Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — REITweek: 2019 Investor Conference
35 slides from Sabra Health Care Reit's conference presentation, Jun 4, 2019
Slide 1: Dedicated to Value Creation – REITweek 2019 Investor Conference
DEDICATED TO VALUE CREATION REITweek: 2019 Investor Conference June 4 – 6, 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. June 4 - 6, 2019 REITweek: 2019 In
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 June 4 - 6, 2019 REITweek: 2019 Investor Conference 3
Slide 4: Opportunistically executing our strategy post merger
STRATEGY WE’VE BEEN OPPORTUNISTICALLY EXECUTING OUR STRATEGY POST MERGER, AND IT SHOWS ENTERPRISE VALUE 1,2 SNF CONCENTRATION 3 OPERATOR RELATIONSHIPS 1 $2.6B vs $6.7B 74% vs 61% 34 vs 69 (1) Pre CCP merger reported as 6/30/2017 compared to 3/31/2019. Includes Sabra’s 49% pro rata share of the debt
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 1 Access to Capital • Improved fixed charge coverage from 3.16x as of 6/30/17
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 June 4 - 6, 2019 REITweek: 2019 Investor Conference 7
Slide 8: 2019 Guidance
STRATEGY IN ACTION 2019 GUIDANCE 1 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 Cas
Slide 9: Bond Refinance Recap
STRATEGY IN ACTION BOND REFINANCE RECAP On May 29, 2019, we completed the issuance of $300.0 million of 4.80% senior notes due 2024 (4.83% yield). The offering represents Sabra’s inaugural investment grade transaction. Guidance was released 20 bps inside of initial price thoughts, with the abi
Slide 10: Creating Operating Efficiencies
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 11: 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 June 4 - 6, 2019 REITweek: 2019 Inves
Slide 12: 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 13: 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 June 4 - 6, 2019 REITweek: 2019 Investor Conference 13
Slide 14: Superior Returns Start with a Strong Portfolio
PORTFOLIO SUPERIOR RETURNS START WITH A STRONG PORTFOLIO AS OF MARCH 31, 2019 SNF/TC SH - Leased SH – Managed 2 Hosp/Oth. 83% 87% 90% 89% 639 Investments1 Average Occupancy Percentage 69 39 % Relationships 1 Skilled Mix1 SNF/TC SH - Leased Hosp/Oth. 9 1.25x 1.04x 2.93x Years Wtd. Avg. Remaining Rent
Slide 15: 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 $494M 7.5% (1) Represents the value of completed projects at Sabra’
Slide 16: Effective Asset Management and Strong Operator Relationships
PORTFOLIO EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Senior Housing Managed 17% Asset Mix 1 Crafted portfolio of high- Senior Housing quality and diverse Leased facilities passionate about 10% care. Specialty Hospitals Skilled Nursing / and Other Transitional Care 10% 61% Interest
Slide 17: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE June 4 - 6, 2019 REITweek: 2019 Investor Conference 17
Slide 18: 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 June 4 - 6, 2019 REITweek: 2019 Investor Conference 18
Slide 19: Our Operators Are 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 June 4 - 6, 2019 REITweek: 2019
Slide 20: 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 June 4 - 6, 2019 REITweek: 2019 Investor Conference 20
Slide 21: 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 22: Free Access to Industry-Leading Business Intelligence Tools
OPERATORS DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS June 4 - 6, 2019 REITweek: 2019 Investor Conference 22
Slide 23: Diverse Operator Base, Passionate About Care
OPERATORS DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE 1 Relationship Concentration Enlivant 10% Avamere By diversifying our tenant 8% concentration, we’ve curated a portfolio North American equipped to perform in 7% today’s dynamic health care market. Signature Healthcare 7% Other 62% Signature Beh
Slide 24: Leadership
LEADERSHIP “WHEN WE PUT OUR MINDS TO SOMETHING, WE GET IT DONE.” – Rick Matros, Chief Executive Officer June 4 - 6, 2019 REITweek: 2019 Investor Conference 24
Slide 25: 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 June 4 - 6
Slide 26: Performance
PERFORMANCE “WE CONSISTENTLY DELIVER VALUE TO OUR STOCKHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” – Harold Andrews, Jr., Chief Financial Officer June 4 - 6, 2019 REITweek: 2019 Investor Conference 26
Slide 27: 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 (77.3%), unsecured borrowings 2 . Cost of permanent debt is 4.11% 3 . Well-laddered maturity schedule . More than $520 million of p
Slide 28: Balanced Capital Structure
PERFORMANCE BALANCED CAPITAL STRUCTURE Capital Structure 1 Common Equity Value Our diverse menu of capital 51% options ensures that we have ready access to low- cost capital to fund our Unsecured Debt growth. 41% ENTERPRISE VALUE Our Credit Facility which includes a $1.0 billion Revolving Credit Fac
Slide 29: Strong Investment Grade Credit Metrics
PERFORMANCE STRONG INVESTMENT GRADE CREDIT METRICS 1 SABRA PRO INVESTMENT GRADE FORMA 1Q19 PEERS MEDIAN 2 LTM Pro Forma Net Debt to Pro 5.64x 3 5.45x Forma Adjusted EBITDA LTM Pro Forma Net Debt to Pro Forma Adjusted EBITDA - Incl. 6.08x 3 5.50x Unconsolidated Joint Venture Interest Coverage Ratio 3
Slide 30: Favorable Profile with Staggered Maturities
PERFORMANCE FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE AT MARCH 31, 2019 (dollars in millions) $1,600 $1,400 $1,200 $514 $1,003 $1,000 $800 519 $585 $600 81 994 $400 $310 1 $210 $207 481 $192 500 $174 $200 2 3 300 70 $72 $3 200 200 3 189 100 72 $0 2019 2020 2021 2022 2023 2024
Slide 31: Attractive Relative Valuation
PERFORMANCE ATTRACTIVE RELATIVE VALUATION 2019 FFO Multiples 1 Dividend Yield 22.0x 12.0% 18.9x 18.0x 18.3x 10.0% 9.3% 16.5x 14.6x 14.8x 13.2x 8.0% 7.4% 6.0% 5.4% 11.0x 10.1x 4.6% 4.7% 5.1% 4.0% 3.7% 5.5x 2.0% 0.0% 0.0x SBRA CTRE Big 2 HCP LTC NHI OHI SBRA OHI LTC NHI Big 2 HCP CTRE Average 2 Averag
Slide 32: Well-Positioned Portfolio
PERFORMANCE WELL-POSITIONED PORTFOLIO SNF CONCENTRATION 1 TOP FIVE RELATIONSHIP SNF RENT COVERAGE 1,3 CONCENTRATION 1 87% 69% 2.66x 66% 80% 2.37x 56% 61% 58% 1.73x 1.79x 1.67x 39% 38% 29% 2 2 4 SBRA NHI LTC OHI CTRE SBRA OHI LTC CTRE NHI SBRA OHI LTC CTRE NHI (1) Represents latest available concentr
Slide 33: Appendix
APPENDIX June 4 - 6, 2019 REITweek: 2019 Investor Conference 33
Slide 34: Definitions
APPENDIX DEFINITIONS Adjusted EBITDA.* Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the imp act of merger-related costs, stock-based compensation expense under the Company’s long-term equity award program, and loan loss reserves
Slide 35: 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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