Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Non-Deal Roadshow (May 2016)
27 slides from Sabra Health Care Reit's roadshow presentation, May 17, 2016
Slide 1: Non-Deal Roadshow
SunTrust Robinson Humphrey, Inc. Non-Deal Roadshow May 18, 2016 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: Key Transaction Terms: Forest Park Status Update
. 3 Key Transaction Terms Frisco – Real Estate Fort Worth – Construction Loan Dallas – Mortgage Loan • Sale closed for $96.3 million combined on April 1, 2016 • To date we have received net cash proceeds of $88.1 million and we expect to receive an additional $1.5 million from collection of outstand
Slide 4: Sabra's Portfolio by the Numbers
. 4 • $2.2 billion in acquisitions and investments (2) • 34 relationships with tenants and healthcare providers compared to 1 in 2010 (2)(3) SABRA’S PORTFOLIO BY THE NUMBERS Revenue diversification is the name of the game Skilled nursing/ transitional care Genesis 1) Includes revenues from all inves
Slide 5: The Future of Health Care Delivery
. 5 THE FUTURE OF HEALTH CARE DELIVERY The times they are a changing Skilled Nursing/ Transitional Care Long term care Higher-acuity, short-stay rehab, “step down” units for hospitals Senior Housing Developed by multi-family developers for self-sufficient residents Needs-based model, residents with
Slide 6: Thinking Outside the Box
. 6 Traditional REIT structures - Sale/leasebacks -Mortgage debt THINKING OUTSIDE THE BOX Deal structure flexibility drives competitive advantage Smaller investments with options to purchase RIDEA compliant structures Preferred equity & mezzanine debt Development agreements
Slide 7: Market Focus
. 7 MARKET FOCUS Bigger is not always better • Many opportunities exist outside of largest MSAs in U.S. • The percentage of the population over the age of 65 is greater in the markets where Sabra has invested than in the U.S. as a whole • Lower costs to build, coupled with favorable demographics and
Slide 8: Development Activity
. 8 DEVELOPMENT ACTIVITY Development relationships drive consistent deal flow for new, purpose-built facilities ($ in millions, except price per unit) 28 Total anticipated new investments $77.4 Total invested dollars through May 12, 2016 $240,000 Price per unit upon option exercise $627.8 Value of n
Slide 9: Target = Investment Grade
. 9 TARGET = INVESTMENT GRADE Main barriers to investment grade rating are size and diversification Sabra (1) “Big 3” (2) Net Debt to Adjusted EBITDA (3) 5.65x 5.86x 6.18x Debt as % of Enterprise Value 48% 33% 41% Interest Coverage Ratio 3.93x 3.70x 5.30x Fixed Charge Coverage Ratio 3.13x 3.35x 4.60
Slide 10: Portfolio Performance
Portfolio Performance
Slide 11: Strong Portfolio Performance: Occupancy and Skilled Mix
. 11 STRONG PORTFOLIO PERFORMANCE Portfolio occupancy and SNF/TC portfolio skilled mix 88.5% 87.5% 90.0% 90.7% 38.9% 41.5% 2015 2016 2015 2016 SNF/TC Senior Housing Skilled Mix Occupancy & Skilled Mix Solid skilled mix reflects focus on higher- acuity, short-stay skilled nursing/transitional care fa
Slide 12: Skilled Nursing/Transitional Care EBITDAR and EBITDARM Coverage
. 12 STRONG PORTFOLIO PERFORMANCE Skilled nursing/transitional care EBITDAR and EBITDARM coverage 1.25x 1.60x 1.45x 1.77x EBITDAR EBITDARM 2015 2016 (1) (1) EBITDAR and EBITDARM coverages include only Stabilized Facilities acquired before the three months ended March 31, 2016 and are only included i
Slide 13: Senior Housing EBITDAR and EBITDARM Coverage
