Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — 21st Annual Wells Fargo Real Estate Securities Conference 2018
36 slides from Sabra Health Care Reit's conference presentation, Feb 28, 2018
Slide 1: Dedicated to Value Creation, Committed to Our Operator Roots
DEDICATED TO VALUE CREATION, COMMITTED TO OUR OPERATOR ROOTS 21st Annual Wells Fargo Real Estate Securities Conference February 28 – March 1, 2018
Slide 2: Positioned to Perform
21st Annual Wells Fargo Real Estate Securities Conference 2 2/28/2018 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 pro
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 5.49x (5.94x with JV Debt) Leverage1 DIVERSIFIED PORTFOLIO Top 3 Relationships = 28% of Pro Forma Annualized Cash NOI1 Top 5 Relationships = 40% of Pro Forma Annualized Cash NO
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 21st Annual Wells Fargo Real Estate Securities Conference 2/28/2018
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
Slide 6: Who We Are Now Is Who We've Always Been
6 ENTERPRISE VALUE 1 $773.3M vs $6.1B INVESTMENTS 2 86 vs 728 RELATIONSHIPS 2 1 vs 73 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 12/31/2017. Share price as of 2/26/2018. (2) As of 12/31/2017, adj
Slide 7: Strategy in Action
7 “WHEN IT COMES TO EXECUTING OUR STRATEGY, WE DO WHAT WE SAY WE ARE GOING TO DO.” – Talya Nevo-Hacohen, Chief Investment Officer STRATEGY IN ACTION 21st Annual Wells Fargo Real Estate Securities Conference 2/28/18
Slide 8: Excellent Execution
8 On January 2, 2018, we completed our previously announced transaction with affiliates of Enlivant and TPG Real Estate for a total of $491 million. • Acquired 11 Senior Housing communities under our Senior Housing - Managed property structure that are operated by Enlivant. • Acquired a 49% equity i
Slide 9: Genesis Sales Roadmap
(dollars in millions) LEASED FACILITIES ANNUAL CASH RENT1 REMAINING RENT AS A % OF PRO FORMA NOI Current Status 54 $ 51.2 8.6% Expected Sales by Q3 2018 (under contract)2 (35) (25.6) 4.5% Expected Sales by end of 2018 (not under contract) (11) (6.1) 3.4% Post sales status3 8 $ 19.5 9 (1) Net of $19
Slide 10: Creating Operating Efficiencies
10 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, yet effective. CREATING OPERATING EFFICIENCIES
Slide 11: Investment Thesis
11 “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 21st Annual Wells Fargo Real Estat
Slide 12: Focused Strategy, Creative Execution, Consistent Growth
12 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 th
Slide 13: Portfolio
13 “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 21st Annual Wells Fargo Real Estate Securities Conference 2/28/2018
Slide 14: Superior Returns Start with a Strong Portfolio
9 Year Wtd. Avg. Remaining Lease Term1 14 SUPERIOR RETURNS START WITH A STRONG PORTFOLIO 728 Investments1 PORTFOLIO 82% 87% 83% 79% Average Occupancy1 1.38x 1.09x 3.60x Rent Coverage1 73 Relationships1 37% Skilled Mix1 SNF/TC SH - Leased SH - Managed SNF/TC SH - Leased Hosp/Oth. (1) Pro forma as of
Slide 15: Proprietary Pipeline of Purpose-Built Assets
15 PROJECTS 30 CURRENT TOTAL INVESTMENT $226M EXPECTED REAL ESTATE VALUE 1 $584M 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 purc
Slide 16: Effective Asset Management and Strong Operator Relationships
16 Senior Housing - Leased 14% Senior Housing - Managed 11% Specialty Hospitals and Other 8% Interest and Other Income 2% Skilled Nursing / Transitional Care 65% EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS We continually look for opportunities to enhance the value of our real estate
Slide 17: High Quality of Care, Strong Performance
17 HIGH QUALITY OF CARE STRONG PERFORMANCE 21st Annual Wells Fargo Real Estate Securities Conference 2/28/2018
Slide 18: Operators
18 “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 21st Annual Wells Fargo Real Estate Securities Conference
Slide 19: Our Operators Are Driven by Advancing the Quality of Care
19 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 21st Annual Wells Fargo Real
Slide 20: We Are a Partner in Our Operators' Success
20 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 21st Ann
Slide 21: We Said We Were Going to Diversify Our Operator Base
