Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document
false0001492298 0001492298 2020-02-25 2020-02-25
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
 
FORM 8-K
 
  
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 25, 2020
 
 
 
SABRA HEALTH CARE REIT, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
Maryland
 
001-34950
 
27-2560479
(State of
Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
18500 Von Karman Avenue
 
Suite 550
 
Irvine
 
CA
 
92612
(Address of principal executive offices)
 
 
 
 
 
 
 
(Zip Code)
Registrant's telephone number including area code: (888393-8248  
(Former name or former address, if changed since last report.)
 
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:  
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common stock, $0.01 par value
SBRA
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
 



Item 7.01
Regulation FD Disclosure.
On February 26, 2020, Sabra Health Care REIT, Inc. (“Sabra”) intends to present the materials attached to this report as Exhibit 99.1 in investor presentations. The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the presentation materials include material investor information that is not otherwise publicly available. In addition, Sabra does not assume any obligation to update such information in the future.

 
Item 9.01
Financial Statements and Exhibits
 
(d)
 
Exhibits.
 
 
 
99.1
 
 
 
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document).





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
SABRA HEALTH CARE REIT, INC.
 
 
 
/S/    HAROLD W. ANDREWS, JR.
 
Name:
 
Harold W. Andrews, Jr.
 
Title:
 
Executive Vice President, Chief Financial
Officer and Secretary
Dated: February 25, 2020




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

wellsfargofeb2020
A STRONG FOUNDATION FOR GROWTH 23rd Annual Wells Fargo Real Estate Securities Conference February 25-26, 2020


 
POISED FOR GROWTH Our vast industry knowledge, experienced executive team 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 shareholders. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 2


 
STRATEGY “OUR STRONG BALANCE SHEET AND DIVERSE PORTFOLIO PROVIDE THE FOUNDATION FOR CONTINUED GROWTH.” – Rick Matros, Chief Executive Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 3


 
STRATEGY SABRA TODAY 36% 69 $7.3B1 DEBT/ASSET VALUE OPERATOR RELATIONSHIPS ENTERPRISE VALUE $1B+ 10% 27.6% LIQUIDITY MAX RELATIONSHIP NOI CAGR SINCE 2011 CONCENTRATION (1) Includes Sabra’s 49% pro rata share of the debt of its unconsolidated joint venture. Share price as of 2/21/2020. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 4


 
STRATEGY BUILDING A RESILIENT AND AGILE REIT Investment . Invest in high-quality, strong-performing senior housing and SNF portfolios . Relationship diversification . Geographic diversification (investments in 44 states and Canada) . Grow private-pay through investments in high-quality managed senior housing . Develop purpose-built senior housing Finance . Maintain a fortress balance sheet . Maintain sustainable dividend policy Operations . Encourage the sharing of best practices among tenants . Provide industry-leading business intelligence tools February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 5


 
STRATEGY IN ACTION “BY OPPORTUNISTICALLY EXECUTING OUR STRATEGY, WE CONTINUE TO DELIVER LONG-TERM VALUE FOR OUR SHAREHOLDERS.” – Talya Nevo-Hacohen, Chief Investment Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 6


 
STRATEGY IN ACTION STRENGTHENED BALANCE SHEET BY REDUCING LEVERAGE Lowered cost of PERMANENT DEBT by 49 basis points to 3.79% 34 vs 72 Reduced NET DEBT TO ADJUSTED EBITDA ratio (including our unconsolidated joint venture) from 6.12x to 5.38x (1) Includes Sabra’s 49% pro rata share of the debt of its unconsolidated joint venture. Share price as of 5/7/2018. DECEMBER 31, 2018 vs DECEMBER 31, 2019 (2) As of 3/31/2018. Includes investments in properties held in unconsolidated joint ventures. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 7


