Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Bank of America Merrill Lynch 2011 Global Real Estate Conference
24 slides from Sabra Health Care Reit's conference presentation, Sep 7, 2011
Slide 1: Bank of America Merrill Lynch 2011 Global Real Estate Conference
Bank of America Merrill lynch 2011 global real estate conference
Slide 2: Forward-looking statements
Certain information contained in this presentation includes forward-looking statements. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements th
Slide 3: Non-GAAP financial measures
This presentation includes the following financial measures defined as non-GAAP financial measures by the SEC: EBITDARM, EBITDAR, EBITDA, Adjusted EBITDA, funds from operations (“FFO”), adjusted FFO (“AFFO”) and normalized AFFO. These measures may be different than non-GAAP financial measures used b
Slide 4: Company Overview & Investment Highlights
Company Update & Investment Highlights
Slide 5: Company overview
Formed by Opco / Propco split of Sun Healthcare Group Independently traded as of November 2010 (NASDAQ: SBRA) Structured as an UPREIT B/B2 rating (S&P / Moody’s) 93 health care investments (1) 72 skilled nursing facilities 86 leased to Sun Presence in 22 states $424.0 mm equity market cap (1) $805.4
Slide 6: Capital provider of choice to smaller operators
Few capital providers serving the smaller operators Over 90% of senior housing facilities are owned in portfolios of less than 10 properties (1) Larger health care REITs have made transformational deals and grown significantly Limited debt sources for Sabra deal size candidates Experience provides a
Slide 7: Sale/leaseback transactions strategy
Sale/ leaseback transactions Focus on deals < $100 mm Triple net lease structure Broad spectrum of properties: senior housing, skilled nursing facilities and hospitals Diversification from original tenant Exposure to diverse property types within healthcare sector Increased AFFO Lower cost of capita
Slide 8: Acquisition activity since inception
Acquisitions yield Diversification Strong acquisition activity since inception with $176.8 million of capital invested to date 4 new operator relationships 7 new assets in 3 new states (5 SNFs, 1 Hospital and 1 Debt Investment) Steady pipeline across spectrum of health care real estate Sabra formed
Slide 9: Investment Highlights: Cadia Portfolio
$97.5 million acquisition of 4 skilled nursing facilities in a sale leaseback transaction Year 1 cash rent of $8.5 million, 8.75% initial cash yield 1.71x Facility EBITDAR coverage (1) 15-year triple-net lease with two five-year renewal options 3.0% contractual annual rent escalators resulting in $1
Slide 10: Investment highlights: TRMC and Oak Brook
Investment highlights Texas Regional Medical Center at Sunnyvale (Closed May 3, 2011) Purchase Price: $62.7mm Investment Type: Equity Property Type: Acute Care Hospital Available Beds: 70 Facility Age: 2 years Facility EBITDAR (1) : $17.66mm Facility EBITDARM (1) : $18.26mm Facility EBITDARM Margin
Slide 11: Impact of acquisitions: revenue by asset class
IMPACT OF ACQUISITIONS (as of June 30, 2011) Acquisitions are changing the revenue makeup of our portfolio Sabra’s Annual Revenue By Asset Class $176.8 million of invested capital leads to: Annualized normalized AFFO increase from $37.5 million to $52.9 million (41% increase) Invested capital from i
Slide 12: Impact of acquisitions: revenue by tenant
IMPACT OF ACQUISITIONS (as of June 30, 2011) Acquisitions are changing the Acquisitions are changing the revenue makeup of our portfolio revenue makeup of our portfolio Sabra’s Annual Revenue By Tenant Pro Forma assumes Cadia Portfolio acquisition occurred on January 1, 2011.
