional invested dollars anticipated through 2020 $630.8
Slide 11: Target = Investment Grade
. 11 TARGET = INVESTMENT GRADE Main barriers to investment grade rating are size and diversification Sabra (1) “Big 3” (2) Net Debt to Adjusted EBITDA 5.59x 5.46x 5.98x Debt as % of Enterprise Value 40% 33% 41% Interest Coverage Ratio 4.41x 3.95x 5.50x Fixed Charge Coverage Ratio 3.33x 3.13x 4.70x S
Slide 12: Portfolio Performance
Portfolio Performance
Slide 13: Strong Portfolio Performance: Occupancy and Skilled Mix
. 13 STRONG PORTFOLIO PERFORMANCE Portfolio occupancy and SNF portfolio skilled mix 88.2% 87.6% 88.9% 90.4% 37.5% 38.6% 2014 2015 2014 2015 SNF Senior Housing Skilled Mix Occupancy & Skilled Mix Solid skilled mix reflects focus on higher-acuity, short-stay skilled nursing/transitional care facilitie
Slide 14: Skilled Nursing EBITDAR and EBITDARM Coverage
. 14 STRONG PORTFOLIO PERFORMANCE Skilled nursing/transitional care EBITDAR and EBITDARM coverage 1.28x 1.22x 1.64x 1.56x 2014 2015 EBITDAR EBITDARM (1) (1) EBITDAR and EBITDARM coverages include only Stabilized Facilities acquired before the three months ended June 30, 2015 and are only included in
Slide 15: Senior Housing EBITDAR and EBITDARM Coverage
. 15 STRONG PORTFOLIO PERFORMANCE Senior Housing EBITDAR and EBITDARM coverage 1.17x 1.27x 1.37x 1.48x 2014 2015 EBITDAR EBITDARM (1) Secure rental payments from an increasing portion of our portfolio (1) EBITDAR and EBITDARM coverages include only Stabilized Facilities acquired before the three mon
Slide 16: Fixed Charge Coverage
. 16 STRONG PORTFOLIO PERFORMANCE Fixed charge coverage (1) Fixed Charge Coverage is presented one quarter in arrears for tenants with significant corporate guarantees. See Definitions for definition of Fixed Charge Coverage. (for the twelve month periods ended June 30, 2014 and 2015) Tenant Facilit
Slide 17: Financial Overview
Financial Overview
Slide 18: Capitalization and Cost of Capital
. 18 Capitalization and cost of capital $1,693 $699 $142 $149 $273 $116 Common Equity Market Value Senior Notes Mortgage Debt Preferred Equity Market Value Term Loans Revolving Credit Facility Net of Cash (1) (1) Common Equity Market Value and Preferred Equity Market Value are based on closing stock
Slide 19: Financial Results
. 19 FINANCIAL RESULTS Normalized AFFO/share, Normalized FFO/share and dividend/share $1.51 $1.59 $1.77 $2.12 $0.51 $0.54 $0.52 $0.52 $0.53 $1.31 $1.47 $1.84 $2.20 $0.51 $0.57 $0.53 $0.53 $0.56 $0.96 $1.32 $1.36 $1.51 $0.38 $0.39 $0.39 $0.41 $0.41 2011 2012 2013 2014 Q3 2014 Q4 2013 Q1 2015 Q2 2015
Slide 20: Financial Strength: Net Debt to Adjusted EBITDA
. 20 FINANCIAL STRENGTH Historical net debt to adjusted EBITDA 2.19x 2.65x 2.82x 4.48x 4.94x 1.90x 2.11x 1.92x 0.61x 0.65x 4.09x 4.76x 4.74x 5.09x 5.59x 12/31/2011 12/31/2012 12/31/2013 12/31/2014 6/30/2015 Unsecured Leverage Secured Leverage Net Debt to Adjusted EBITDA • Maintaining total leverage
Slide 21: Financial Strength: Interest Coverage
. 21 FINANCIAL STRENGTH Historical LTM interest coverage 3.17x 3.22x 3.85x 4.29x 4.41x 2011 2012 2013 2014 Q2 2015 Weighted average interest rate (2) declined from: 7.24% at December 31, 2011 to 4.53% of as of June 30, 2015 (1) Interest Coverage is calculated in accordance with the indentures relati
Slide 22: Financial Strength: Debt Maturities
. 22 FINANCIAL STRENGTH Debt maturities $1.7 $3.5 $3.6 $3.7 $3.8 $4.0 $20.1 $3.6 $3.7 $3.8 $90.6 $200.0 $72.8 $122.0 $328.0 $500.0 $200.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Thereafter Mortgage Notes Term Loans Credit Facility Outstanding Credit Facility Available Senior Notes Ample li
Slide 23: Appendix
Appendix
Slide 24: Key Credit Statistics
. 24 KEY CREDIT STATISTICS(1) Option One Option Three Ma December 31, 2014 June 30, 2015 Net Debt to Adjusted EBITDA 5.09x 5.59x Interest Coverage 4.29x 4.41x Fixed Charge Coverage Ratio 3.28x 3.33x Total Debt/Asset Value 43% 45% Secured Debt/Asset Value 5% 5% Unencumbered Assets/Unsecured Debt 246%
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 2011 2012 2013 2014 Q3 Q4 Q1 Q2 Pro Forma Q2 Net income attributable to common stockholders $ 12.8 $ 19.5 $ 25.7 $ 36.7 14.6 19.7 $ 16.9 $ 14.3 $ 15.6 Depreciation and amortization of real estate assets 2
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 FINANCIAL 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, FFO per diluted common share, Normalized F
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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