Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Citi Global Property CEO Conference 2021
39 slides from Sabra Health Care Reit's conference presentation, Mar 8, 2021
Slide 1: Consistent Strategy. Deliberate Execution.
CONSISTENT STRATEGY. DELIBERATE EXECUTION. Citi Global Property CEO Conference March 8 - 11, 2021
Slide 2: Delivering Value
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. DELIVERING VALUE Citi Global Property CEO Conference
Slide 3: We've Built a Strong and Resilient Foundation
“WE’VE BUILT A STRONG AND RESILIENT FOUNDATION.” – Rick Matros, Chief Executive Officer STRATEGY Citi Global Property CEO ConferenceMarch 8 - 11, 2021 3
Slide 4: Sabra Today
4 35% 72 $6.4B1 SABRA TODAY STRATEGY Citi Global Property CEO ConferenceMarch 8 - 11, 2021 DEBT/ASSET VALUE OPERATOR RELATIONSHIPS ENTERPRISE VALUE $1B+ LIQUIDITY 9% MAX RELATIONSHIP CONCENTRATION 20.5% NOI CAGR SINCE 2011 (1) Includes Sabra’s 49% pro rata share of the debt of its unconsolidated joi
Slide 5: A Resilient and Agile REIT
A RESILIENT AND AGILE REIT Investment ▪ Invest in high-quality, strong-performing senior housing and SNF portfolios ▪ Relationship diversification ▪ Geographic diversification (investments in 43 states and Canada) ▪ Grow private-pay through investments in high-quality managed senior housing ▪ Develo
Slide 6: Strategy in Action
“BY OPPORTUNISTICALLY EXECUTING OUR STRATEGY, WE CONTINUE TO DELIVER LONG-TERM VALUE FOR OUR SHAREHOLDERS.” STRATEGY IN ACTION Citi Global Property CEO ConferenceMarch 8 - 11, 2021 6 – Talya Nevo-Hacohen, Chief Investment Officer
Slide 7: Strengthened Balance Sheet by Reducing Leverage
7 34 vs 72 STRENGTHENED BALANCE SHEET BY REDUCING LEVERAGE STRATEGY IN ACTION Citi Global Property CEO ConferenceMarch 8 - 11, 2021 Lowered cost of PERMANENT DEBT by 76 basis points to 3.52% Reduced NET DEBT TO ADJUSTED EBITDA1 ratio from 5.69x to 4.88x DECEMBER 31, 2018 vs DECEMBER 31, 2020 (1) Net
Slide 8: Significantly Improved Credit Metrics
8 INTEREST COVERAGE + 1.18x to 5.32x FIXED CHARGE COVERAGE + 1.44x to 5.14x TOTAL DEBT/ASSET VALUE IMPROVED 1400 bps SIGNIFICANTLY IMPROVED CREDIT METRICS STRATEGY IN ACTION Citi Global Property CEO ConferenceMarch 8 - 11, 2021 DECEMBER 31, 2018 vs DECEMBER 31, 2020
Slide 9: Committed to Strong Corporate Governance & Ethical Business Practices
COMMITTED TO STRONG CORPORATE GOVERNANCE & ETHICAL BUSINESS PRACTICES Citi Global Property CEO ConferenceMarch 8 - 11, 2021 9 Our inaugural ESG report is in process. We believe that a diverse workforce is essential to our continued success. Our workforce reflects diverse gender, ethnicity, age and c
Slide 10: Diverse and Experienced Leadership
DIVERSE AND EXPERIENCED LEADERSHIP Citi Global Property CEO ConferenceMarch 8 - 11, 2021 10 We added two new board members, Ann Kono and Clifton Porter, during the fourth quarter and a third new board member, Katie Cusack, in January of 2021. These members add fresh skillsets to our already strong,
Slide 11: Investment Thesis
“WE CUSTOMIZE OUR FINANCIAL SOLUTIONS TO PROVIDE OPERATORS WITH CAPITAL TO INVEST IN THEIR BUSINESS AND SUPPORT THE DELIVERY OF QUALITY CARE.” – Talya Nevo-Hacohen, Chief Investment Officer INVESTMENT THESIS Citi Global Property CEO ConferenceMarch 8 - 11, 2021 11
Slide 12: Opportunistically Sourced, Creatively Structured and Prudently Financed
OPPORTUNISTICALLY SOURCED, CREATIVELY STRUCTURED AND PRUDENTLY FINANCED Unique, Accretive Investments Utilize our operational and asset management expertise to identify and capitalize on new opportunities where off-market price dislocation exists. Support Operator Expansion Be the capital partner of
Slide 13: Our Portfolio and Tenants Are Positioned to Deliver Quality Care
“OUR PORTFOLIO AND TENANTS ARE POSITIONED TO DELIVER QUALITY CARE NOW AND IN THE FUTURE.” PORTFOLIO – Peter Nyland, Executive Vice President Asset Management Citi Global Property CEO ConferenceMarch 8 - 11, 2021 13
