Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Bank of America Merrill Lynch Global Real Estate Conference 2014
25 slides from Sabra Health Care Reit's conference presentation, Sep 10, 2014
Slide 1: Bank of America Merrill Lynch Global Real Estate Conference
Bank of America Merrill Lynch Global Real Estate Conference September 10-11, 2014 New York, NY 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 June 30, 2014 unless otherwise noted. (2) Since first quarter 2011. (3) Through September 3, 2014. (4) Since fourth quarter 2011. $924 mm Acquisitions and investments (3) 3.50% Improvemen
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, coupl
Slide 8: Relationships Drive Consistent Deal Flow
. 8 RELATIONSHIPS DRIVE CONSISTENT DEAL FLOW Partnering with growing operators and developers $186.5 $262.7 $113.9 $32.0 $36.6 $81.1 $218.4 $299.3 $195.0 2012 2013 YTD 2014 New Investments Relationship Investments • In 2014, 42% of investments have come from existing relationships, up from 12% in 20
Slide 9: Target = Investment Grade
. 9 TARGET = INVESTMENT GRADE Main barriers to investment grade rating are size and diversification Sabra “Big 3” Debt to Normalized EBITDA 4.82x 4.90x 5.66x Debt as % of Enterprise Value 31% 31% 34% Interest Coverage Ratio 4.17x 3.52x 4.77x Fixed Charge Coverage Ratio 3.23x 2.78x 4.77x Debt to Gros
Slide 10: Portfolio Performance
Portfolio Performance
Slide 11: Strong Portfolio Performance: Occupancy and Skilled Mix
. 11 STRONG PORTFOLIO PERFORMANCE Portfolio occupancy and SNF portfolio skilled mix 88.8% 88.2% 36.9% 35.6% 2013 2014 Occupancy Percentage Skilled Mix Percentage Solid skilled mix reflects focus on higher-acuity, short-stay skilled nursing facilities. (1) Skilled mix and occupancy percentage for fac
Slide 12: Strong Portfolio Performance: Skilled Nursing Coverage
. 12 STRONG PORTFOLIO PERFORMANCE Skilled nursing/transitional care EBITDAR and EBITDARM coverage 1.28x 1.18x 1.76x 1.63x 2013 2014 EBITDAR EBITDARM (1) (2) Fixed Charge Coverage Ratio(2) for Genesis HealthCare for the twelve months ended June 30, 2013: 1.23x June 30, 2014: 1.24x (1) EBITDARM, EBITD
Slide 13: Strong Portfolio Performance: Senior Housing Coverage
. 13 STRONG PORTFOLIO PERFORMANCE Senior Housing EBITDAR and EBITDARM coverage 1.20x 1.18x 1.43x 1.40x 2013 2014 EBITDAR EBITDARM (1) Secure rental payments from an increasing portion of our portfolio (1) EBITDARM, EBITDAR and related coverages are only included in periods subsequent to our acquisit
Slide 14: Financial Overview
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Slide 15: Capitalization and Cost of Capital
. 15 Capitalization and cost of capital $1,335 $550 $125 $145 Common Equity Market Value Senior Notes Mortgage Debt Preferred (1) (1) Common Equity Market Value is based on shares outstanding and closing stock price of $28.71 as of June 30, 2014. Track Record of Access to Capital Markets 2014 Third
Slide 16: Financial Results
. 16 FINANCIAL RESULTS Normalized AFFO/share, Normalized FFO/share and Dividend/share $1.51 $1.59 $1.77 $0.53 $0.53 $0.50 $1.31 $1.47 $1.84 $0.55 $0.53 $0.54 $0.96 $1.32 $1.36 $0.38 $0.38 $0.38 2011 2012 2013 Q1 2014 Q2 2014 Pro forma Q2 2014 AFFO/share FFO/share Dividend/Share Sabra’s quarterly div
Slide 17: Financial Strength: Debt to EBITDA
. 17 FINANCIAL STRENGTH Historical LTM Consolidated Debt to EBITDA 2.50x 2.69x 2.75x 3.35x 1.76x 2.02x 1.85x 0.76x 4.26x 4.71x 4.60x 4.11x 12/31/2011 12/31/2012 12/31/2013 Pro forma Q2 2014 Unsecured Leverage Secured Leverage Consolidated Debt to EBITDA Lowering use of secured leverage, a step towar
Slide 18: Financial Strength: Interest Coverage
. 18 FINANCIAL STRENGTH Historical LTM Interest Coverage 3.17x 3.22x 3.85x 4.17x 2011 2012 2013 Pro forma Q2 2014 Weighted average interest rate (3) declined from: 7.24% at December 31, 2011 to 5.17% as of June 30,2014 (1) Interest Coverage calculations are based on senior notes covenant definition.
Slide 19: Financial Strength: Debt Maturities
. 19 FINANCIAL STRENGTH Debt maturities $1.4 $2.8 $2.9 $3.0 $3.1 $3.2 $3.3 $3.4 $3.5 $3.7 $95.0 $289.5 $- $350.0 $200.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Thereafter Mortgage Notes Revolver Available Senior Notes Ample liquidity as of June 30, 2014, of $304.5 million with no significa
Slide 20: Appendix
Appendix
Slide 21: Debt Covenants
. 21 DEBT COVENANTS(1) Option One Option Three Ma Min Max June 30, 2014 Pro forma June 30,2014 (2) Secured Credit Facility Consolidated Leverage Ratio 5.50x 4.12x 4.11x Consolidated Fixed Charge Coverage Ratio 1.75x 3.23x 3.24x Consolidated Tangible Net Worth (3) $616.6 $806.3 $806.3 Limitation on S
Slide 22: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO
. 22 RECONCILIATION OF FFO, NORMALIZED FFO, AFFO and NORMALIZED AFFO Option One Option Three Ma (1) Assumes all investment and financing activity during the quarter ended or subsequent to June 30, 2014 were completed as of January 1, 2014. 2011 2012 2013 Net income (loss) attributable to common stoc
Slide 23: Forward Looking Statements
. 23 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 24: Non-GAAP Financial Measures
. 24 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 25: Definitions
. 25 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
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