Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Non-Deal Roadshow (May 2018)
37 slides from Sabra Health Care Reit's roadshow presentation, May 29, 2018
Slide 1: Dedicated to Value Creation, Committed to Our Operator Roots
DEDICATED TO VALUE CREATION, COMMITTED TO OUR OPERATOR ROOTS Non Deal Roadshow Chicago & Minneapolis May 30 - 31, 2018
Slide 2: Positioned to Perform
POSITIONED TO PERFORM Our operational expertise 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 our shareholders while promoting a high quality of care. May 30 - 31, 2018
Slide 3: We've Been Opportunistically Executing Our Strategy and It Shows
WE’VE BEEN OPPORTUNISTICALLY EXECUTING OUR STRATEGY AND IT SHOWS STRONG BALANCE SHEET SCALE Investment Grade1: BBB- / BBB- / Ba1 $7.4B Enterprise Value3 5.48x (5.97x with JV Debt) Leverage2 722 Properties / Investments in 45 States and Canada4 CONSISTENT GROWTH DIVERSIFIED PORTFOLIO 6% Normalized AF
Slide 4: Strategy quote from Rick Matros
STRATEGY “THE STRONGER SABRA YOU SEE TODAY IS THE PRODUCT OF CREATIVE AND TIMELY EXECUTION OF OUR STRATEGY.” – Rick Matros, Chief Executive Officer May 30 - 31, 2018 Non Deal Roadshow 4
Slide 5: Building a Better REIT by Investing in the Success of Our Partners
STRATEGY WE ARE BUILDING A BETTER REIT BY INVESTING IN THE SUCCESS OF OUR PARTNERS Investment . Invest in high-quality, strong-performing senior housing and SNF portfolios . Increase relationship diversification . Grow private-pay exposure . Develop purpose-built senior housing Finance . Maintain a
Slide 6: Who We Are Now Is Who We've Always Been
STRATEGY WHO WE ARE NOW IS WHO WE'VE ALWAYS BEEN— FOCUSED, OPPORTUNISTIC AND FORWARD-THINKING 2010 VS 2018 ENTERPRISE VALUE 1 INVESTMENTS 2 RELATIONSHIPS 2 $773.3M vs $7.4B 86 vs 722 1 vs 75 (1) Includes Sabra’s 49% pro rata share of the debt of its unconsolidated joint venture. Share price as of 5/
Slide 7: Strategy in Action
STRATEGY STRATEGY IN ACTION “WHEN IT COMES ““THEWE’VE CCP CONSISTENTLY MERGER, ASSET SALES, LEASE RESTRUCTURINGS AND ENLIVANT TRANSACTIONTO EXECUTING HAVE DELIVEREDMANAGED TO VALUE REDUCE TO TENANT CONCENTRATION,OUR STRATEGY, DE- OURLEVER SHAREHOLDERS THE BALANCE SHEET TO ACHIEVEWE AN DO WHAT WE WHI
Slide 8: Strategy in Action quote
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 May 30 - 31, 2018 Non Deal Roadshow 8
Slide 9: Excellent Execution: Signature Healthcare Restructuring
STRATEGY IN ACTION EXCELLENT EXECUTION SIGNATURE HEALTHCARE (“SIGNATURE”) RESTRUCTURING HIGHLIGHTS: . Term loan financing of up to $12M at a 7% interest rate for a period of 7 years to provide Signature with working capital. . Combined existing master leases into a single master lease with an 11-yea
Slide 10: Genesis Sales Roadmap
STRATEGY IN ACTION GENESIS SALES ROADMAP LEASED ANNUAL CASH REMAINING RENT AS A % OF 1 (dollars in millions) FACILITIES RENT PRO FORMA NOI Current Status2 48 $ 50.1 8.5% Expected Sales by Q4 2018 (5) (27.9) (under contract) Expected Sales by Q4 2018 (35) (1.6) (under letter of intent) Post sales sta
Slide 11: 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 12: Investment Thesis quote
