Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — REITWeek 2013
25 slides from Sabra Health Care Reit's conference presentation, Jun 5, 2013
Slide 1: REITWeek 2013
HEALTH CARE REIT, ING. REITWeek 2013 June 5-7, 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: Focus on needs-driven facilities
INVESTMENT THESIS 6 Focus on needs-driven facilities Observations • Quality of operator critical • SNFs remain low-cost option for ◦ ◦ care • Not all operators are “mom & pop” • Building age less important Investment Characteristics • Quality of care • Market location • Relationship with referral so
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: Impact of Acquisitions: Annualized Revenue by Tenant
8 As of December 31, 2010 As of March 31, 2013, 36.8% 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 As of March 31, 2013 $128.9 million
Slide 9: Diversifying portfolio across spectrum of health care
9 Diversifying portfolio across spectrum of health care Sabra’s Annualized Revenue: By Asset Class IMPACT OF ACQUISITIONS As of December 31, 2011 As of March 31, 2013 As of December 31, 2010
Slide 10: Acquisition Case Study: Meridian
10 Crafting solutions: Building relationships * * * * * ACQUISITION CASE STUDY: MERIDIAN * * * * * 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
Slide 11: Acquisition Case Study: Stoney River
11 * Sabra grows as partnerships flourish * * * * ACQUISITION CASE STUDY: STONEY RIVER * * * * * * 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
Slide 12: Acquisition Case Study: New Dawn
12 * Partnering to create next generation of memory care facilities * * * * ACQUISITION CASE STUDY: NEW DAWN * * * * * * Jul. 2012: Sabra introduced to New Dawn through its financial advisor Sep. 2012: Closed sale/leaseback on Aurora, Colorado facility Oct. 2012: Explored partial recapitalization of
Slide 13: Financial Overview
Financial Overview ASABRA
Slide 14: Financial Strength
14 FINANCIAL STRENGTH (dollars in millions) $461 $225 $161 As of December 31, 2010 $1,083 $415 $144 $144 Pro forma as of March 31, 2013 Common Equity Market Value Senior Notes Mortgage Debt Preferred Equity Capitalization $847 million $1.79 billion Track record of access to capital markets (1) Assum
Slide 15: Financial Results
FINANCIAL RESULTS 15 Normalized AFFO/share & Normalized FFO/share Normalized AFFO/share & dividend/share $0.40 $0.38 $0.37 $0.38 $0.42 $0.39 $0.41 $0.43 $0.39 $0.32 $0.32 $0.32 $0.33 $0.33 $0.33 $0.33 $0.34 $0.34 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4
Slide 16: Strong Portfolio Performance
16 Historical overall occupancy(1) Historical SNF portfolio skilled mix(1) (2) STRONG PORTFOLIO PERFORMANCE (as of March 31, 2013) 41.3% 37.5% 38.6% 36.5% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% Trailing 12 Months, Q1 2012 Trailing 12 Months, Q1 2013 Q1 2012 Q1 2013 88.5% 88.3% 88.2% 87.9% 85.0% 8
Slide 17: Tenant Coverage Analysis
17 EBITDAR Coverage (1) EBITDARM Coverage (1) TENANT COVERAGE ANALYSIS (as of March 31, 2013) 1.31x 1.26x 1.50x 1.26x 1.00x 1.10x 1.20x 1.30x 1.40x 1.50x 1.60x Trailing 3 months, Q1 2012 Trailing 3 months, Q1 2013 Trailing 12 months, Q1 2012 Trailing 12 months, Q1 2013 (1) EBITDAR Coverage and EBITD
Slide 18: Tenant Coverage Analysis
18 EBITDAR Coverage (1) (2) EBITDARM Coverage (1) (2) TENANT COVERAGE ANALYSIS (as of March 31, 2013) 1.21x 1.13x 1.28x 1.11x 1.00x 1.10x 1.20x 1.30x 1.40x 1.50x Trailing 3 months, Q1 2012 Trailing 3 months, Q1 2013 Trailing 12 months, Q1 2012 Trailing 12 months, Q1 2013 (1) EBITDAR Coverage and EBI
Slide 19: Financial Strength
2.18x 1.85x 1.76x 1.67x 2.03x 1.53x 2.03x 1.24x 1.19x 3.07x 2.60x 2.50x 2.37x 2.26x 3.15x 2.69x 2.65x 3.36x 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 PF Q1 2013 Secured Leverage Unsecured Leverage 4.04x 4.55x FINANCIAL STRENGTH 19 LTM C
Slide 20: Financial Strength: Pro Forma Debt Maturities
FINANCIAL STRENGTH 20 Pro Forma Debt Maturities (1) (dollars in millions) $3.0 $3.7 $86.0 $1.7 $1.7 $1.7 $1.8 $1.8 $1.9 $2.8 $3.5 $34.7 $194.0 $0 $50 $100 $150 $200 $250 $300 $350 Mortgage Notes Outstanding Revolver Unused Revolver Senior Notes $200.0 $211.3 $86.5 Pro forma liquidity of $319.6 milli
Slide 21: Virtuous Cycle
21 Make accretive investments Diversify from Genesis Diversify payor sources Lower risk Lower cost of capital and enhance competitive position Higher AFFO VIRTUOUS CYCLE
Slide 22: Appendix
Appendix ASABRA
Slide 23: Debt Covenants
DEBT COVENANTS (1) 23 (1) Based on defined terms in the 2018 senior notes indenture and the amended credit agreement. (2) Information assumes the origination of the Sun City West Mortgage Loan and Bee Cave Preferred Equity Investment, the repayment of the revolving credit facility, the repayment of
Slide 24: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO
24 Reconciliation of Funds from Operations (FFO), Normalized FFO, Adjusted Funds from Operations (AFFO) and Normalized AFFO (1) Information assumes the origination of the Sun City West Mortgage Loan and Bee Cave Preferred Equity Investment, the repayment of the revolving credit facility, the repayme
Slide 25: Definitions
DEFINITIONS 25 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