Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — 2019 Wells Fargo Real Estate Forum
37 slides from Sabra Health Care Reit's conference presentation, Feb 27, 2019
Slide 1: Dedicated to Value Creation
DEDICATED TO VALUE CREATION 2019 Wells Fargo Real Estate Forum February 27, 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. February 27, 2019 2019 Wells Fargo
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 February 27, 2019 2019 Wells Fargo Real Estate Forum 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 $7.0B 74% vs 60% 34 vs 70 (1) Pre CCP merger reported as 6/30/2017 compared to 12/31/2018. Includes Sabra’s 49% pro rata share of the debt o
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 Access to Capital • Improved fixed charge coverage from 3.16x as of 6/30/17 t
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 February 27, 2019 2019 Wells Fargo Real Estate Forum 7
Slide 8: 2019 Guidance
STRATEGY IN ACTION 2019 GUIDANCE 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 Cash
Slide 9: Senior Care Centers planned disposition update
STRATEGY IN ACTION DELIVERING ON OUR PROMISE SENIOR CARE CENTERS (“SCC”) PLANNED DISPOSITION UPDATE: . SCC filed a petition for relief under Chapter 11 of the United States Bankruptcy Code in the Northern District of Texas on December 4, 2018. Filing not expected to have a substantive impact on the
Slide 10: Holiday portfolio update
STRATEGY IN ACTION SECURING FUTURE SUCCESS HOLIDAY PORTFOLIO UPDATE: . On December 19, 2018, we entered into a non-binding letter of intent to terminate the triple net master lease with respect to all 21 communities leased to Holiday and concurrently enter into one or more management agreements with
Slide 11: Genesis sales roadmap
STRATEGY IN ACTION GENESIS SALES ROADMAP LEASED ANNUAL CASH REMAINING RENT AS A % OF (dollars in millions) FACILITIES RENT PRO FORMA NOI Current Status 11 $ 23.5 4.5% Expected Sales in 2019 (3) (2.7) (under purchase contract) Post Sales Status 1 8 $ 20.8 4.0% ESTIMATED PROCEEDS FROM SALE OF 3 FACILI
Slide 12: 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 13: 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 February 27, 2019 2019 Wells Fargo Re
Slide 14: 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 15: 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 February 27, 2019 2019 Wells Fargo Real Estate Forum 15
Slide 16: Superior returns start with a strong portfolio
PORTFOLIO SUPERIOR RETURNS START WITH A STRONG PORTFOLIO 83%SNF/TC 87%SH - Leased SH92% – Managed 2 90%Hosp/Oth. 674 Investments1 Average Occupancy Percentage 70 39% Relationships 1 Skilled Mix1 9 1.28xSNF/TC 1.06xSH - Leased 2.94xHosp/Oth. Years Wtd. Avg. Remaining Rent Coverage1 Lease Term1 (1) As
Slide 17: 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 27 $301M EXPECTED REAL EXPECTED INITIAL CASH ESTATE VALUE 1 YIELD ON RENTS $501M 7.4% (1) Represents the value of completed projects at Sabra’
Slide 18: Effective asset management and strong operator relationships
PORTFOLIO EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Senior Housing Leased 17% Asset Mix 1 Crafted portfolio of high- Senior Housing quality and diverse Managed facilities passionate about 11% care. Skilled Nursing / Specialty Hospitals Transitional Care and Other 60% 10% Interest
Slide 19: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE February 27, 2019 2019 Wells Fargo Real Estate Forum 19
Slide 20: Operators
OPERATORS “SABRA PROVIDES MORE THAN JUST CAPITAL; IT IS A PARTNER IN OUR SUCCESS BY PROVIDING INDUSTRY METRIC INTELLIGENCE, PURCHASING LEVERAGE AND AN IMPORTANT HEALTH CARE PERSPECTIVE.” – Stephen Silver, Managing Member, Cadia Healthcare February 27, 2019 2019 Wells Fargo Real Estate Forum 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 February 27, 2019 2019 Wells Fa
