Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — 2015 NAREIT REITweek Conference
32 slides from Sabra Health Care Reit's conference presentation, Jun 9, 2015
Slide 1: 2015 NAREIT REITWeek Conference
2015 NAREIT REITWeek Conference June 9, 2015 Relationship driven. Investor focused.
Slide 2: Canadian Portfolio Acquisition
Canadian Portfolio Acquisition
Slide 3: Canadian Portfolio Acquisition: Key Transaction Terms
. 3 CANADIAN PORTFOLIO ACQUISITION Key Transaction Terms Size / Structure Cap rate / Yield Term Escalators Credit Enhancement CAD $170.5 million / USD $136.9 million(1) sale / leaseback transaction for 8 independent living facilities and 1 assisted living/independent living facility, with an earn-ou
Slide 4: Canadian Portfolio Acquisition: Portfolio Overview
. 4 CANADIAN PORTFOLIO ACQUISITION Portfolio Overview Key Portfolio Statistics (1) Occupancy ~85% (1) As of December 31, 2014 (2) Sabra has an option to acquire two additional independent living facilities. # of Provinces 2 # of Units 865 # of Properties 9 (2) EBITDAR Margin ~38% Revenue / Occupied
Slide 5: Strategic Portfolio Transformation: Private Pay Sources
. 5 Private Pay Sources(1) Skilled nursing/ transitional care CANADIAN PORTFOLIO ACQUISITION 1) Includes revenues from all investment activity through May 27, 2014 (1) Non-private pay revenues for tenants and borrowers consist of revenues from federal, state and local government reimbursement progra
Slide 6: Strategic Overview
. 6 STRATEGIC OVERVIEW Multiple avenues to increase shareholder returns Create a diversified portfolio that is well positioned for the future of health care delivery Leverage Sabra’s operating expertise to develop strategic relationships with local & regional operators Improve Sabra’s cost of capita
Slide 7: Where We Are Today
. 7 WHERE WE ARE TODAY(1) Building a better REIT… but we’re not done yet (1) All results since inception through March 31, 2015 unless otherwise noted. (2) Since first quarter 2011. (3) Through June 3, 2015. (4) Since fourth quarter 2011. $1.6 bil Acquisitions and investments 4.1% Improvement in wei
Slide 8: Sabra's Portfolio by the Numbers
. 8 SABRA’S PORTFOLIO BY THE NUMBERS Revenue diversification is the name of the game Skilled nursing/ transitional care Genesis 1) Includes revenues from all investment activity through May 27, 2014 Private pay sources (1) (1) Non-private pay revenues for tenants and borrowers consist of revenues fr
Slide 9: The Future of Health Care Delivery
. 9 THE FUTURE OF HEALTH CARE DELIVERY The times they are a changing Skilled Nursing/ Transitional Care Long term care Higher-acuity, short-stay rehab, “step down” units for hospitals Senior Housing Developed by multi-family developers for self-sufficient residents Needs-based model, residents with
Slide 10: Thinking Outside the Box
. 10 Traditional REIT structures - Sale/leasebacks -Mortgage debt THINKING OUTSIDE THE BOX Deal structure flexibility drives competitive advantage Smaller investments with options to purchase RIDEA compliant structures Preferred equity & mezzanine debt Development agreements
Slide 11: Market Focus
. 11 MARKET FOCUS Bigger is not always better • Many opportunities exist outside of largest MSAs in U.S. • The percentage of the population over the age of 65 is greater in the markets where Sabra has invested than in the U.S. as a whole • Lower costs to build, coupled with favorable demographics an
Slide 12: Relationships Drive Consistent Deal Flow
. 12 RELATIONSHIPS DRIVE CONSISTENT DEAL FLOW Partnering with growing operators and developers $186.5 $262.9 $226.0 $32.0 $36.6 $92.6 $218.4 $299.5 $318.6 2012 2013 2014 New Investments Relationship Investments • In 2014, 29% of investments (excluding the Holiday portfolio) came from existing relati
Slide 13: Total Investments by Relationship
. 13 TOTAL INVESTMENTS BY RELATIONSHIP ($ in millions) (1) (1) Includes all material investments in these relationships through March 31, 2015 Total invested through March 31, 2015: $471.2 million Additional investments anticipated through 2020: $600.1 million Newly built properties expected to be o
Slide 14: Target = Investment Grade
. 14 TARGET = INVESTMENT GRADE Main barriers to investment grade rating are size and diversification Sabra (1) “Big 3” (2) Net Debt to Adjusted EBITDA 5.20x 5.31x 5.66x Debt as % of Enterprise Value 33% 29% 34% Interest Coverage Ratio 4.27x 3.85x 5.40x Fixed Charge Coverage Ratio 3.32x 3.05x 4.60x S
Slide 15: Portfolio Performance
Portfolio Performance
Slide 16: Strong Portfolio Performance: Occupancy and Skilled Mix
. 16 STRONG PORTFOLIO PERFORMANCE Portfolio occupancy and SNF portfolio skilled mix 88.1% 87.9% 88.4% 90.9% 38.3% 39.3% 2014 2015 2014 2015 SNF Senior Housing Skilled Mix Occupancy & Skilled Mix Solid skilled mix reflects focus on higher-acuity, short-stay skilled nursing/transitional care facilitie
