Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — 23rd Annual Wells Fargo Real Estate Securities Conference 2020
32 slides from Sabra Health Care Reit's conference presentation, Feb 25, 2020
Slide 1: A Strong Foundation for Growth
A STRONG FOUNDATION FOR GROWTH 23rd Annual Wells Fargo Real Estate Securities Conference February 25-26, 2020
Slide 2: Poised for Growth
POISED FOR GROWTH Our vast industry knowledge, experienced executive team 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 shareholders. February 25-26, 2020 23rd Annual W
Slide 3: Strategy
STRATEGY “OUR STRONG BALANCE SHEET AND DIVERSE PORTFOLIO PROVIDE THE FOUNDATION FOR CONTINUED GROWTH.” – Rick Matros, Chief Executive Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 3
Slide 4: Sabra Today
STRATEGY SABRA TODAY 36% 69 $7.3B1 DEBT/ASSET VALUE OPERATOR RELATIONSHIPS ENTERPRISE VALUE $1B+ 10% 27.6% LIQUIDITY MAX RELATIONSHIP NOI CAGR SINCE 2011 CONCENTRATION (1) Includes Sabra’s 49% pro rata share of the debt of its unconsolidated joint venture. Share price as of 2/21/2020. February 25-26
Slide 5: Building a Resilient and Agile REIT
STRATEGY BUILDING A RESILIENT AND AGILE REIT Investment . Invest in high-quality, strong-performing senior housing and SNF portfolios . Relationship diversification . Geographic diversification (investments in 44 states and Canada) . Grow private-pay through investments in high-quality managed senio
Slide 6: Strategy in Action
STRATEGY IN ACTION “BY OPPORTUNISTICALLY EXECUTING OUR STRATEGY, WE CONTINUE TO DELIVER LONG-TERM VALUE FOR OUR SHAREHOLDERS.” – Talya Nevo-Hacohen, Chief Investment Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 6
Slide 7: Strengthened Balance Sheet by Reducing Leverage
STRATEGY IN ACTION STRENGTHENED BALANCE SHEET BY REDUCING LEVERAGE Lowered cost of PERMANENT DEBT by 49 basis points to 3.79% 34 vs 72 Reduced NET DEBT TO ADJUSTED EBITDA ratio (including our unconsolidated joint venture) from 6.12x to 5.38x (1) Includes Sabra’s 49% pro rata share of the debt of its
Slide 8: Significantly Improved Credit Metrics
STRATEGY IN ACTION SIGNIFICANTLY IMPROVED CREDIT METRICS INTEREST COVERAGE FIXED CHARGE COVERAGE TOTAL DEBT/ASSET VALUE + 1.10x to 5.28x + 1.03x to 5.08x IMPROVED 700 bps DECEMBER 31, 2018 vs DECEMBER 31, 2019 February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 8
Slide 9: 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 10: Investment Thesis
INVESTMENT THESIS “WE CRAFT CUSTOM FINANCIAL SOLUTIONS THAT ALLOW OPERATORS TO DELIVER HIGH-QUALITY CARE.” – Talya Nevo-Hacohen, Chief Investment Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 10
Slide 11: Opportunistically Sourced, Creatively Structured and Prudently Financed
INVESTMENT THESIS OPPORTUNISTICALLY SOURCED, CREATIVELY STRUCTURED AND PRUDENTLY FINANCED 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 c
Slide 12: Portfolio
PORTFOLIO “OUR PORTFOLIO IS POSITIONED TO DELIVER QUALITY CARE NOW AND IN THE FUTURE.” – Peter Nyland, Executive Vice President Asset Management February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 12
Slide 13: Superior Returns Start with a Strong Portfolio
PORTFOLIO SUPERIOR RETURNS START WITH A STRONG PORTFOLIO AS OF DECEMBER 31, 2019 SNF/TC SH - Leased SH - Managed 2 Hosp/Oth. 82% 87% 88% 71% 627 Investments1 Average Occupancy Percentage 69 38 % Relationships 1 Skilled Mix1 SNF/TC/Hosp/Oth. SH - Leased 8 1.88x 1.37x Years Wtd. Avg. Remaining Rent Co
Slide 14: 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 25 $295M EXPECTED REAL EXPECTED INITIAL CASH ESTATE VALUE 1 YIELD ON RENTS $488M 7.5% (1) Represents the value of completed projects at Sabra’
Slide 15: Effective Asset Management and Strong Operator Relationships
PORTFOLIO EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Senior Housing - Managed 17% Asset Mix 1 Crafted portfolio of high- Senior Housing - quality and diverse Leased facilities passionate about 10% care. Specialty Hospitals Skilled Nursing / and Other Transitional Care 10% 61% Inter
Slide 16: High Quality of Care, Strong Performance
HIGH QUALITY OF CARE STRONG PERFORMANCE February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 16
