Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — JMP Securities Research Conference 2012
26 slides from Sabra Health Care Reit's conference presentation, May 14, 2012
Slide 1: JMP Securities Research Conference Company Presentation
JMP SECURITIES RESEARCH CONFERENCE COMPANY PRESENTATION May 14, 2012
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 This presentation contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified, without limitation, by the use of “expects,” “believes,” “intends,” “should” or comparable terms or the negativ
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES 3 This presentation includes the following financial measures defined as non-GAAP financial measures by the SEC: EBITDA, EBITDAR, EBITDARM, funds from operations (“FFO”), adjusted FFO (“AFFO”) and normalized AFFO, FFO per diluted share, AFFO per diluted share and normaliz
Slide 4: Strategic Overview
Strategic Overview ASABRA
Slide 5: Focused Strategy Brings Results
5 FOCUSED STRATEGY BRINGS RESULTS • Capital provider of choice • High quality operators and developers • Regional and local operator focus Strategy • Deals < $100mm • Senior housing/ post- acute/ SNF deals • Long-term, triple-net leases • RIDEA • Development Tactics • Broader tenant base • Portfolio
Slide 6: Virtuous Cycle
6 Make accretive investments Diversify from Sun Diversify payor sources Lower risk Lower cost of capital and enhance competitive position Higher AFFO VIRTUOUS CYCLE
Slide 7: Deploying Capital Selectively
7 0 1 2 3 4 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 N u m b er of P ro p ert ies P er T ra n sa ct io n DEPLOYING CAPITAL SELECTIVELY $5.3mm(1) $62.7mm $11.3mm $97.5mm $18.0mm $14.2mm $29.9mm $2.6mm $10.0mm(2) Senior Housing Skilled Nursing/ Post-Acute Care Hospital (1) On December 5, 2011,
Slide 8: Impact of Acquisitions
8 Sun 100.0% Sun 73.4% Texas Regional Medical Center 6.7% Cadia Portfolio 10.8% Aurora Portfolio 2.3% Pennsylvania Subacute Portfolio 3.5% Other 3.3% As of December 31, 2010 As of March 31, 2012 Acquisitions: tenant diversification through growth Sabra’s Annualized Rental Revenue By Tenant IMPACT OF
Slide 9: Opportunistic Investing
OPPORTUNISTIC INVESTING 9 SNF ALF ILF Acute Hospital Equity Mezzanine Debt Mortgage Debt RIDEA Development Creative approaches to meet operators’ needs
Slide 10: Growing Strong Tenant Relationships
10 GROWING STRONG TENANT RELATIONSHIPS Region Public or private Asset focus Cadia NE Private SNF, Memory Care Aurora NE Private SNF Meridian(1) SW Private SNF (1) Sabra currently has a mezzanine loan with Meridian, with an option to purchase three skilled nursing facilities and one assisted living f
Slide 11: Accretive Investments Lead to Increasing Stockholder Value
11 $9,367 $10,308 $12,529 $13,668 $13,999 $- $4,000 $8,000 $12,000 $16,000 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 No rma liz ed A FF O Normalized AFFO ACCRETIVE INVESTMENTS LEAD TO INCREASING STOCKHOLDER VALUE $0 $8,044 $11,798 $11,798 $12,213 Dividends Paid (absolute value)
Slide 12: Sabra's Portfolio
12 Sabra’s Portfolio
Slide 13: Current Portfolio
CURRENT PORTFOLIO (as of March 31, 2012) 1 3 3 2 2 4 4 5 2 1 1 2 13 2 1 8 2 13 3 2 10 States with existing facilities (total: 99 equity & 1 mezzanine loan) Senior Housing (total: 9) Skilled Nursing/ Post-Acute (total: 89) Key real estate portfolio information Equity Investments Skilled Nursing/Pos
