Sabra Health Care Reit, Inc. · NASDAQ:SBRA

Sabra Health Care Reit — Stifel Seniors Housing & Healthcare Real Estate Conference 2018

32 slides from Sabra Health Care Reit's conference presentation, Jan 30, 2018

  1. Slide 1: Dedicated to Value Creation, Committed to Our Operator Roots

    DEDICATED TO VALUE CREATION, COMMITTED TO OUR OPERATOR ROOTS Stifel Seniors Housing & Healthcare Real Estate Conference January 31, 2018

  2. Slide 2: Positioned to Perform

    Stifel Seniors Housing & Healthcare Real Estate Conference 2 1/31/18 Our operational expertise 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 our shareholders while prom

  3. Slide 3: We've Been Opportunistically Executing Our Strategy and It Shows

    3 WE’VE BEEN OPPORTUNISTICALLY EXECUTING OUR STRATEGY AND IT SHOWS STRONG BALANCE SHEET Investment Grade: BBB- / BBB- / Ba1 4.79x Leverage1 DIVERSIFIED PORTFOLIO Top 3 Relationships = 28% of Annualized Cash NOI4 Top 5 Relationships = 41% of Annualized Cash NOI4 CONSISTENT GROWTH 7% Normalized AFFO p

  4. Slide 4: Strategy

    4 “THE STRONGER SABRA YOU SEE TODAY IS THE PRODUCT OF CREATIVE AND TIMELY EXECUTION OF OUR STRATEGY.” – Rick Matros, Chief Executive Officer STRATEGY Stifel Seniors Housing & Healthcare Real Estate Conference 1/31/18

  5. Slide 5: Building a Better REIT by Investing in the Success of Our Partners

    5 WE ARE BUILDING A BETTER REIT BY INVESTING IN THE SUCCESS OF OUR PARTNERS Investment  Invest in high-quality, strong-performing senior housing and SNF portfolios  Increase relationship diversification  Grow private-pay exposure  Develop purpose-built senior housing Finance  Maintain a fortres

  6. Slide 6: Who We Are Now Is Who We've Always Been (2010 vs 2017)

    6 ENTERPRISE VALUE 1 $773.3M vs $6.3B INVESTMENTS 2,3 86 vs 648 RELATIONSHIPS 3 1 vs 70 2010 VS 2017 WHO WE ARE NOW IS WHO WE'VE ALWAYS BEEN— FOCUSED, OPPORTUNISTIC AND FORWARD-THINKING STRATEGY (1) Based on Sabra’s balance sheet as of 9/30/17. Share price as of 1/26/2018. (2) Includes investments i

  7. Slide 7: Investment Thesis

    7 “WE HAVE THE SKILLS AND ACCESS TO CAPITAL TO TAKE ON DEALS OF ANY SIZE, BUT MORE IMPORTANT, WE ARE NOT AFRAID TO STEP OUTSIDE THE PROVERBIAL BOX. WE CREATIVELY SOURCE, STRUCTURE AND FINANCE DEALS.” – Talya Nevo-Hacohen, Chief Investment Officer INVESTMENT THESIS Stifel Seniors Housing & Healthcare

  8. Slide 8: Focused Strategy, Creative Execution, Consistent Growth

    8 FOCUSED STRATEGY, CREATIVE EXECUTION, CONSISTENT GROWTH 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 capital partner of choice for the

  9. Slide 9: Portfolio

    9 “WE CONTINUE TO REFINE OUR PORTFOLIO TO SUPPORT THE CHANGING NEEDS OF PATIENTS. THE REAL ESTATE IS IMPORTANT, BUT IT'S WHAT GOES ON INSIDE THAT REALLY MATTERS.” PORTFOLIO – Peter Nyland, Executive Vice President Asset Management Stifel Seniors Housing & Healthcare Real Estate Conference 1/31/18

  10. Slide 10: Superior Returns Start with a Strong Portfolio

    9 Year Wtd. Avg. Remaining Lease Term2 10 SUPERIOR RETURNS START WITH A STRONG PORTFOLIO 648 Investments1,2 PORTFOLIO 80% 88% 89% Average Occupancy2 1.38x 1.15x 4.74x Rent Coverage2 70 Relationships2 40% Skilled Mix2 Skilled Nursing Senior Housing - Leased Senior Housing - Managed Skilled Nursing Se

