Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Bank of America Presentation December 4-5, 2012
26 slides from Sabra Health Care Reit's conference presentation, Dec 3, 2012
Slide 1: Bank of America Presentation December 4-5, 2012
Bank of America Presentation December 4-5, 2012
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 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 also include all stat
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, adjusted EBITDA, EBITDAR, EBITDARM, funds from operations (“FFO”) and adjusted FFO (“AFFO”). These measures may be different than non-GAAP financial me
Slide 4: Strategic Overview
Strategic Overview ASABRA —
Slide 5: Sun/Genesis Merger
SUN/GENESIS MERGER Large diversified tenant with annual revenue of approximately $5 billion and strong liquidity Genesis lease guarantee enhanced with tangible net worth covenant Improved lease terms Leases cross defaulted with Genesis’ term loan Annual rent bumps changed from lesser of CP
Slide 6: Focused Strategy Brings Results
6 FOCUSED STRATEGY BRINGS RESULTS • Capital provider of choice • High quality operators and developers • Regional and local operator focus Strategy • Deals < $100mm • Primary focus - Senior housing and memory care deals • Secondary Focus - SNF deals • Long-term, triple-net leases • RIDEA • Developme
Slide 7: Deploying Capital Selectively
7 0 1 2 3 4 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 N u m b er of P ro p ert ies P er T ra n sa ct io n $21.8mm $5.7mm $11.0mm $16.0mm $33.0mm(2) $7.2mm(3) DEPLOYING CAPITAL SELECTIVELY $5.3mm(1) $62.7mm $11.3mm $97.5mm $16.2mm $14.2mm $29.9mm $2.6mm $10.0mm (2) Senior Housin
Slide 8: Opportunistic Investing
OPPORTUNISTIC INVESTING 8 SNF AL / MC IL Acute Hospital Equity Mezzanine Debt Mortgage Debt RIDEA Development Creative approaches to meet operators’ needs
Slide 9: Growing Strong Tenant Relationships
9 GROWING STRONG TENANT RELATIONSHIPS Region Public or private Asset focus Cadia NE Private SNF Aurora NE Private SNF Meridian (1) SW Private SNF/AL Stoney River/First Phoenix (2) MW Private AL, Memory Care New Dawn (3) SW Private Memory Care Trinity MW/NE Private SNF (1) On November 30, 2012 Sabra
Slide 10: Recent Acquisitions
10 Property Type: Skilled Nursing Location: Minnesota Investment Type: Equity Purchase Price: $7.2 mm Available Beds: 87 Annualized GAAP Rental Income: $0.9 mm Initial Cash Yield: 10.0% Camden Care Center (Closed November 2012) * * * Recent growth generated through repeat business with
Slide 11: Impact of Acquisitions: Tenant Diversification
11 As of December 31, 2010 Tenant Diversification Through Growth Sabra’s Annualized Revenue By Tenant IMPACT OF ACQUISITIONS As of September 30, 2012 As Adjusted (1) (1) Includes completed acquisitions through November 30, 2012 but excludes the impact of the Sun/Genesis merger.
Slide 12: Impact of Acquisitions: Asset Class Diversification
12 Asset Class Diversification Through Growth Sabra’s Annualized Revenue By Asset Class IMPACT OF ACQUISITIONS As of December 31, 2010 As of September 30, 2012 Skilled Nursing/Post Acute Acute Care Hospital Senior Housing/Memory Care As Adjusted (1) (1) Includes completed acquisitions through Novemb
Slide 13: Sabra's Portfolio
13 Sabra’s Portfolio
Slide 14: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 13.6% 12.4% 12.0% 9.5% 8.9% 7.0% 4.7% 4.7% 27.2% Texas Connecticut New Hampshire Delaware Kentucky Florida Ohio Montana Other States 112 Investments in 27 States $111.7 mm Annualized Revenue (1) Number of assets by state 14.3% 13.4% 11.6% 7.1% 8.9% 4.5% 4.5% 3.6% 3.6% 28.5
Slide 15: Rent Coverage Analysis
RENT COVERAGE ANALYSIS 15 (1) All coverages are calculated one month in arrears. (2) Excluding the impact of Age Well (formerly known as Creekside), which was not stabilized as of September 30, 2012, for the three months ended September 30, 2012, EBITDARM and EBITDAR coverages for Senior Housing fac
Slide 16: Strong Portfolio Performance
16 Historical overall occupancy(1) Historical SNF portfolio skilled mix(1) (2) STRONG PORTFOLIO PERFORMANCE (as of September 30, 2012) 41.7% 37.9% 42.1% 36.3% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% Trailing 12 Months, Q3 2011 Trailing 12 Months, Q3 2012 Q3 2011 Q3 2012 88.7% 89.0% 88.3% 88.3% 85.
