Sabra Health Care Reit, Inc. · NASDAQ:SBRA

Sabra Health Care Reit — Bank of America Merrill Lynch Real Estate Conference 2017

21 slides from Sabra Health Care Reit's conference presentation, Sep 12, 2017

  1. Slide 1: Bank of America Merrill Lynch Real Estate Conference

    Bank of America Merrill Lynch Real Estate Conference September 12, 2017 Relationship driven. Investor focused.

  2. Slide 2: Merger with CCP Creates a Premier Healthcare REIT

    . 2 Sabra 2Q17 CCP 2Q17 Combined Pro Forma Sabra (3) Enterprise Value ($Bn) (1) $2.9 $3.9 $6.8 Equity Value ($Bn) (1) $1.5 $2.1 $3.6 Investments 203 347 550 Top 5 Tenant Concentration 69% 57% 42% Genesis Concentration 33% 0% 11% Holiday Concentration 16% 0% 6% SNF EBITDAR Coverage (4) 1.56x 1.19x 1.

  3. Slide 3: Why Skilled Nursing Facilities?

    . 3 14.9% 16.9% 20.6% 21.7% 22.1% 23.6% 0% 5% 10% 15% 20% 25% 0 20,000 40,000 60,000 80,000 100,000 120,000 2015 2020 2030 2040 2050 2060 (00 0s) 65+ % of Total WHY SKILLED NURSING FACILITIES? Skilled nursing facilities will remain an integral component of the U.S. continuum of care, leading to attr

  4. Slide 4: Demographics and Spending Drive the Opportunity

    . 4 DEMOGRAPHICS AND SPENDING DRIVE THE OPPORTUNITY (1) MedPAC. (2) RBC Capital Markets research. Skilled Nursing and Transitional Care are shifting towards higher-acuity, short-stay rehab, “step down” units for hospitals Comparison of Per Case Rates (1) Increasing Prevalence of Chronic Disease (2)

  5. Slide 5: High Quality Portfolio of Primarily Skilled Nursing and Senior Housing Assets

    . 5 HIGH QUALITY PORTFOLIO OF PRIMARILY SKILLED NURSING AND SENIOR HOUSING ASSETS

  6. Slide 6: Strong Relationships with Experienced and Talented Operators

    . 6 STRONG RELATIONSHIPS WITH EXPERIENCED AND TALENTED OPERATORS Pro Forma Top 5 Tenant Concentration(1) (1) Pro forma tenant concentration, NOI mix and payor mix based on total cash NOI as of Q2 2017, adjusted for announced Genesis dispositions and $33.5 million rent reduction. Pro Forma NOI Mix (1

  7. Slide 7: Continued Management Focus on Optimizing Portfolio

    . 7 42% 69%69%69% 76% 89% 97% 25% 50% 75% 100% Pro FormaYE 2016YE 2015YE 2014YE 2013YE 2012YE 2011 11% 32%34% 36% 51% 65% 76% 25% 50% 75% 100% Pro FormaYE 2016YE 2015YE 2014YE 2013YE 2012YE 2011 CONTINUED MANAGEMENT FOCUS ON OPTIMIZING PORTFOLIO Genesis Concentration (1) Since the spin-off from Sun

  8. Slide 8: Substantial Value Creation Opportunity for Shareholders

    . 8 82% 69% 53% 36% 42% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% SUBSTANTIAL VALUE CREATION OPPORTUNITY FOR SHAREHOLDERS The CCP merger significantly enhances Sabra's portfolio diversification while maintaining strong SNF rent coverage SNF Concentration (1) SNF Rent Coverage (1,2) Top Five Tenant Conc

  9. Slide 9: Focused Approach Provides a Conduit for Future Growth

    . 9 FOCUSED APPROACH PROVIDES A CONDUIT FOR FUTURE GROWTH Investment Thesis Utilize operating and asset management expertise to identify and capitalize on opportunities Leverage Sabra's existing and new relationships leading to significant external growth opportunities Align with high-quality operat