Slide 13: SNF Medicare Reimbursement Update
SNF Medicare Reimbursement Update July 29, 2011: CMS releases final rule of a 11.1% cut for FY 2012 SNF Medicare rates EBITDARM Coverage (x) EBITDAR Coverage (x) Sabra’s Portfolio (as of June 30, 2011) TRMC Oak Brook Cadia Portfolio 1.74x 1.69x 2.48x 1.42x 1.73x 1.27x 1.18x 2.41x 1.18x 1.34x Sabra I
Slide 14: Sabra's Portfolio & Primary Tenant
III. Sabra’s Portfolio & Primary Tenant
Slide 15: Strong occupancy and skilled mix trends
Strong occupancy and skilled mix trends in Sabra’s portfolio Historical Skilled Nursing/ Healthcare Facilities Occupancy (1) STRONG PORTFOLIO PERFORMANCE Strong occupancy and skilled mix trends in Sabra’s portfolio Historical Skilled Nursing/ Healthcare Facilities Occupancy (1) Historical Senior Hou
Slide 16: Property diversification
PROPERTY DIVERSIFICATION (as of August 31, 2011) 1 Equity Investments: 92 total CCRC (total: Multi-Licensed Mental Health Assisted Living (total: 5) Skilled Nursing (total: 72) Independent Living (total: 1) Key real estate portfolio information (as of August 31, 2011) Investments: Equity Investments
Slide 17: Geographically diverse portfolio
(1) Sabra had 88 equity investments in 20 states and 1 debt investment in 1 state as of June 30, 2011. The above includes the Cadia Portfolio acquisition for a total of 93 investments in 22 states as of August 31, 2011. (2) The above information refers to Sabra’s licensed beds in 88 equity investmen
Slide 18: Primary tenant overview
PRIMARY TENANT OVERVIEW (as of June 30, 2011) Key Sun portfolio information (as of June 30, 2011) Sun operates 199 inpatient centers in 25 states Number of Centers: 199 Property Type: Skilled Nursing Multi-License Designation Assisted Living Mental Health Independent Living 165 (83%) 14 (7
Slide 19: Financially secure primary tenant
FINANCIALLY SECURE PRIMARY TENANT $148.1 million of liquidity as of June 30, 2011(2) 0.54x Net Debt-to-Adjusted EBITDA ratio*** * For the quarter ended June 30, 2011. **For the six months ended June 30, 2011. ***Based on net debt as of June 30, 2011 and annualized EBITDAR for the six months ende
Slide 20: Financial Overview
Financial Overview ASABRA
Slide 21: Financial highlights: income statement and other data
FINANCIAL HIGHLIGHTS Income statement and other data Revenues $ 18.8 $ 22.4 $ 36.4 $ 44.7 G&A costs 2.9 5.2 5.6 7.9 EBITDA 15.9 17.1 30.8 36.8 Net income 2.1 2.4 3.3 7.3 Adjusted EBITDA 17.4 20.9 33.6 41.9 FFO 8.4 9.6 15.7 21.7 AFFO 10.3 13.2 19.4 26.3 Normalized AFFO 10.3 13.2 19.7 26.6 Per share d
Slide 22: Financial highlights: balance sheet and other data
FINANCIAL HIGHLIGHTS Balance sheet and other data Cash $ 3.5 $ 67.6 Real Estate, Gross Book Value 643.7 741.2 Real Estate, Asset Value (2) 794.5 892.0 Mortgage Note Receivable 5.3 5.3 Total Debt 384.9 384.9 Total Equity 175.8 339.8 Capitalization 560.7 724.7 Liquidity 91.1 167.6 Debt Covenants (3) M
Slide 23: Investment highlights summary
Geographically Diverse Portfolio Attractive Industry Fundamentals Favorable Long-Term Lease Structure Strong Lease Coverage Strong Asset Coverage Financially Secure Primary Tenant Growth Opportunities Experienced Management Team
Slide 24: Reconciliation of net income to EBITDA, FFO and AFFO
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and Normalized AFFO Actual Pro Forma (1) Net income $ 2.1 $ 2.4 $ 3.3 $ 7.3 Interest expense 7.5 7.5 15.1 15.1 Depreciation and amortization 6.3 7.2 12.4 14.4 EBITDA $ 15.9 $ 1
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