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 May 30 - 31, 2018 Non Deal Roadshow 1
Slide 13: 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 14: 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 May 30 - 31, 2018 Non Deal Roadshow 14
Slide 15: Superior Returns Start with a Strong Portfolio
PORTFOLIO SUPERIOR RETURNS START WITH A STRONG PORTFOLIO 81% 87% 92% 2 83% 722 SNF/TC SH - Leased SH – Managed Hosp/Oth. Investments1 Average Occupancy Percentage1 75 38 % Relationships 1 Skilled Mix1 9 Hosp/Oth. 1.33x SNF/TC 1.09xSH - Leased 3.45x Years Wtd. Avg. Remaining Rent Coverage1 Lease Term
Slide 16: 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 29 $221M EXPECTED REAL ESTATE VALUE 1 $529M (1) Represents the value of completed projects at Sabra’s purchase price and the projected purchas
Slide 17: Effective Asset Management and Strong Operator Relationships
PORTFOLIO EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Senior Housing - Leased 14% Asset Mix Senior Housing - Managed We continually look for 10% opportunities to enhance the value of our real estate Specialty Hospitals and improve the quality of and Other care delivered. 8% Interest
Slide 18: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE May 30 - 31, 2018 Non Deal Roadshow 18
Slide 19: Operators quote from Cadia Healthcare
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 May 30 - 31, 2018 Non Deal Roadshow 19
Slide 20: Our Operators Are Driven by an Unwavering Passion
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 May 30 - 31, 2018 Non Deal Road
Slide 21: We Are a Partner in Our Operators' Success
OPERATORS WE OFFER MORE THAN JUST CAPITAL; WE ARE A PARTNER IN OUR OPERATORS’ SUCCESS We Improve Operating Efficiencies: We Invest In Our Mutual Success: . Share best practices . Redevelopment . Facilitate group purchasing . Expansion . Share operational expertise . Strategic development May 30 - 31
Slide 22: We Said We Were Going to Diversify Our Operator Base
OPERATORS WE SAID WE WERE GOING TO DIVERSIFY OUR OPERATOR BASE Relationship Concentration Senior Care Centers 10% Enlivant We’ve cultivated strong 8% relationships with leading regional care providers Genesis who share our passion for 8% delivering high-quality care. Avamere Other 7% 61% Signature 6
Slide 23: Leadership quote
LEADERSHIP “WHEN WE PUT OUR MINDS TO SOMETHING, WE GET IT DONE.” – Rick Matros, Chief Executive Officer May 30 - 31, 2018 Non Deal Roadshow 23
Slide 24: Our Care-Driven Approach Is as Unique as Our Leadership Team
OUR CARE-DRIVEN 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 Chief Executive Officer . Lean organizational structure Talya Nevo-Hacohen Chief Investment Office
Slide 25: Performance
PERFORMANCE “WE’VE CONSISTENTLY DELIVERED VALUE TO OUR STOCKHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” – Harold Andrews, Jr., Chief Financial Officer May 30 - 31, 2018 Non Deal Roadshow 25
Slide 26: Superb Execution of a Consistent Strategy Fuels Long-Term Growth
PERFORMANCE SUPERB EXECUTION OF A CONSISTENT STRATEGY FUELS LONG-TERM GROWTH 200% Total Shareholder Return 150% as of 5/24/2018 100% 98% Sabra 50% 62% 0% Healthcare REIT Composite1 -50% 68% SNL U.S. Healthcare REIT Equity -100% Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 SBRA SNL