Slide 17: Financial Overview
17 Financial Overview
Slide 18: Recent Financing Highlights
RECENT FINANCING HIGHLIGHTS 18 Issued $100 million of 8.125% senior notes in Q3 at 106.0% (6.9% yield-to-maturity) Repaid revolving credit facility balance of $42.5 million Increased total revolving credit facility commitment to $230 million in Q3 Pro forma weighted average effective interest
Slide 19: Financial Results: Revenue and G&A
FINANCIAL RESULTS 19 Revenue(1) Leveraging G&A Expenses $17.6 $17.6 $17.6 $17.7 $18.0 $18.0 $18.0 $18.0 $1.2 $3.9 $8.6 $5.7 $7.8 $8.0 $10.0 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 Q1 2 0 1 1 Q2 2 0 1 1 Q3 2 0 1 1 Q4 2 0 1 1 Q1 2 0 1 2 Q2 2 0 1 2 Q3 2 0 1 2 A d ju st e d Q 3 201 2 Sun Other Sources $26
Slide 20: Financial Results: EBITDA and FFO/AFFO
$14.9 $15.9 $16.9 $22.1 $19.4 $21.6 $22.3 $24.1 $- $6.3 $12.5 $18.8 $25.0 Q1 2 0 1 1 Q2 2 0 1 1 Q3 2 0 1 1 Q4 2 0 1 1 Q1 2 0 1 2 Q2 2 0 1 2 Q3 2 0 1 2 A d ju st e d Q 3 2 0 1 2 EBITDA Adjusted EBITDA FINANCIAL RESULTS 20 FFO/ Normalized AFFO (2) (dollars in millions) (1) EBITDA and Adjusted EBITDA f
Slide 21: Financial Strength
2.49x 2.18x 1.85x 1.76x 1.67x 2.03x 1.53x 1.52x 3.47x 3.07x 2.60x 2.50x 2.37x 2.26x 3.15x 3.02x 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 Q2 2012 Q3 2012 Adjusted Q3 2012 Secured Leverage Unsecured Leverage FINANCIAL STRENGTH 21 LTM Consolidated Debt to
Slide 22: Capital Structure Poised for Growth
CAPITAL STRUCTURE POISED FOR GROWTH Liquidity totaling $232.1 million as of September 30, 2012 (pro-forma liquidity of $191.9 million (1)) Low leverage provides capital structure flexibility Accordion feature on revolving credit facility Strong high yield market Opportunistically access eq
Slide 23: Virtuous Cycle
23 Make accretive investments Diversify from Sun Diversify payor sources Lower risk Lower cost of capital and enhance competitive position Higher AFFO VIRTUOUS CYCLE
Slide 24: Appendix
Appendix ASABRA
Slide 25: Debt Covenants
DEBT COVENANTS (1) 25 (1) Based on defined terms in the senior notes indenture and amended credit agreement. (2) Assumes all acquisitions through November 30, 2012 and the refinance of one mortgage note. Also adjusted to give effect to the payoff of a $4.4 million mortgage note subsequent to Septemb
Slide 26: Reconciliation of Net Income to EBITDA, FFO and AFFO
26 Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO (1) Adjusted for the impact of all acquisitions through November 30, 2012, to give effect to the $100 million add-on 8.125% senior notes issued at 106.0%
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