Slide 17: Skilled Nursing EBITDAR and EBITDARM Coverage
. 17 STRONG PORTFOLIO PERFORMANCE Skilled nursing/transitional care EBITDAR and EBITDARM coverage 1.34x 1.19x 1.72x 1.54x 2014 2015 EBITDAR EBITDARM (1) (1) EBITDAR and EBITDARM coverages include only Stabilized Facilities acquired before the three months ended March 31, 2015 and are only included i
Slide 18: Senior Housing EBITDAR and EBITDARM Coverage
. 18 STRONG PORTFOLIO PERFORMANCE Senior Housing EBITDAR and EBITDARM coverage 1.10x 1.27x1.30x 1.48x 2014 2015 EBITDAR EBITDARM (1) Secure rental payments from an increasing portion of our portfolio (1) EBITDAR and EBITDARM coverages include only Stabilized Facilities acquired before the three mont
Slide 19: Fixed Charge Coverage
. 19 STRONG PORTFOLIO PERFORMANCE Fixed Charge Coverage (1) Fixed Charge Coverage is presented one quarter in arrears for tenants with significant corporate guarantees. See Definitions for definition of Fixed Charge Coverage. (for the twelve month periods ended March 31, 2014 and 2015) Tenant Facili
Slide 20: Financial Overview
Financial Overview
Slide 21: Capitalization and Cost of Capital
. 21 Capitalization and cost of capital $1,554 $699 $123 $147 $200 $22 Common Equity Market Value Senior Notes Mortgage Debt Preferred Equity Term Loan Revolving Credit Facility Net of Cash (1) (1) Common Equity market value and Preferred Equity market value is based on March 31, 2015 shares outstan
Slide 22: Financial Results
. 22 FINANCIAL RESULTS Normalized AFFO/share, Normalized FFO/share and Dividend/share $1.51 $1.59 $1.77 $2.12 $0.53 $0.51 $0.54 $0.52 $1.31 $1.47 $1.84 $2.20 $0.53 $0.51 $0.57 $0.53 $0.96 $1.32 $1.36 $1.51 $0.38 $0.38 $0.39 $0.39 2011 2012 2013 2014 Q2 2014 Q3 2014 Q4 2013 Q1 2015 Normalized AFFO/sh
Slide 23: Financial Strength: Net Debt to Adjusted EBITDA
. 23 FINANCIAL STRENGTH Historical Net Debt to Adjusted EBITDA 2.19x 2.65x 2.82x 4.47x 4.59x 1.9x 2.11x 1.92x 0.62x 0.61x 4.09x 4.76x 4.74x 5.09x 5.20x 12/31/2011 12/31/2012 12/31/2013 12/31/2014 3/31/2015 Unsecured Leverage Secured Leverage Net Debt to Adjusted EBITDA • Maintaining total leverage w
Slide 24: Financial Strength: Historical Interest Coverage
. 24 FINANCIAL STRENGTH Historical LTM Interest Coverage 3.17x 3.22x 3.85x 4.29x 4.27x 2011 2012 2013 2014 Q1 2015 Weighted average interest rate (2) declined from: 7.24% at December 31, 2011 to 4.64% as of March 31, 2015 (1) Interest Coverage is calculated in accordance with the indentures relating
Slide 25: Financial Strength: Debt Maturities
. 25 FINANCIAL STRENGTH Debt maturities $2.1 $3.0 $3.1 $3.2 $3.3 $3.4 $3.5 $3.6 $3.7 $3.8 $90.6 $200.0 $26.0 $424.0 $500.0 $200.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Thereafter Mortgage Notes Term Loan Credit Facility Outstanding Credit Facility Available Senior Notes Ample liquidity o
Slide 26: Appendix
Appendix
Slide 27: Key Credit Statistics
. 27 KEY CREDIT STATISTICS(1) Option One Option Three Ma December 31, 2014 March 31, 2015 Net Debt to Adjusted EBITDA 5.09x 5.20x Interest Coverage 4.29x 4.27x Fixed Charge Coverage Ratio 3.28x 3.32x Total Debt/Asset Value 43% 44% Secured Debt/Asset Value 5% 5% Unencumbered Assets/Unsecured Debt 246
Slide 28: Reconciliation of FFO, Normalized FFO, AFFO and Normalized AFFO
. 28 RECONCILIATION OF FFO, NORMALIZED FFO, AFFO and NORMALIZED AFFO Option One Option Three Ma 2011 2012 2013 2014 Q2 Q3 Q4 Q1 Net income attributable to common stockholders $ 12.8 $ 19.5 $ 25.7 $ 36.7 $ 12.2 14.6 19.7 $ 16.9 Depreciation and amortization of real estate assets 26.6 30.2 33.3 43.3 9
Slide 29: Forward Looking Statements
. 29 FORWARD LOOKING STATEMENTS Option One Option Three Ma 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 pre
Slide 30: Non-GAAP Financial Measures
. 30 NON-GAAP FINANCIAL MEASURES Option One Option Three Ma This presentation includes the following financial measures defined as non-GAAP financial measures by the SEC: funds from operations (“FFO”), Normalized FFO, Adjusted FFO (“AFFO”), Normalized AFFO, FFO per diluted common share, Normalized F
Slide 31: Definitions
. 31 DEFINITIONS Option One Option Three Ma Acute Care Hospital. A facility designed to provide extended medical and rehabilitation care for patients who are clinically complex and have multiple acute or chronic conditions. EBITDAR Coverage. EBITDAR for the trailing 12 month periods prior to and inc
Slide 32: Definitions
. 32 DEFINITIONS Option One Ma Occupancy Percentage. Occupancy Percentage represents the facilities’ average operating occupancy for the period indicated. The percentages are calculated by dividing the actual census from the period presented by the available beds/units for the same period. Occupancy
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