Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — REITWorld 2013
29 slides from Sabra Health Care Reit's conference presentation, Nov 12, 2013
Slide 1: REITWorld 2013
REITWorld 2013 November 13-15, 2013
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 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 also include all stat
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: EBITDAR, EBITDARM, funds from operations (“FFO”), Normalized FFO, adjusted FFO (“AFFO”), and Normalized AFFO. These measures may be different than non-GAAP fin
Slide 4: Strategic Overview
Strategic Overview ASABRA
Slide 5: Market Thesis
5 MARKET THESIS • “Big Three” Health Care REITS: Elephant hunters • Smaller operators lack capital Market Conditions Opportunity Health care industry is extremely fragmented Limited capital flowing to local & regional operators Arbitrage between public and private markets Strategy Partner to smaller
Slide 6: Investment Thesis
Observations • Residents are older • Obsolescence factor emerging • New construction must be care ◦ driven Investment Characteristics • Resident-centric facilities • Strategy that can be replicated • Market insights trump name ◦ ◦ ◦ brand Observations • Quality of operator critical • SNFs remain low
Slide 7: Opportunistic Investing
OPPORTUNISTIC INVESTING 7 SNF AL / MC IL Acute Care Hospital Equity Mezzanine Debt Mortgage Debt RIDEA Development Creative approaches to meet operators’ needs
Slide 8: Forest Park Medical Center Investments
• $230.3 million invested in two acute care hospitals • $66.8 million committed to third acute care hospital • Three premier, physician-owned hospitals under the Forest Park Medical Center brand • Developer has additional Forest Park Medical Centers under development and planning FOREST PARK MEDICAL
Slide 9: Forest Park Medical Center – Fort Worth
Forest Park Medical Center – Fort Worth 9 • Acute Care Hospital • 48 inpatient rooms • 6 intensive care unit beds • 12 operating rooms • 2 special procedure suites • Full-service imaging • Associated parking structure • 80,000 square foot medical office building * * * FOREST PARK MEDICAL CENTER INVE
Slide 10: Forest Park Medical Center – Frisco
Forest Park Medical Center – Frisco 10 • Acute Care Hospital • 30 inpatient rooms • 14 family suites • 10 intensive care unit beds • 12 operating rooms • Associated parking structure * * * FOREST PARK MEDICAL CENTER INVESTMENTS * * * • Acquisition Date: October 22, 2013 • Location: Frisco, Texas • I
Slide 11: Forest Park Medical Center – Dallas
Forest Park Medical Center – Dallas 11 • Acute Care Hospital • 72 private beds • 12 intensive care unit beds • 22 operating rooms • Associated parking structure * * * FOREST PARK MEDICAL CENTER INVESTMENTS * * * • Investment Date: October 22, 2013 • Location: Dallas Texas • Investment Type: Mortgage
Slide 12: Impact of Acquisitions: Annualized Revenue by Tenant
12 As of December 31, 2010 Pro forma as of September 30, 2013, 50.5% of total annualized revenue derived from acquisitions Sabra’s Annualized Revenue: By Tenant IMPACT OF ACQUISITIONS $70.2 million $94.6 million As of December 31, 2011 Pro forma (1) As of September 30, 2013 $161.2 million (1) Assume
Slide 13: Impact of Acquisitions: Annualized Revenue by Asset Class
13 Diversifying portfolio across spectrum of health care Sabra’s Annualized Revenue: By Asset Class IMPACT OF ACQUISITIONS As of December 31, 2011 Pro forma (1) As of September, 2013 As of December 31, 2010 (1) Assumes the acquisition of Forest Park Medical Center – Frisco and the originations of th
Slide 14: Existing Relationships Driving Additional Deal Flow
14 * * * * * EXISTING RELATIONSHIPS DRIVING ADDITIONAL DEAL FLOW * * * * * Experienced SNF developers transforming from merchant builder to sustainable business model Dec. 2010: Introduced to Meridian as potential JV partner in SNF development program Mar. 2012: Sabra closes on $10 mm mezzanine loan
Slide 15: Existing Relationships: New Dawn