21 Senior Care Centers 10% Enlivant 9% Genesis 8% Avamere 7% Signature 6% Other 60% 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 passion for delivering high-quality care. OPERA
Slide 22: Leadership
22 LEADERSHIP “WHEN WE PUT OUR MINDS TO SOMETHING, WE GET IT DONE.” – Rick Matros, Chief Executive Officer 21st Annual Wells Fargo Real Estate Securities Conference 2/28/2018
Slide 23: Our Care-Driven Approach Is as Unique as Our Leadership Team
23 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
Slide 24: Performance
24 “WE’VE CONSISTENTLY DELIVERED VALUE TO OUR STOCKHOLDERS WHILE MAINTAINING A STRONG BALANCE SHEET.” – Harold Andrews, Jr., Chief Financial Officer PERFORMANCE 21st Annual Wells Fargo Real Estate Securities Conference 2/28/2018
Slide 25: Superb Execution of a Consistent Strategy Fuels Long-Term Growth
25 SUPERB EXECUTION OF A CONSISTENT STRATEGY FUELS LONG-TERM GROWTH 67% Sabra 52% Healthcare REIT Composite1 57% SNL U.S. Healthcare REIT Equity Total Shareholder Return as of 2/26/2018 (1) Healthcare REIT Composite is comprised of CTRE, HCN, HCP, LTC, MPW, NHI, OHI, SNH and VTR. PERFORMANCE 21st An
Slide 26: Reliable Earnings Growth While Transforming Our Portfolio
$1.51 $1.59 $1.77 $2.12 $2.14 $2.26 $2.31 $2.32 $1.29 $1.33 $1.38 $1.54 $1.62 $1.68 $1.76 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $0.50 $1.00 $1.50 $2.00 $2.50 2011 2012 2013 2014 2015 2016 2017 2018 Guidance Normalized AFFO / Share Dividend / Share Genesis Concentration SNF Concentration 26 REL
Slide 27: Fortified Balance Sheet with Low Leverage and Enhanced Liquidity
27 Investment-grade balance sheet: BBB- / BBB- / Ba1 Primarily fixed rate (87.2%), unsecured borrowings1,2 Cost of permanent debt is 4.04%3 Well-laddered maturity schedule More than $350 million of available liquidity4 FORTIFIED BALANCE SHEET WITH LOW LEVERAGE AND ENHANCED LIQUIDITY PERFOR
Slide 28: Balanced Capital Structure
Preferred Equity 2% Common Equity Value 47% Secured Debt 4% Unsecured Debt 47% Capital Structure1 28 TOTAL MARKET CAPITALIZATION $6.6B 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 12/31
Slide 29: (1) Pro forma information is adjusted for the Enlivant and North American Healthcare transactions,,
29 (1) Pro forma information is adjusted for the Enlivant and North American Healthcare transactions,, the remaining Genesis and CCP rent reductions, and the transition of five skilled nursing/transitional care facilities to an existing Sabra operator completed subsequent to 12/31/2017. (2) Investme
Slide 30: Favorable Profile with Staggered Maturities
30 500 200 500 100 104 200 1,000 641 359 $4 $103 $205 $1,161 $1,004 $204 $5 $5 $505 $204 200 400 600 800 1,000 1,200 1,400 1,600 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027+ Unsecured Bonds Mortgage Debt / Secured Debt Term Loans Line of Credit Available Line of Credit FAVORABLE PROFILE WITH S
Slide 31: Peer Comparison: FFO Multiples, Dividend Yield, NAV, Portfolio Composition
31 6.9x 11.5x 12.2x 12.3x 12.7x 12.7x 13.1x 0.0x 5.5x 11.0x 16.5x 22.0x SBRA HCP OHI NHI LTC Big 2 Average CTRE 10.3% 5.1% 5.7% 5.9% 6.3% 6.6% 9.8% -0.5% 2.0% 4.5% 7.0% 9.5% 12.0% SBRA CTRE NHI LTC Big 2 Average HCP OHI -12.6% -15.3% -7.3% 4.4% 5.9% 9.7% 10.3% -24.0% -16.0% -8.0% 0.0% 8.0% 16.0% 24.
Slide 32: Well-Positioned Portfolio
1.38x 1.35x 1.41x 1.66x 1.75x SBRA OHI LTC NHI CTRE 32 SNF CONCENTRATION 1 SNF RENT COVERAGE 1,3 TOP FIVE RELATIONSHIP CONCENTRATION 1 (1) Represents latest available concentration and coverage for peers as of 2/26/2018. (2) Concentrations are calculated using Pro Forma Annualized Cash NOI as of 12/
Slide 33: Appendix
33 APPENDIX 21st Annual Wells Fargo Real Estate Securities Conference 2/28/2018
Slide 34: Pro Forma FFO Reconciliation
34 PRO FORMA FFO RECONCILIATION1 APPENDIX 21st Annual Wells Fargo Real Estate Securities Conference 2/28/2018 (1) Pro forma as of 12/31/2017, adjusted for the Enlivant and North American Healthcare transactions, the remaining CCP and Genesis rent reductions and the transition of five skilled nursing
Slide 35: Non-GAAP Measure Definitions
35 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. Adjusted EBITDA i
Slide 36: Forward-Looking Statements
36 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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