Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Q3 2017 Earnings Presentation
27 slides from Sonida Senior Living's earnings presentation, Nov 1, 2017
Slide 1: Capital Senior Living: A Leading Pure-Play Senior Housing Owner-Operator
Capital Senior Living A Leading Pure-Play Senior Housing Owner-Operator Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements The forward-looking statements in this presentation are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company’s ability to complete the refinancing of certain of our wholly owned comm
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDAR is a financial valuation measure and Adjusted Net Income and Adjusted CFFO are financial performance measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material
Slide 4: Capital Senior Living Investment Rationale
Capital Senior Living Investment Rationale Attractively Positioned in the Highly Fragmented Senior Housing Market Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership Capital Plan Supports Long-Term Growth Initiatives Track Record of Strong Growth and Uniquely Pos
Slide 5: Attractively Positioned in the Highly Fragmented Senior Housing Market
Attractively Positioned in the Highly Fragmented Senior Housing Market 1
Slide 6: Top-10 Operator and Pure-Play Senior Housing Company
Top-10 Operator and Pure-Play Senior Housing Company Portfolio Mix (Average Units) As of September 30, 2017 AR. 173 AZ. 189 CT. 238 FL. 429 IA. 122 IL. 762 IN. 2,440 MI. 173 MN. 173 MO. 662 MS. 143 NC. 457 SC. 683 NE. 650 NJ. 98 NY. 603 OH. 2,372 TX. 3,990 VA. 455 CA. 408 CA. 408 AZ. 189 Resident Ca
Slide 7: One of the Largest Senior Housing Owners by Percentage of Ownership
One of the Largest Senior Housing Owners by Percentage of Ownership Ownership Evolution Advantages to Real Estate Ownership Ownership of 10 Largest US Senior Housing Operators Maximizes cash flow and real estate value by providing valuation support Stronger margin profile Eliminates lease escalators
Slide 8: Pure-Play Private-Pay Senior Housing Model Similar to Multi-Family and Lodging
CSU’s Pure-Play Private-Pay Senior Housing Model has Many Similarities to the Multi-Family and Lodging Sectors, While Historically Providing Investors with Higher Returns Key Housing Sector Drivers Benchmarking the Housing Sector Senior Housing Yields Consistent High Investment Returns NCREIF Annual
Slide 9: The Senior Living Market Offers Attractive Long Term Fundamentals
The Senior Living Market Offers Attractive Long Term Fundamentals... U.S. population 75+ years old is expected to increase from ~6% of total current population to 12% by 2030 Current penetration rate implies demand growth of ~40K units per annum 75% of the Independent Living market and 63% of the As
Slide 10: A Highly Constructive Current Operating Environment
...and a Highly Constructive Current Operating Environment Source: NIC MAP Data Service as of 09/30/17. Occupancy Stabilizing Across the Country AL Rent is Stabilizing as IL Experiences Lower Growth Average Stabilized Occupancy YoY Rent Growth Senior Housing IL AL Industry Supply is Stabilizing in I
Slide 11: Limited Exposure to Top MSAs with Highest Construction
CSU Has Limited Exposure to the Top 10 MSAs with the Highest Levels of Construction Source: NIC MAP Data Service data as of 09/30/2017. Senior Housing Construction vs. Inventory Across the U.S. Top 10 Highest Construction in MSAs Total CSU units in top 10 highest construction MSAs (~2% of total CSU
Slide 12: Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership
Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership 2
Slide 13: Growth Strategy: Conversions, Acquisitions, Organic Growth, Ownership
Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership Conversions Accretive Acquisitions Core Organic Growth Increasing Real Estate Ownership
Slide 14: Core Organic Growth Driven by Occupancy, Pricing and Cost Containment
Core Organic Growth Driven by Occupancy, Pricing Improvements and Cost Containment Occupancy improvement where opportunity exists Increasing average rents through increasing market and in-house rents and level of care charges Proactive expense management Cash flow enhancing renovations and refurbish
Slide 15: Taking Immediate Action to Drive Sustainable Profitable Growth
