Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — REIT Week 2012
25 slides from Sabra Health Care Reit's conference presentation, Jun 11, 2012
Slide 1: REIT Week 2012 Company Presentation
REIT WEEK 2012 COMPANY PRESENTATION June 12-14, 2012
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 This presentation contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified, without limitation, by the use of “expects,” “believes,” “intends,” “should” or comparable terms or the negativ
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
Slide 4: Strategic Overview
Strategic Overview ASABRA
Slide 5: Focused Strategy Brings Results
5 FOCUSED STRATEGY BRINGS RESULTS • Capital provider of choice • High quality operators and developers • Regional and local operator focus Strategy • Deals < $100mm • Senior housing/ post- acute/ SNF deals • Long-term, triple-net leases • RIDEA • Development Tactics • Broader tenant base • Portfolio
Slide 6: Deploying Capital Selectively
6 0 1 2 3 4 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 N u m b er of P ro p ert ies P er T ra n sa ct io n $21.8mm $5.7mm DEPLOYING CAPITAL SELECTIVELY $5.3mm(1) $62.7mm $11.3mm $97.5mm $16.2mm $14.2mm $29.9mm $2.6mm $10.0mm(2) Senior Housing Skilled Nursing/ Post-Acute Care Hospital (1) On Dec
Slide 7: Acquisitions: Tenant Diversification Through Growth
7 Sun 100.0% Sun 72.6% Texas Regional Medical Center 6.6% Cadia Portfolio 10.7% Aurora Portfolio 2.2% Pennsylvania Subacute Portfolio 3.4% Other 4.5% As of December 31, 2010 As of March 31, 2012 Acquisitions: tenant diversification through growth Sabra’s Annualized Revenue By Source IMPACT OF ACQUIS
Slide 8: Opportunistic Investing
OPPORTUNISTIC INVESTING 8 SNF ALF ILF Acute Hospital Equity Mezzanine Debt Mortgage Debt RIDEA Development Creative approaches to meet operators’ needs
Slide 9: Growing Strong Tenant Relationships
9 GROWING STRONG TENANT RELATIONSHIPS Region Public or private Asset focus Cadia NE Private SNF, Memory Care Aurora NE Private SNF Meridian(1) SW Private SNF (1) Sabra currently has a mezzanine loan with Meridian, with an option to purchase three skilled nursing facilities and one assisted living fa
Slide 10: Accretive Investments Lead to Increasing Stockholder Value
10 ACCRETIVE INVESTMENTS LEAD TO INCREASING STOCKHOLDER VALUE $0.35 $0.40 $0.38 $0.41 $0.38 $0.41 $0.32 $0.32 $0.32 $0.33 $0.33 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Pro Forma Q1 2012 AFFO/share Dividend/share AFFO/share & Dividend/share
Slide 11: Sabra's Portfolio
11 Sabra’s Portfolio
Slide 12: Current Portfolio
CURRENT PORTFOLIO (as of March 31, 2012) 1 3 3 2 2 4 4 5 2 1 1 2 13 2 1 8 2 13 3 2 10 States with existing facilities (total: 99 equity & 1 mezzanine loan) Senior Housing (total: 9) Skilled Nursing/ Post-Acute (total: 89) Key real estate portfolio information Equity Investments Skilled Nursing/Pos
Slide 13: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION New Hampshire Connecticut Kentucky Ohio Florida Texas Montana Delaware Other States 100 investments in 24 states $99.1 mm annualized revenue 13.1% 11.9% 10.0% 5.3% 7.9% 10.7% 25.1% Number of assets by state 5.3% New Hampshire Connecticut Kentucky Ohio Florida Texas Montana
Slide 14: Rent Coverage Analysis
RENT COVERAGE ANALYSIS 14 (1) All coverages are calculated one month in arrears. (2) Sun’s Tenant EBITDAR Coverage for the three months and twelve months ending March 31, 2012 was 1.32x and 1.61x, respectively. On January 4, 2012, Sun issued a press release announcing its 2012 financial outlook and
Slide 15: Strong Portfolio Performance
15 Consolidated Tenant EBITDAR coverage(1) Historical overall occupancy Historical SNF portfolio skilled mix(2) STRONG PORTFOLIO PERFORMANCE (as of March 31, 2012) 1.78x 1.70x 1.60x 0.00x 0.50x 1.00x 1.50x 2.00x FY 2011 Q1 2011 Q1 2012 41.4% 40.9% 38.4% 35.0% 37.0% 39.0% 41.0% 43.0% 45.0% FY 2011 Q1
Slide 16: Financial Overview
16 Financial Overview
Slide 17: Financing Highlights
FINANCING HIGHLIGHTS 17 Proven track record of access to capital to fund growth Moody’s increased credit rating from B2 to B1 (stable) (April 2012) Amended mortgage indebtedness of $58.9 million reducing pricing by 50 bps (May 2012) Credit facility amended to expand to $200 million (plus $150 millio
Slide 18: Financial Results: FFO / Normalized AFFO
FINANCIAL RESULTS 18 FFO/ Normalized AFFO(1) (dollars in millions, except per share data) $7.3 $8.4 $9.2 $12.9 $11.7 $13.2 $- $4.0 $8.0 $12.0 $16.0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Pro Forma Q1 2012 FFO Normalized AFFO $9.4 $10.3 $12.5 $14.0 $13.7 $15.2 (1) FFO for Q4 2011 excludes the repaym
Slide 19: Financial Results: Revenue and G&A Expenses
FINANCIAL RESULTS 19 Revenue(1) Leveraging G&A expenses $17.6 $17.6 $17.6 $17.7 $18.0 $18.0 $1.2 $3.9 $8.6 $5.7 $7.6 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Pro Forma Q1 2012 Sun Other Sources $1.2 $1.4 $1.3 $1.1 $1.6 $1.6 $0.3 $1.4 $1.1 $1.3 $0.8 $1.4 $2.2 $2.2
Slide 20: Financial Strength
FINANCIAL STRENGTH 20 Consolidated Debt to EBITDA Interest coverage Debt maturities Capital structure(1) 2.49x 2.18x 1.85x 1.76x 1.67x 1.99x 3.47x 3.07x 2.60x 2.50x 2.37x 2.29x 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x 7.00x Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Pro Forma Q1 2012 Secured Leverage
Slide 21: Capital Structure Poised for Growth
CAPITAL STRUCTURE POISED FOR GROWTH $200 million revolver ($162.5 available as of June 11, 2012) Low leverage provides capital structure flexibility Accordion feature on revolver of $150 million High yield market (add on or new issue) Opportunistically access equity markets Common or pre
Slide 22: FY 2012 Guidance
FY 2012 GUIDANCE(1) 22 Low High Net income from continuing operations 0.64$ 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
Slide 23: Virtuous Cycle
23 Make accretive investments Diversify from Sun Diversify payor sources Lower risk Lower cost of capital and enhance competitive position Higher AFFO VIRTUOUS CYCLE
Slide 24: Appendix
24 Appendix
Slide 25: Reconciliation of Net Income to EBITDA, FFO, AFFO and Normalized AFFO
25 Reconciliation of Net Income to EBITDA, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO Q1 Q2 Q3 Q4 Actual Pro Forma (1) Net income $ 1.2 $ 2.1 $ 2.3 $ 7.2 $ 4.4 $ 5.5 Interest expense 7.6 7.5 7.7 7.6 7.7 8.0 Depreciation and amortization 6.1 6.3 6.9 7.3 7.3