. 13 STRONG PORTFOLIO PERFORMANCE Senior Housing EBITDAR and EBITDARM coverage 1.27x 1.48x 1.21x 1.37x EBITDAR EBITDARM 2015 2016 (1) Secure rental payments from an increasing portion of our portfolio (1) EBITDAR and EBITDARM coverages include only Stabilized Facilities acquired before the three mon
Slide 14: Fixed Charge Coverage
. 14 STRONG PORTFOLIO PERFORMANCE Fixed charge coverage (1) Fixed Charge Coverage is presented one quarter in arrears for tenants with significant corporate guarantees. See Definitions for definition of Fixed Charge Coverage. (for the twelve month periods ended March 31, 2015 and 2016) Tenant Facili
Slide 15: Financial Overview
Financial Overview
Slide 16: Capitalization and Cost of Capital
. 16 $1,363 $700 $178 $153 $341 $103 Common Equity Market Value Senior Notes Mortgage Debt Preferred Equity Market Value Term Loans Revolving Credit Facility Net of Cash (1) Capitalization and cost of capital (1) Common Equity Market Value and Preferred Equity Market Value are based on closing stock
Slide 17: Financial Results
. 17 FINANCIAL RESULTS Normalized AFFO/share, Normalized FFO/share and dividend/share $1.51 $1.59 $1.77 $2.12 $2.14 $0.52 $0.53 $0.55 $0.53 $1.31 $1.47 $1.84 $2.20 $2.33 $0.53 $0.58 $0.64 $0.56 $1.29 $1.33 $1.38 $1.54 $1.62 $0.41 $0.41 $0.41 $0.42 2011 2012 2013 2014 2015 Q2 2015 Q3 2015 Q4 2015 Q1
Slide 18: Financial Strength: Historical Net Debt to Adjusted EBITDA
. 18 FINANCIAL STRENGTH Historical net debt to adjusted EBITDA (1) 2.19x 2.65x 2.82x 4.48x 5.11x 4.89x 1.90x 2.11x 1.92x 0.61x 0.74x 0.76x 4.09x 4.76x 4.74x 5.09x 5.85x 5.65x 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 3/31/2016 Unsecured Leverage Secured Leverage Net Debt to Adjusted EBI
Slide 19: Financial Strength: Historical LTM Interest Coverage
. 19 FINANCIAL STRENGTH Historical LTM interest coverage 3.17x 3.22x 3.85x 4.29x 4.19x 3.93x 2011 2012 2013 2014 2015 Q1 2016 Weighted average interest rate (2) declined from: 7.24% at December 31, 2011 to 4.58% of as of March 31, 2016 (1) Interest Coverage is calculated in accordance with the inden
Slide 20: Financial Strength: Pro Forma Debt Maturities
. 20 FINANCIAL STRENGTH Pro Forma debt maturities Ample pro forma liquidity with no significant maturities until 2020 (1) Pro forma debt information assumes the sale of Forest Park – Frisco and the use of proceeds to pay down our revolving credit facility were completed as of March 31, 2016. (2) Mat
Slide 21: Appendix
Appendix
Slide 22: Key Credit Statistics
. 22 KEY CREDIT STATISTICS (1) Option One Option Three Ma December 31, 2015 March 31, 2016 Net Debt to Adjusted EBITDA (2) 5.85x 5.65x Interest Coverage 4.19x 3.93x Fixed Charge Coverage Ratio 3.21x 3.13x Total Debt/Asset Value 47% 47% Secured Debt/Asset Value 6% 6% Unencumbered Assets/Unsecured Deb
Slide 23: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO
. 23 RECONCILIATION OF FFO, NORMALIZED FFO, AFFO and NORMALIZED AFFO Option One Option Three Ma (1) See Non-GAAP Financial Measures on slide 26 for further information. 2015 2016 2011 2012 2013 2014 2015 Q2 Q3 Q4 Q1 Net income attributable to common stockholders $ 12.8 $ 19.5 $ 25.7 $ 36.7 $ 69.2 $
Slide 24: Forward Looking Statements
. 24 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 pres
Slide 25: Non-GAAP Financial Measures
. 25 NON-GAAP FINANCIAL 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 attributable to common stockholders (“FFO”), Normalized FFO, Adjusted FFO (“AFFO”), Normalized AFFO, FFO pe
Slide 26: Definitions
. 26 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 27: Definitions
. 27 DEFINITIONS Option One 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 period. Occupancy
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