Taking Immediate Action to Drive Sustainable Profitable Growth and Enhance Shareholder Value Executing comprehensive strategy to drive higher revenues, enhance cash flow and maximize value of real estate portfolio Instituting new operating model and realigning sales team to instill greater accountab
Slide 16: Moving to Centralized Platform to Improve Community Operations
Moving to Centralized Platform to Improve Community Operations While Serving New Residents Implemented immediate occupancy growth plans and budget recovery goals for each community Leveraging operational scale to optimize supply chain and large expense categories Revised sales and marketing structur
Slide 17: Upholding Highest Standards of Core Pillars to Improve Resident Experience
Upholding Highest Standards of Core Pillars to Improve Resident Experience Continuously focused on improving resident satisfaction by upholding the highest quality standards for each community through standardized processes, protocols and policies We maintain a family-centered culture so all residen
Slide 18: Strategic Accretive Acquisitions Achieved 16% Average Cash-On-Cash Returns
Strategic Accretive Acquisitions have Achieved 16% Average Cash-On-Cash Returns Year 1 Cash-On-Cash Returns With a strong reputation among sellers, CSU sources the majority of acquisitions off market and at attractive terms, and maintains a robust pipeline of near-to medium-term targets Acquisitions
Slide 19: Increasing Owned Portfolio Provides Increased Financial Flexibility
Increasing Owned Portfolio Provides Increased Financial Flexibility CSU has achieved on average a 42.0% increase in property value over a 3 year period at communities on which it has executed supplemental loans in 2015 and 2016, which has provided financial flexibility through $66.3mm of proceeds fo
Slide 20: Conversions Drive Significant Improvements in Key Financial Metrics
Conversions Drive Significant Improvements in Key Financial Metrics Revenue and NOI Growth – 3Q17 vs. 2Q14 (Period prior to Conversions)(1) Expected Completion of Units Out of Service (2) 776 total units were out of service at the beginning of 2017; when stabilized, the total 776 units are currently
Slide 21: Capital Plan Supports Long-Term Growth Initiatives
Capital Plan Supports Long-Term Growth Initiatives 3
Slide 22: Transaction Overview
Transaction Overview Overview of the Transaction CSU purchased four previously leased properties in January 2017 Purchase Price: $85mm CFFO accretion of $3.0mm in Year 1 Percentage of Owned Real Estate Owned % 129 Total Properties 129 Total Properties 61.2% 64.3% Benefits of the Transaction Maximize
Slide 23: Track Record of Strong Growth and Uniquely Positioned for Continued Success
Track Record of Strong Growth and Uniquely Positioned for Continued Success 4
Slide 24: Strategy and Execution Have Delivered Strong Growth
Strategy and Execution Have Delivered Strong Growth Revenue (1) Adjusted EBITDAR Adjusted CFFO (2) Note: $ in millions. Excludes community reimbursement revenue and management services revenue. (2)Excludes prepaid resident rent and tax savings related to cost segregation studies in 2012 and 2013. ($
Slide 25: Healthy Balance Sheet to Support Future Initiatives
Healthy Balance Sheet to Support Future Initiatives Assets Cash and Securities $ 22.6 Other Current Assets 25.5 Total Current Assets 48.1 Fixed Assets 1,105.3 Other Assets 18.2 Total Assets $ 1,171.6 Liabilities & Equity Current Liabilities $ 75.7 Long-Term Debt 935.3 Other Liabilities 75.7 Total Li
Slide 26: Debt Maturities
Debt Maturities CSU has ample financial capacity to pursue all initiatives contemplated under its growth strategy No near term debt maturities Acquisitions financed with attractive fixed rate non-recourse mortgage loans Average duration of debt is 6.6 years, with approximately 92% of all debt maturi
Slide 27: Capital Senior Living Investment Rationale
Capital Senior Living Investment Rationale Attractively Positioned in the Highly Fragmented Senior Housing Market Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership Capital Plan Supports Long-Term Growth Initiatives Track Record of Strong Growth and Uniquely Pos
Capital Senior Living — Q3 2017 Earnings Presentation on 6ix