Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — REIT World NAREIT Annual Convention 2014
28 slides from Sabra Health Care Reit's conference presentation, Nov 4, 2014
Slide 1: REIT World NAREIT Annual Convention
REIT World NAREIT Annual Convention November 5-7, 2014 Atlanta, GA Relationship driven. Investor focused.
Slide 2: Strategic Overview
. 2 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 3: Where We Are Today
. 3 WHERE WE ARE TODAY(1) Building a better REIT… but we’re not done yet (1) All results since inception through September 30, 2014 unless otherwise noted. (2) Since first quarter 2011. (3) Through October 30, 2014. (4) Since fourth quarter 2011 through September 30, 2014 and assumes the financing a
Slide 4: Sabra's Portfolio by the Numbers
. 4 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 5: The Future of Health Care Delivery
. 5 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 6: Thinking Outside the Box
. 6 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 7: Market Focus
. 7 MARKET FOCUS Bigger is not always better • Many opportunities exist outside of largest MSAs in U.S. • Sabra’s acquisitions have been located in markets where, on average, 15% of population is over the age of 65 • Only 13.5% of total U.S. population over the age of 65 • Lower costs to build, coup
Slide 8: Relationships Drive Consistent Deal Flow
. 8 RELATIONSHIPS DRIVE CONSISTENT DEAL FLOW Partnering with growing operators and developers $186.5 $262.9 $223.0 $32.0 $36.6 $90.0 $218.4 $299.5 $313.0 2012 2013 YTD 2014 New Investments Relationship Investments • In 2014, 29% of investments (excluding the Holiday portfolio) have come from existin
Slide 9: Total Investments by Relationship
. 9 TOTAL INVESTMENTS BY RELATIONSHIP ($ in millions) (1) (1) Through October 30, 2014. $26.2 $28.1 $35.7 $288.1 $4.5 $75.2 $22.7 $88.3 $38.4 $89.4 $23.6 $86.1 $48.9 $116.4 $74.1 $377.5 $28.1 $161.3 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 Leo Brown Group First Phoenix New
Slide 10: Target = Investment Grade
. 10 TARGET = INVESTMENT GRADE Main barriers to investment grade rating are size and diversification Sabra (1) “Big 3” (2) Debt to Normalized EBITDA 5.50x 4.90x 5.66x Debt as % of Enterprise Value 44% 31% 34% Interest Coverage Ratio 4.40x 3.52x 4.77x Fixed Charge Coverage Ratio 3.22x 2.78x 4.77x Sec
Slide 11: Portfolio Performance
Portfolio Performance
Slide 12: Strong Portfolio Performance: Occupancy and Skilled Mix
. 12 STRONG PORTFOLIO PERFORMANCE Portfolio Occupancy and SNF portfolio skilled mix 89.0% 88.5% 89.3% 89.9% 37.2% 36.4% 2013 2014 2013 2014 SNF Senior Housing Skilled Mix Occupancy & Skilled Mix Solid skilled mix reflects focus on higher-acuity, short-stay skilled nursing/transitional care facilitie
Slide 13: Skilled Nursing EBITDAR and EBITDARM Coverage
. 13 STRONG PORTFOLIO PERFORMANCE Skilled nursing/transitional care EBITDAR and EBITDARM coverage 1.44x 1.25x 1.88x 1.67x 2013 2014 EBITDAR EBITDARM (1) (1) EBITDAR and EBITDARM coverages are only included in periods subsequent to our acquisition of the facilities for facilities with new tenants/ op
Slide 14: Senior Housing EBITDAR and EBITDARM Coverage
. 14 STRONG PORTFOLIO PERFORMANCE Senior Housing EBITDAR and EBITDARM coverage 1.10x 1.21x 1.30x 1.41x 2013 2014 EBITDAR EBITDARM (1) Secure rental payments from an increasing portion of our portfolio (1) EBITDAR and EBITDARM coverages are only included in periods subsequent to our acquisition of th