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 February 27, 2019 2019 Wells Fargo Real Estate Forum 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 business intelligence tools
OPERATORS DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS February 27, 2019 2019 Wells Fargo Real Estate Forum 24
Slide 25: Diverse operator base, passionate about care
OPERATORS DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE Relationship Concentration 1 Enlivant 9% Avamere By diversifying our tenant 8% concentration, we’ve curated a portfolio Signature 7% equipped to perform in today’s dynamic health North American care market. 7% Other 62% Holiday 7% (1) Based on P
Slide 26: Leadership
LEADERSHIP “WHEN WE PUT OUR MINDS TO SOMETHING, WE GET IT DONE.” – Rick Matros, Chief Executive Officer February 27, 2019 2019 Wells Fargo Real Estate Forum 26
Slide 27: 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 February 2
Slide 28: Performance
PERFORMANCE “WE CONSISTENTLY DELIVER VALUE TO OUR STOCKHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” – Harold Andrews, Jr., Chief Financial Officer February 27, 2019 2019 Wells Fargo Real Estate Forum 28
Slide 29: Fortified balance sheet
PERFORMANCE FORTIFIED BALANCE SHEET WITH FOCUS ON LOWERING LEVERAGE AND ENHANCING LIQUIDITY . Investment-grade balance sheet 1: BBB- / BBB- / Ba1 . Primarily fixed rate (78.8%), unsecured borrowings 2,3 . Cost of permanent debt is 4.28% 4 . Well-laddered maturity schedule . More than $400 million of
Slide 30: Balanced capital structure
PERFORMANCE BALANCED CAPITAL STRUCTURE Capital Structure 1 Common Equity Value Our diverse menu of capital 50% options ensures that we have ready access to low- cost capital to fund our Unsecured Debt growth. 43% ENTERPRISE VALUE Our Credit Facility which includes a $1.0 billion Revolving Credit Fac
Slide 31: Strong investment grade credit metrics
PERFORMANCE STRONG INVESTMENT GRADE CREDIT METRICS SABRA PRO INVESTMENT GRADE FORMA 4Q18 PEERS MEDIAN 1 Net Debt to Adjusted EBITDA 5.66x 2 5.58x Net Debt to Adjusted EBITDA – 6.12x 2 5.40x Incl. Unconsolidated Joint Venture Interest Coverage Ratio 4.14x 4.19x Debt as a % of Asset Value 49% 41% Secu
Slide 32: Favorable profile with staggered maturities
PERFORMANCE FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE 1 (dollars in millions) $1,600 $1,156 $1,400 376 $1,200 $1,001 $1,000 624 $800 $585 $600 13 81 18 992 $400 2 $210 $207 500 $192 500 $174 $200 3 70 $72 200 200 $10 189 $3 100 $0 72 2019 2020 2021 2022 2023 2024 2025 2026 20
Slide 33: Attractive relative valuation
PERFORMANCE ATTRACTIVE RELATIVE VALUATION 2019 FFO Multiples 1 Dividend Yield 22.0x 12.0% 17.9x 16.8x 17.4x 9.5% 9.2% 16.5x 14.8x 15.0x 7.3% 11.7x 7.0% 4.9% 4.9% 11.0x 9.7x 4.7% 4.8% 4.5% 3.6% 5.5x 2.0% -0.5% 0.0x SBRA CTRE HCP Big 2 LTC NHI OHI SBRA OHI NHI LTC CTRE Big 2 HCP 2 Average Average 2 Pr
Slide 34: Well-positioned portfolio
PERFORMANCE WELL-POSITIONED PORTFOLIO SNF CONCENTRATION 1 TOP FIVE RELATIONSHIP SNF RENT COVERAGE 1,3 CONCENTRATION 1 70% 86% 68% 2.58x 82% 2.30x 55% 60% 59% 1.76x 1.78x 1.67x 39% 38% 30% SBRA 2 NHI LTC OHI CTRE SBRA 2 OHI LTC CTRE NHI SBRA 4 OHI LTC CTRE NHI (1) Represents latest available concentr
Slide 35: Appendix
APPENDIX February 27, 2019 2019 Wells Fargo Real Estate Forum 35
Slide 36: 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 37: 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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