Slide 14: COVID-19 rent collections and liquidity
▪ From the beginning of the COVID-19 pandemic through February 2021, we have collected 99.9% of our forecasted rents. While we have agreed to short-term, temporary pandemic-related rent deferrals for two tenants of one to two months of rent, we have not granted any permanent pandemic-related rent co
Slide 15: COVID-19 impact on operations and occupancy
The COVID-19 pandemic continues to have a significant impact on the operations of our facilities, although partially mitigated by government relief packages providing assistance to our Skilled Nursing/Transitional Care and Specialty Hospital and Other portfolios, and our Senior Housing - Leased and
Slide 16: Government relief packages for operators
▪ In response to the COVID-19 pandemic, the federal government approved several relief packages that have benefited our Skilled Nursing/Transitional Care facility operators. Prior to September 1, 2020, few of these programs were available to our Senior Housing operators; as of September 1, 2020, eli
Slide 17: COVID-19 mitigation sources
Mitigation Source Mitigates EBITDARM Reductions Description Estimated Available (All Sabra Relationships) PRF 2: Yes The CARES Act has, to date, appropriated $175 billion to the Provider Relief Fund (“PRF”) for hospitals and other healthcare providers nationwide to prevent, prepare for and respond t
Slide 18: Provider Relief Fund received by operators
▪ To date, approximately $100 million received from the CARES Act Provider Relief Fund have been recognized in the operating results reported by our operators. We estimate that our operators have received approximately $230 million from the Provider Relief Fund but have only recognized $100 million
Slide 19: 1Q 2021 Guidance
1Q 2021 GUIDANCE PORTFOLIO Citi Global Property CEO ConferenceMarch 8 - 11, 2021 19 We expect the following amounts per diluted common share for the quarter ended March 31, 2021: o Net income: $0.16 - $0.17 o FFO: $0.39 - $0.40 o AFFO: $0.38 - $0.39 The above estimates are based on the following key
Slide 20: Superior Returns Start with a Strong Portfolio
8 Years Wtd. Avg. Remaining Lease Term SUPERIOR RETURNS START WITH A STRONG PORTFOLIO 609 Investments1 PORTFOLIO 77% 83% 80% 75% Average Occupancy Percentage 2.17x 1.25x Rent Coverage3 72 Relationships 40% Skilled Mix SH - Leased SH - Managed 2 SNF/TC/Hosp/Oth. SH - Leased (1) Includes investment in
Slide 21: Proprietary Pipeline of Purpose-Built Assets
PROJECTS 25 CURRENT TOTAL INVESTMENT $389M EXPECTED REAL ESTATE VALUE 1 $490M COMPLETED AND PLANNED PROJECTS PROPRIETARY PIPELINE OF PURPOSE-BUILT ASSETS ENHANCES THE QUALITY OF OUR PORTFOLIO PORTFOLIO (1) Represents the value of completed projects at Sabra’s purchase price and the projected purchas
Slide 22: Effective Asset Management and Strong Operator Relationships
Senior Housing - Managed 13.6% Specialty Hospitals and Other 10.8% Senior Housing - Leased 9.8% Interest and Other Income 2.0% Skilled Nursing / Transitional Care 63.8% EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Crafted portfolio of high- quality and diverse facilities passionate a
Slide 23: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE Citi Global Property CEO ConferenceMarch 8 - 11, 2021 23
Slide 24: Our Operators Are Driven by an Unwavering Passion
OUR OPERATORS ARE DRIVEN BY AN UNWAVERING PASSION: ADVANCING THE QUALITY OF CARE We Work With Operators Who Are: ▪ Highly engaged ▪ Nimble ▪ Regional experts ▪ In markets with favorable demographics ▪ Well positioned for the future of health care delivery OPERATORS Citi Global Property CEO Conferenc
Slide 25: We Support Our Operators
WE SUPPORT OUR OPERATORS We Invest in Our Tenants’ Success: ▪ Redevelopment ▪ Expansion ▪ Strategic development ▪ Flexible equity and debt capital solutions OPERATORS Citi Global Property CEO ConferenceMarch 8 - 11, 2021 25