  10. Slide 10: Significant Cost Savings & Positive Financial Impact

    . 10 SIGNIFICANT COST SAVINGS & POSITIVE FINANCIAL IMPACT (1) G&A metrics are 2Q17 annualized and include stock-based compensation; based on undepreciated book value of total assets; PF SBRA accounts for estimated GAAP G&A synergies of approximately $20mm. G&A Load vs. Peers (G&A % of Gross Assets)

  11. Slide 11: Strengthened Balance Sheet with Lower Leverage and Enhanced Liquidity

    . 11 Equity 53% Unsecured Debt 41% Secured Debt 4% Preferred Equity 2% STRENGTHENED BALANCE SHEET WITH LOWER LEVERAGE AND ENHANCED LIQUIDITY Capital Structure Highlights Pro Forma Capital Structure (% of Total Capitalization) (1)  Investment grade balance sheet  Primarily fixed rate, unsecured bor

  12. Slide 12: Strong Credit Metrics

    . 12 STRONG CREDIT METRICS (1) Based on forecasted pro forma LTM adjusted EBITDA, which includes GAAP G&A synergies, and balance sheet as of 9/30/2017; includes all completed investments, completed sales, and expected sales as of 9/30/2017. Sabra 2Q17 PF Sabra (1) Net Debt to Adjusted EBITDA 5.4x 5.

  13. Slide 13: 2017 - 2018 Outlook

    . 13 2017 - 2018 OUTLOOK(1) 2017 OUTLOOK LOW HIGH FFO $ 1.17 $ 1.21 NFFO $ 2.47 $ 2.51 AFFO $ 2.04 $ 2.08 NAFFO $ 2.29 $ 2.33 2018 OUTLOOK LOW HIGH FFO $ 2.60 $ 2.66 NFFO $ 2.63 $ 2.69 AFFO $ 2.38 $ 2.44 NAFFO $ 2.41 $ 2.47 The 2018 Outlook highlights the positive impact that the CCP merger is expec

  14. Slide 14: Portfolio Repositioning

    . 14 PORTFOLIO REPOSITIONING (1) No significant long-term cash rent impact is expected as we believe we will replace the rent credits through acquisitions using proceeds from the sales. (2) Certain tenants may be impacted by more than one strategy and are counted in each category. (3) Lease Coverage

  15. Slide 15: Future Roadmap

    . 15 FUTURE ROADMAP Integrate the acquired corporate infrastructure into Sabra's platform Execute on synergies Target achieving investment grade rating at transaction close Expand and close on the value-adding pipeline of opportunities Optimize portfolio with select investments and SNF dispositions

  16. Slide 16: Proven Senior Management Team Track Record of Driving Returns

    . 16 PROVEN SENIOR MANAGEMENT TEAM TRACK RECORD OF DRIVING RETURNS Rick Matros Chairman, President & CEO  Rick Matros has served as Sabra’s President and Chief Executive Officer and as a Director since May 2010, and as Chairman of the Board since November 2010. He was also Chairman of the Board of

  17. Slide 17: Appendix

    . 17 APPENDIX

  18. Slide 18: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO

    . 18 RECONCILIATION OF FFO, NORMALIZED FFO, AFFO and NORMALIZED AFFO Option One Option Three Ma (1) Other non-cash adjustments include amortization of debt premiums / discounts and non-cash interest income adjustments. Low High Low High Net income attributable to common stockholders 0.69$ 0.73$ 1.58

  19. Slide 19: Non-GAAP Financial Measures

    . 19 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 attributable to common stockholders (“FFO”), Normalized FFO, Adjusted FFO (“AFFO”) and Normalized AFFO. The

  20. Slide 20: Forward Looking Statements

    . 20 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 pres

  21. Slide 21: Definitions

    . 21 DEFINITIONS Option One Option Three Ma Ancillary Supported Tenants. A tenant, or one of its affiliates, owns an ancillary business that depends on providing services to the residents of the properties leased by the affiliated operating company (Sabra’s tenant) for a meaningful part of the ancil

Sabra Health Care REIT — Bank of America Merrill Lynch Real Estate Conference 2017 on 6ix