  11. Slide 11: Proprietary Pipeline of Purpose-Built Assets

    11 PROJECTS 30 INVESTMENT AMOUNT $209M EXPECTED REAL ESTATE VALUE 1 $593M COMPLETED AND PLANNED PROJECTS PROPRIETARY PIPELINE OF PURPOSE-BUILT ASSETS ENHANCES THE QUALITY OF OUR PORTFOLIO PORTFOLIO (1) Represents the value of completed projects at Sabra’s purchase price and the projected purchase pr

  12. Slide 12: Effective Asset Management and Strong Operator Relationships

    12 Senior Housing - Leased 14% Specialty Hospitals and Other 9% Senior Housing - Managed 11% Interest and Other Income 3% Skilled Nursing and Transitional Care 63% EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS We continually look for opportunities to enhance the value of our real esta

  13. Slide 13: High Quality of Care, Strong Performance

    13 HIGH QUALITY OF CARE STRONG PERFORMANCE Stifel Seniors Housing & Healthcare Real Estate Conference 1/31/18

  14. Slide 14: Operators

    14 “SABRA PROVIDES MORE THAN JUST CAPITAL; IT IS A PARTNER IN OUR SUCCESS BY PROVIDING INDUSTRY METRIC INTELLIGENCE, PURCHASING LEVERAGE AND AN IMPORTANT HEALTH CARE PERSPECTIVE.” – Stephen Silver, Managing Member, Cadia Healthcare OPERATORS Stifel Seniors Housing & Healthcare Real Estate Conference

  15. Slide 15: Our Operators Are Driven by Passion: Advancing Quality of Care

    15 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 OPERATORS Stifel Seniors Housing & Hea

  16. Slide 16: More Than Just Capital; A Partner in Operators' Success

    16 WE OFFER MORE THAN JUST CAPITAL; WE ARE A PARTNER IN OUR OPERATORS’ SUCCESS We Improve Operating Efficiencies:  Share best practices  Facilitate group purchasing  Share operational expertise We Invest In Our Mutual Success:  Redevelopment  Expansion  Strategic development OPERATORS Stifel S

  17. Slide 17: We Said We Were Going to Diversify Our Operator Base

    17 Senior Care Centers 11.1% Enlivant 9.5% Avamere 7.6% Signature HealthCare 6.6% North American Healthcare 6.4% Other 58.8% Relationship Concentration WE SAID WE WERE GOING TO DIVERSIFY OUR OPERATOR BASE We’ve cultivated strong relationships with leading regional care providers who share our passio

  18. Slide 18: Leadership

    18 LEADERSHIP “WHEN WE PUT OUR MINDS TO SOMETHING, WE GET IT DONE.” – Rick Matros, Chief Executive Officer Stifel Seniors Housing & Healthcare Real Estate Conference 1/31/18

  19. Slide 19: Our Care-Driven Approach Is as Unique as Our Leadership Team

    19 OUR CARE-DRIVEN APPROACH IS AS UNIQUE AS OUR LEADERSHIP TEAM  Entrepreneurial  Operational expertise  Fresh thinking  Lean organizational structure Harold Andrews, Jr. Chief Financial Officer Rick Matros Chairman of the Board and Chief Executive Officer Talya Nevo-Hacohen Chief Investment Off

  20. Slide 20: Performance

    20 “WE’VE CONSISTENTLY DELIVERED VALUE TO OUR STOCKHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” – Harold Andrews, Jr., Chief Financial Officer PERFORMANCE Stifel Seniors Housing & Healthcare Real Estate Conference 1/31/18

  21. Slide 21: Superb Execution of a Consistent Strategy Fuels Long-Term Growth

    21 SUPERB EXECUTION OF A CONSISTENT STRATEGY FUELS LONG-TERM GROWTH 67% Sabra 64% Healthcare REIT Composite1 70% SNL U.S. Healthcare REIT Equity Total Shareholder Return as of 1/26/2018 (1) Healthcare REIT Composite is comprised of CTRE, HCN, HCP, LTC, MPW, NHI, OHI, SNH and VTR. PERFORMANCE Stifel