Slide 27: Reliable Earnings Growth While Transforming Our Portfolio
PERFORMANCE RELIABLE EARNINGS GROWTH WHILE TRANSFORMING OUR PORTFOLIO $2.50 100% $2.31 $2.31 $2.26 90% $2.12 $2.14 80% $2.00 70% $1.77 $1.76 $1.68 $1.62 60% $1.59 $1.54 $1.51 $1.50 $1.38 50% $1.33 $1.29 40% 30% $1.00 20% 10% $0.50 0% 2011 2012 2013 2014 2015 2016 2017 2018 Guidance1 Normalized AFFO
Slide 28: Fortified Balance Sheet with Low Leverage and Enhanced Liquidity
PERFORMANCE FORTIFIED BALANCE SHEET WITH LOW LEVERAGE AND ENHANCED LIQUIDITY . Investment-grade balance sheet1: BBB- / BBB- / Ba1 . Primarily fixed rate (76.6%), unsecured borrowings2,3 . Cost of permanent debt is 4.1%4 . Well-laddered maturity schedule . More than $400 million of available liquidit
Slide 29: Balanced Capital Structure
PERFORMANCE BALANCED CAPITAL STRUCTURE Preferred Equity 1 Capital Structure 2% Our diverse menu of capital options ensures that we have ready access to low- cost capital to fund our Unsecured Debt TOTAL MARKET 42% growth. CAPITALIZATION Common Equity Our Credit Facility which includes a Value $1.0 b
Slide 30: Strong Investment Grade Credit Metrics
PERFORMANCE STRONG INVESTMENT GRADE CREDIT METRICS SABRA PRO INVESTMENT GRADE FORMA 1Q18 1 PEERS MEDIAN 2 Net Debt to Adjusted EBITDA 5.5x3 5.5x Net Debt to Adjusted EBITDA – 6.0x3 6.1x Incl. Unconsolidated Joint Venture Interest Coverage Ratio 4.2x 4.2x Debt as a % of Asset Value 49% 44% Secured De
Slide 31: Favorable Profile with Staggered Maturities
PERFORMANCE FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE1 (dollars in millions) $1,600 $1,149 $1,400 389 $1,200 $1,008 $1,000 611 $800 $587 $600 18 82 20 997 5 $400 $274 2 $211 $208 500 $194 500 $200 70 $103 104 200 200 3 $12 190 $3 103 100 $0 2018 2019 2020 2021 2022 2023 2024
Slide 32: Attractive Relative Valuation
PERFORMANCE ATTRACTIVE RELATIVE VALUATION Annualized FFO Multiples 1 Dividend Yield 22.0x 12.0% 9.0% 8.8% 9.5% 16.5x 13.3x 13.4x 12.3x 12.3x 13.0x 6.1% 6.4% 10.5x 7.0% 5.6% 5.7% 11.0x 5.1% 7.8x 4.5% 5.5x 2.0% 0.0x -0.5% SBRA 2 OHI HCP CTRE LTC NHI Big 2 SBRA CTRE NHI LTC Big 2 HCP OHI 3 Average 3 Av
Slide 33: Well-Positioned Portfolio
PERFORMANCE WELL-POSITIONED PORTFOLIO SNF CONCENTRATION 1 TOP FIVE RELATIONSHIP SNF RENT COVERAGE 1,3 CONCENTRATION 1 1.70x 1.66x 86% 71% 83% 68% 1.33x 1.33x 1.34x 66% 56% 60% 39% 38% 30% SBRA 2 NHI LTC OHI CTRE SBRA 2 OHI LTC NHI CTRE SBRA 4 LTC OHI NHI CTRE (1) Represents latest available concentr
Slide 34: Appendix
APPENDIX May 30 - 31, 2018 Non Deal Roadshow 34
Slide 35: FFO Reconciliation
APPENDIX FFO RECONCILIATION (Dollars in thousands, except per share amounts) Three Months Ended March 31, 2018 Net income attributable to common stockholders $ 59,910 Depreciation and amortization of real estate assets and real estate assets related to 47,965 noncontrolling interests Depreciation an
Slide 36: Definitions
APPENDIX DEFINITIONS 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.
Slide 37: 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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