Slide 17: Our Operators Are Driven by Passion for Quality of Care
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 February 25-26, 2020 23rd Annua
Slide 18: We Support Our Operators
OPERATORS WE SUPPORT OUR OPERATORS We Invest in Our Mutual Success: . Redevelopment . Expansion . Strategic development . Flexible equity and debt capital solutions February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 18
Slide 19: Strategy in Action: Operators
STRATEGY IN ACTION OPERATORS “WHEN IT COMES “WE’VE CONSISTENTLY “ONE OF THE MANY ADVANTAGES OFTO WORKING EXECUTING DELIVERED VALUE TO OUR STRATEGY, OURWITH SHAREHOLDERS SABRA IS THAT THEY GET WHATWE IT’S DO WHATLIKE TO WE WHILEBE AN MAINTAININGOPERATOR .” A SAY WE ARE STRONG BALANCE - Brent Weil, Pr
Slide 20: Free Access to Industry-Leading Business Intelligence Tools
OPERATORS DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 20
Slide 21: PointRight Program for SNF Tenants
OPERATORS POINTRIGHT PROGRAM FOR SNF TENANTS Data Integrity Audit Real-time MDS verification analyzes the accuracy of the Minimum Data Set (MDS) assessment prior to CMS submission. Each MDS is checked for logical and clinical coding accuracy, with recommended actions when inaccurate, incomplete, or
Slide 22: Diverse Operator Base, Passionate About Care
OPERATORS DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE Relationship Concentration 1 Enlivant 10% Avamere By diversifying our tenant 8% concentration, we’ve curated a portfolio North American equipped to perform in 7% today’s dynamic health care market. Signature Healthcare 7% Other 61% Cadia 7% (1)
Slide 23: Performance
PERFORMANCE “WE’VE DELIVERED ON OUR PROMISE TO STRENGTHEN OUR BALANCE SHEET, AND ARE POISED TO CAPITALIZE ON FUTURE GROWTH OPPORTUNITIES.” – Harold Andrews, Jr., Chief Financial Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 23
Slide 24: Fortified Balance Sheet with Focus on Lowering Leverage
PERFORMANCE FORTIFIED BALANCE SHEET WITH FOCUS ON LOWERING LEVERAGE AND ENHANCING LIQUIDITY . Investment-grade balance sheet 1: BBB- / BBB- / Ba1 . Primarily fixed rate, unsecured borrowings (78.3%)2 . Cost of permanent debt is 3.79% 3 . Well-laddered maturity schedule . More than $1 billion of avai
Slide 25: Balanced Capital Structure
PERFORMANCE BALANCED CAPITAL STRUCTURE Capital Structure 1 Our diverse menu of capital Common Equity Value options ensures that we 62% have ready access to low- Unsecured Debt cost capital to fund our 31% growth. ENTERPRISE VALUE Our Credit Facility, which includes a $1.0 billion Revolving Credit Fa
Slide 26: Strong Investment Grade Credit Metrics
PERFORMANCE STRONG INVESTMENT GRADE CREDIT METRICS 1 SABRA 4Q19 INVESTMENT GRADE 2 PEERS MEDIAN LTM Net Debt to Adjusted EBITDA 4.89x 3 5.88x LTM Net Debt to Adjusted EBITDA - Incl. Unconsolidated Joint 5.38x 3 5.90x Venture Interest Coverage Ratio 5.28x 4.58x Debt as a % of Asset Value 36% 42% Secu
Slide 27: Favorable Profile with Staggered Maturities
PERFORMANCE FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE AT DECEMBER 31, 2018 (dollars in millions) $1,600 $1,156 $1,400 376 $1,200 $1,001 $1,000 Available Line of Credit $800 624 Line of Credit $585 $600 18 Mortgage Debt / Secured Debt 81 13 992 $400 Sabra's Share of Uncons. JV
Slide 28: Attractive Relative Valuation
PERFORMANCE ATTRACTIVE RELATIVE VALUATION 2019 FFO Multiples 1 Dividend Yield 25.0x 10.0% 21.1x 8.2% 20.0x 18.7x 8.0% 17.1x 16.1x 16.5x 14.5x 6.0% 15.0x 6.0% 11.6x 4.5% 4.6% 4.6% 3.9% 4.0% 10.0x 4.0% 5.0x 2.0% 0.0x 0.0% SBRA OHI NHI LTC CTRE Big 2 PEAK SBRA CTRE PEAK Big 2 2 LTC NHI OHI Average2 Ave
Slide 29: Well-Positioned Portfolio
PERFORMANCE WELL-POSITIONED PORTFOLIO SNF CONCENTRATION 1 TOP FIVE RELATIONSHIP SNF RENT COVERAGE 1,3 CONCENTRATION 1 85% 83% 2.73x 68% 66% 2.38x 61% 59% 53% 1.72x 1.75x 1.66x 39% 38% 27% 2 2 4 SBRA NHI LTC OHI CTRE SBRA OHI LTC CTRE NHI SBRA OHI LTC CTRE NHI (1) Represents latest available concentr
Slide 30: Appendix
APPENDIX February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 30
Slide 31: 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 32: 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
Sabra Health Care REIT — 23rd Annual Wells Fargo Real Estate Securities Conference 2020 on 6ix