Slide 26: Strategy in Action: Operator testimonials
“WHEN IT COMES TO EXECUTING OUR STRATEGY, WE DO WHAT WE SAY WE ARE GOING TO DO.” – Talya Nevo-Hacohen, Chief Investment Officer STRATEGY IN ACTION – Rick Matros, Chief Executive Officer “WE’VE CONSISTENTLY DELIVERED VALUE TO OUR SHAREHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” Citi Global Pro
Slide 27: Proprietary Information Technology System
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, yet effective. CREATING OPERATING EFFICIENCIES OP
Slide 28: Free Access to Industry-Leading Business Intelligence Tools
DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS Citi Global Property CEO Conference OPERATORS March 8 - 11, 2021 28
Slide 29: Business intelligence tools for operators
Data Integrity Audit Real-time MDS verification analyzes the accuracy of the Minimum Data Set (MDS) assessment prior to CMS submission. Each MDS is checked for logical and clinical coding accuracy, with recommended actions when inaccurate, incomplete, or inconsistent information is identified. Helpf
Slide 30: Diverse Operator Base, Passionate About Care
Avamere 8.6% North American 7.6% Signature Healthcare 7.5% Cadia 7.2% Signature Behavioral 6.6%Enlivant 6.6%Holiday 5.1% Other 1.9% Other 48.9% Relationship Concentration 1 DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE By diversifying our tenant concentration, we’ve curated a portfolio equipped to pe
Slide 31: Performance
“WE’VE DELIVERED ON OUR PROMISE TO STRENGTHEN OUR BALANCE SHEET AND ARE POISED TO CAPITALIZE ON FUTURE GROWTH OPPORTUNITIES.” – Harold Andrews, Jr., Chief Financial Officer PERFORMANCE Citi Global Property CEO ConferenceMarch 8 - 11, 2021 31
Slide 32: Balanced Capital Structure
Common Equity Value 58% Secured Debt 7% Unsecured Debt 35% Capital Structure 1 ENTERPRISE VALUE $6.4B BALANCED CAPITAL STRUCTURE Our diverse menu of capital options ensures that we have ready access to low- cost capital to fund our growth. PERFORMANCE (1) As of 12/31/2020. Includes Sabra’s 49% pro r
Slide 33: Credit metrics versus investment grade peers
(1) Credit metrics (except net debt to adjusted EBITDA) are calculated in accordance with the credit agreement relating to our revolving credit facility and the indentures relating to our unsecured senior notes. (2) Investment Grade Peers consists of WELL, VTR, OHI and NHI, except with respect to th
Slide 34: Favorable Profile with Staggered Maturities
FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE AT DECEMBER 31, 2020 PERFORMANCE (1) Term loans are pre-payable at par. (2) Revolving Credit Facility is subject to two six-month extension options. (dollars in millions) Citi Global Property CEO ConferenceMarch 8 - 11, 2021 34 21
Slide 35: Peer comparison: FFO multiples, dividend yield, NAV
10.3x 11.3x 12.6x 14.5x 15.5x 20.7x 0.0x 4.0x 8.0x 12.0x 16.0x 20.0x 24.0x SBRA OHI NHI LTC CTRE Big 2 Average 6.8% 3.4% 4.4% 5.5% 6.3% 7.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% SBRA Big 2 Average CTRE LTC NHI OHI 14.1% 19.4% 22.7% 25.1% 34.4% 41.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% SBRA NHI Big 2
Slide 36: Well-Positioned Portfolio
SNF CONCENTRATION 1 SNF EBITDARM COVERAGE 1,3TOP FIVE RELATIONSHIP CONCENTRATION 1 (1) Represents latest available concentration and coverage for peers as of 3/4/2021. (2) Based on Annualized Cash NOI as of 12/31/2020 for real estate investments, investments in loans receivable and other investments
Slide 37: Appendix
APPENDIX Citi Global Property CEO ConferenceMarch 8 - 11, 2021 37
Slide 38: Definitions of non-GAAP measures
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. Adjusted EBITDA is a
Slide 39: 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 are not limited to, all statements re
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