New Dawn 15 New Dawn Virginia Construction Loans (Closed October 2013) Property Type: Memory Care (two facilities) Location: Henrico and Willamsburg, Virginia Investment Type: Construction Mortgage Investment: $17.1 million Rate of Return: 10.0% Option to Purchase: Upon stabilization, Sa
Slide 16: Existing Relationships: Stoney River
16 * * * * * EXISTING RELATIONSHIPS DRIVING ADDITIONAL DEAL FLOW * * * * * * Sep. 2011: Introduced to Stoney River principals through an equity partner Dec. 2011: Sabra tours Stoney River – Marshfield in Central Wisconsin Aug. 2012: Signed agreement to proceed with development pipeline and RIDEA joi
Slide 17: Financial Overview
Financial Overview ASABRA
Slide 18: Financial Strength
18 FINANCIAL STRENGTH (dollars in millions) $461 $225 $161 As of December 31, 2010 $1,012 $415 $142 $137 Pro forma As of September 30, 2013 Common Equity Market Value Senior Notes Mortgage Debt Preferred Equity Capitalization $847 million $1.7 billion (1) Track record of access to capital markets (1
Slide 19: Financial Results
FINANCIAL RESULTS 19 Normalized AFFO/share & Normalized FFO/share Normalized AFFO/share & dividend/share $0.37 $0.38 $0.42 $0.39 $0.41 $0.43 $0.41 $0.43 $0.53 $0.32 $0.33 $0.33 $0.33 $0.33 $0.34 $0.34 $0.34 $0.34 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 20
Slide 20: Strong Portfolio Performance
20 Historical overall occupancy(1) Historical SNF portfolio skilled mix(1) (2) STRONG PORTFOLIO PERFORMANCE (as of September 30, 2013) 37.3% 36.4% 38.7% 36.8% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% Trailing 3 Months, Q3 2012 Trailing 3 Months, Q3 2013 Trailing 12 Months, Q3 2012 Trailing 12 Month
Slide 21: Tenant Coverage Analysis
21 EBITDAR Coverage (1) EBITDARM Coverage (1) TENANT COVERAGE ANALYSIS (as of September 30, 2013) 1.27x 1.27x 1.33x 1.27x 1.00x 1.10x 1.20x 1.30x 1.40x Trailing 3 months, Q3 2012 Trailing 3 months, Q3 2013 Trailing 12 months, Q3 2012 Trailing 12 months, Q3 2013 (1) EBITDAR Coverage and EBITDARM Cove
Slide 22: Tenant Coverage Analysis
22 EBITDAR Coverage (1) EBITDARM Coverage (1) TENANT COVERAGE ANALYSIS (as of September 30, 2013) 1.27x 1.18x 1.26x 1.17x 1.00x 1.10x 1.20x 1.30x 1.40x 1.50x Trailing 3 months, Q3 2012 Trailing 3 months, Q3 2013 Trailing 12 months, Q3 2012 Trailing 12 months, Q3 2013 (1) EBITDAR Coverage and EBITDAR
Slide 23: Financial Strength
1.76x 1.67x 2.03x 1.53x 2.03x 1.24x 1.84x 1.83x 2.43x 2.50x 2.37x 2.26x 3.15x 2.69x 2.65x 2.61x 2.60x 2.19x 0.00x 0.50x 1.00x 1.50x 2.00x 2.50x 3.00x 3.50x 4.00x 4.50x 5.00x Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 PF Q3 2013 Secured Leverage Unsecured Leverage 4.68x 4.62x FIN
Slide 24: Financial Strength: Pro Forma Debt Maturities
FINANCIAL STRENGTH 24 Pro Forma Debt Maturities (1) (dollars in millions) $0.9 $3.7 $86.1 $1.6 $1.7 $1.7 $1.8 $1.8 $1.9 $1.9 $2.0 $37.1 $131.0 $155.5 $0 $50 $100 $150 $200 $250 $300 $350 $400 Mortgage Notes Revolver Outstanding Revolver Available Senior Notes $200.0 $211.3 Pro forma liquidity of $15
Slide 25: Virtuous Cycle
25 Make accretive investments Diversify from Genesis Diversify payor sources Lower risk Lower cost of capital and enhance competitive position Higher AFFO VIRTUOUS CYCLE
Slide 26: Appendix
Appendix ASABRA
Slide 27: Debt Covenants
DEBT COVENANTS (1) 27 (1) Based on defined terms in the 2018 senior notes indenture and the amended credit agreement. (2) Information assumes investment activity during the quarter ended September 30, 2013, the entry into our new revolving credit facility, the acquisition of Forest Park Medical Cent
Slide 28: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO
28 Reconciliation of Funds from Operations (FFO), Normalized FFO, Adjusted Funds from Operations (AFFO) and Normalized AFFO (1) Information assumes investment activity during the quarter ended September 30, 2013, the entry into our new revolving credit facility, the acquisition of Forest Park Medica
Slide 29: Definitions
DEFINITIONS 29 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 3 and 12 month periods prior to and including the period prese