Slide 15: Fixed Charge Coverage
. 15 STRONG PORTFOLIO PERFORMANCE Fixed Charge Coverage (1) The percentage of annualized revenue calculation includes the investment activity during the quarter ended September 30, 2014 and through October 30, 2014 . (2) Fixed Charge Coverage is presented one quarter in arrears for tenants with sign
Slide 16: Financial Overview
=——— ——— — | ~ it Li Financial Overview
Slide 17: Capitalization and Cost of Capital
. 17 Capitalization and cost of capital $1,529 $699 $125 $148 $140 $200 Common Equity Market Value Senior Notes Mortgage Debt Preferred Revolving Credit Facility Term Loan (1) (1) Common Equity market value and Preferred Equity market value is based on shares outstanding and closing stock price of $
Slide 18: Financial Results
. 18 FINANCIAL RESULTS Normalized AFFO/share, Normalized FFO/share and Dividend/share $1.51 $1.59 $1.77 $0.53 $0.53 $0.51 $0.56 $1.31 $1.47 $1.84 $0.55 $0.53 $0.51 $0.60 $0.96 $1.32 $1.36 $0.38 $0.38 $0.39 $0.39 2011 2012 2013 Q1 2014 Q2 2014 Q3 2014 Pro forma Q3 2014 Normalized AFFO/share Normalize
Slide 19: Financial Strength: Historical LTM Debt to Adjusted EBITDA
. 19 FINANCIAL STRENGTH Historical LTM Debt to Adjusted EBITDA 2.50x 2.69x 2.75x 4.85x 1.76x 2.02x 1.85x 0.58x 4.26x 4.71x 4.60x 5.43x 12/31/2011 12/31/2012 12/31/2013 Pro forma Q3 2014 Unsecured Leverage Secured Leverage Debt to Adjusted EBITDA Lowering use of secured leverage, a step towards impro
Slide 20: Financial Strength: Historical LTM Interest Coverage
. 20 FINANCIAL STRENGTH Historical LTM Interest Coverage 3.17x 3.22x 3.85x 4.46x 2011 2012 2013 Pro forma Q3 2014 Weighted average interest rate (3) declined from: 7.24% at December 31, 2011 to 4.69% Pro forma as of September 30, 2014(2) (1) Interest Coverage is calculated in accordance with the ind
Slide 21: Financial Strength: Debt Maturities
. 21 FINANCIAL STRENGTH Debt maturities $0.7 $2.8 $2.9 $3.0 $3.1 $3.2 $3.3 $3.4 $3.5 $3.7 $95.0 $200.0 $140.0 $310.0 $500.0 $200.0 Q4 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Thereafter Mortgage Notes Term Loan Credit Facility Outstanding Credit Facility Available Senior Notes Ample liquidi
Slide 22: Appendix
Appendix
Slide 23: Key Credit Statistics
. 23 KEY CREDIT STATISTICS(1) Option One Option Three Ma Pro forma September 30, 2014 (2) September 30, 2014 December 31, 2013 Debt to Adjusted EBITDA 5.43x 6.24x 4.60x Interest Coverage 4.46x 4.46x 3.85x Fixed Charge Coverage Ratio 3.26x 3.16x 2.76x Total Debt/Asset Value 49% 49% 52% Secured Debt/A
Slide 24: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO
. 24 RECONCILIATION OF FFO, NORMALIZED FFO, AFFO and NORMALIZED AFFO Option One Option Three Ma (1) Information assumes that (i) the investment activity during the quarter ended September 30, 2014 and through October 30, 2014, (ii) the financing activity during the quarter ended September 30, 2014,
Slide 25: Forward Looking Statements
. 25 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 26: Non-GAAP Financial Measures
. 26 NON-GAAP FIANANCIAL 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”), and Normalized AFFO. These measures may be different than
Slide 27: Definitions
. 27 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 28: Definitions
. 28 DEFINITIONS Option One Option Three 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 peri
Sabra Health Care REIT — REIT World NAREIT Annual Convention 2014 on 6ix