Slide 14: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION New Hampshire Connecticut Kentucky Ohio Florida Texas Montana Delaware Other States 100 investments in 24 states $99.1 mm annualized revenue 13.1% 11.9% 10.0% 5.3% 7.9% 10.7% 25.1% Number of assets by state 5.3% New Hampshire Connecticut Kentucky Ohio Florida Texas Montana
Slide 15: Rent Coverage Analysis
RENT COVERAGE ANALYSIS 15 (1) All coverages are calculated one month in arrears. (2) Sun’s Tenant EBITDAR Coverage for the three months and twelve months ending March 31, 2012 was 1.32x and 1.61x, respectively. On January 4, 2012, Sun issued a press release announcing its 2012 financial outlook and
Slide 16: Strong Portfolio Performance
16 Consolidated Tenant EBITDAR coverage(1) Historical overall occupancy Historical SNF portfolio skilled mix(2) STRONG PORTFOLIO PERFORMANCE (as of March 31, 2012) 1.78x 1.70x 1.60x 0.00x 0.50x 1.00x 1.50x 2.00x FY 2011 Q1 2011 Q1 2012 41.4% 40.9% 38.4% 35.0% 37.0% 39.0% 41.0% 43.0% 45.0% FY 2011 Q1
Slide 17: Financial Overview
17 Financial Overview
Slide 18: Financing Highlights
FINANCING HIGHLIGHTS 18 Proven track record of access to capital to fund growth Moody’s increased credit rating from B2 to B1 (stable) (April 2012) Amended mortgage indebtedness of $58.9 million reducing pricing by 50 bps (May 2010) Credit facility amended to expand to $200 million (plus $150 millio
Slide 19: Financial Results
FINANCIAL RESULTS 19 FFO/ Normalized AFFO(1) AFFO/share & Dividend/share $0.35 $0.40 $0.38 $0.41 $0.38 $0.40 $0.32 $0.32 $0.32 $0.33 $0.33 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Pro Forma Q1 2012 AFFO/share Dividend/share (dollars in milli
Slide 20: Financial Results: Revenue and G&A
FINANCIAL RESULTS 20 Revenue(1) Leveraging G&A expenses $17.6 $17.6 $17.6 $17.7 $18.0 $18.0 $1.2 $3.9 $8.6 $5.7 $6.8 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Pro Forma Q1 2012 Sun Other Sources $1.2 $1.4 $1.3 $1.1 $1.6 $1.6 $0.3 $1.4 $1.1 $1.3 $0.8 $1.4 $2.2 $2.2
Slide 21: Financial Strength
FINANCIAL STRENGTH 21 Consolidated leverage Interest coverage Debt maturities Capital structure(1) 2.66x 2.64x 2.62x 2.59x 2.55x 3.30x 2.61x 1.83x 1.67x 1.49x 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x 7.00x Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Secured Leverage Unsecured Leverage 2.28x 2.97x 3.11x
Slide 22: Capital Structure Poised for Growth
CAPITAL STRUCTURE POISED FOR GROWTH $200 million revolver Low leverage provides capital structure flexibility Accordion feature on revolver of $150 million High yield market (add on or new issue) Opportunistically access equity markets Common or preferred Consider ATM program Efficie
Slide 23: FY 2012 Guidance
FY 2012 GUIDANCE(1) 23 Low High Net income from continuing operations 0.64$ 0.68$ Add: Depreciation and amortization 0.89 0.90 FFO 1.53$ 1.58$ Straight line rent adjustment (0.13) (0.14) Stock based compensation 0.18 0.18 Amortization of deferred financing costs 0.09 0.09 Acquisition pursuit costs 0
Slide 24: Virtuous Cycle
24 Make accretive investments Diversify from Sun Diversify payor sources Lower risk Lower cost of capital and enhance competitive position Higher AFFO VIRTUOUS CYCLE
Slide 25: Appendix
25 Appendix
Slide 26: Reconciliation of Net Income to EBITDA, FFO, AFFO and Normalized AFFO
26 Reconciliation of Net Income to EBITDA, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO Q1 Q2 Q3 Q4 Actual Pro Forma (1) Net income $ 1.2 $ 2.1 $ 2.3 $ 7.2 $ 4.4 $ 5.3 Interest expense 7.6 7.5 7.7 7.6 7.7 7.7 Depreciation and amortization 6.1 6.3 6.9 7.3 7.3
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