  22. Slide 22: Reliable Earnings Growth

    $1.51 $1.59 $1.77 $2.12 $2.14 $2.26 $1.69 $2.36 $1.29 $1.33 $1.38 $1.54 $1.62 $1.68 $1.31 $0.50 $1.00 $1.50 $2.00 $2.50 2011 2012 2013 2014 2015 2016 Nine Months Ended September 30, 2017 2018 Guidance Normalized AFFO / Share Dividend / Share 22 RELIABLE EARNINGS GROWTH PERFORMANCE Stifel Seniors Hou

  23. Slide 23: Fortified Balance Sheet with Low Leverage and Enhanced Liquidity

    23  Investment-grade balance sheet: BBB- / BBB- / Ba1  Primarily fixed rate (87.2%), unsecured borrowings1,2  Well-laddered maturity schedule  More than $700 million of available liquidity1 FORTIFIED BALANCE SHEET WITH LOW LEVERAGE AND ENHANCED LIQUIDITY PERFORMANCE (1) As of September 30, 2017.

  24. Slide 24: Balanced Capital Structure

    24 Preferred Equity 2% Common Equity Value2 51% Secured Debt 4% Unsecured Debt 43% Capital Structure1 TOTAL MARKET CAPITALIZATION $6.4B BALANCED CAPITAL STRUCTURE Our diverse menu of capital options ensures that we have ready access to low-cost capital to fund our growth. PERFORMANCE (1) As of 9/30/

  25. Slide 25: Strong Investment-Grade Credit Metrics

    25 (1) Investment Grade Peers consists of HCP, HCN, VTR and OHI. The metrics used to calculate Investment Grade Peers Median are sourced from most recent public filings with the SEC and may not be calculated in a manner identical to Sabra’s metrics. STRONG INVESTMENT-GRADE CREDIT METRICS SABRA 3Q17

  26. Slide 26: Favorable Profile with Staggered Maturities

    26 500 200 600 21 109 200 1,000 251 749 $1 $4 $103 $205 $772 $1,005 $204 $5 $5 $709 200 400 600 800 1,000 1,200 1,400 1,600 Q4 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026+ Unsecured Bonds Mortgage Debt / Secured Debt Term Loans Line of Credit Available Line of Credit FAVORABLE PROFILE WITH STA

  27. Slide 27: Peer Valuation Comparison

    27 7.8x 9.6x 12.9x 13.5x 13.6x 14.1x 16.2x 0.0x 5.5x 11.0x 16.5x 22.0x SBRA OHI NHI LTC HCP CTRE Big 2 Average 9.9% 4.7% 5.4% 5.6% 5.6% 6.1% 9.5% 0.0% 2.5% 5.0% 7.5% 10.0% SBRA CTRE NHI LTC Big 2 Average HCP OHI -10.6% -11.5% -2.0% 8.6% 11.8% 12.7% 12.9% -16.0% -8.0% 0.0% 8.0% 16.0% 24.0% 32.0% 40.0

  28. Slide 28: Well-Positioned Portfolio

    1.38x 1.75x 1.70x 1.41x 1.34x SBRA 3.0 CTRE NHI LTC OHI 28 SNF CONCENTRATION 1 SNF RENT COVERAGE 1,3 TOP FIVE RELATIONSHIP CONCENTRATION 1 (1) Represents Q3 2017 concentration and coverage for peers; see the appendix to this presentation for the definition of Sabra 3.0. (2) Concentrations are calcul

  29. Slide 29: Appendix

    29 APPENDIX Stifel Seniors Housing & Healthcare Real Estate Conference 1/31/18

  30. Slide 30: FFO Reconciliation

    30 (Dollars in thousands, except per share amounts) Three Months Ended September 30, 2017 Net income attributable to common stockholders $12,534 Depreciation and amortization of real estate assets $25,933 Net gain on sale of real estate ($582) FFO Attributable to Common Stockholders $37,885 Adjustme

  31. Slide 31: Non-GAAP Definitions

    31 Adjusted EBITDA and EBITDA. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of stock-based compensation expense under the Company’s long-term equity award program, asset specific loan loss reserves, significant out of period revenues and expenses, an

  32. Slide 32: Forward-Looking Statements

    32 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 are not limited to, all statements

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