 
STRATEGY IN ACTION SIGNIFICANTLY IMPROVED CREDIT METRICS INTEREST COVERAGE FIXED CHARGE COVERAGE TOTAL DEBT/ASSET VALUE + 1.10x to 5.28x + 1.03x to 5.08x IMPROVED 700 bps DECEMBER 31, 2018 vs DECEMBER 31, 2019 February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 8


 
STRATEGY IN ACTION CREATING OPERATING EFFICIENCIES 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. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 9


 
INVESTMENT THESIS “WE CRAFT CUSTOM FINANCIAL SOLUTIONS THAT ALLOW OPERATORS TO DELIVER HIGH-QUALITY CARE.” – Talya Nevo-Hacohen, Chief Investment Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 10


 
INVESTMENT THESIS OPPORTUNISTICALLY SOURCED, CREATIVELY STRUCTURED AND PRUDENTLY FINANCED 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 expansion and growth aspirations of our leading operators with regional expertise and favorable demographics. Creatively Financed Development Pursue strategic development opportunities. Minimize risk by making smaller initial investments in purpose-built facility development projects. Opportunistically utilize preferred equity and mezzanine debt investment structures. Optimize Portfolio Continue to curate our portfolio to optimize diversification and maintain a mix of assets well positioned for the future of health care delivery. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 11


 
PORTFOLIO “OUR PORTFOLIO IS POSITIONED TO DELIVER QUALITY CARE NOW AND IN THE FUTURE.” – Peter Nyland, Executive Vice President Asset Management February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 12


 
PORTFOLIO SUPERIOR RETURNS START WITH A STRONG PORTFOLIO AS OF DECEMBER 31, 2019 SNF/TC SH - Leased SH - Managed 2 Hosp/Oth. 82% 87% 88% 71% 627 Investments1 Average Occupancy Percentage 69 38 % Relationships 1 Skilled Mix1 SNF/TC/Hosp/Oth. SH - Leased 8 1.88x 1.37x Years Wtd. Avg. Remaining Rent Coverage1,3 Lease Term (1) Includes investment in properties held in an unconsolidated joint venture. (2) Excludes unconsolidated joint venture. Occupancy Percentage for our unconsolidated joint venture Senior Housing – Managed portfolio was 82% as of 12/31/2019. (3) Rent coverages based on EBITDARM coverage include only facilities owned by the Company as of the end of the period presented for the duration that such facilities were classified as Stabilized Facilities. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 13


 
PORTFOLIO PROPRIETARY PIPELINE OF PURPOSE-BUILT ASSETS ENHANCES THE QUALITY OF OUR PORTFOLIO COMPLETED AND PLANNED PROJECTS PROJECTS CURRENT TOTAL INVESTMENT 25 $295M EXPECTED REAL EXPECTED INITIAL CASH ESTATE VALUE 1 YIELD ON RENTS $488M 7.5% (1) Represents the value of completed projects at Sabra’s purchase price and the projected purchase price for those projects still in development but for which Sabra has option rights as of 12/31/2019. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 14


 
PORTFOLIO EFFECTIVE ASSET MANAGEMENT AND STRONG OPERATOR RELATIONSHIPS Senior Housing - Managed 17% Asset Mix 1 Crafted portfolio of high- Senior Housing - quality and diverse Leased facilities passionate about 10% care. Specialty Hospitals Skilled Nursing / and Other Transitional Care 10% 61% Interest and Other Income 2% (1) Based on Annualized Cash NOI as of 12/31/2019. See the appendix to this presentation for the definition of Annualized Cash NOI. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 15


 
HIGH QUALITY OF CARE STRONG PERFORMANCE February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 16


 
OPERATORS 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 February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 17


 
OPERATORS WE SUPPORT OUR OPERATORS We Invest in Our Mutual Success: . Redevelopment . Expansion . Strategic development . Flexible equity and debt capital solutions February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 18


 
STRATEGY IN ACTION OPERATORS “WHEN IT COMES “WE’VE CONSISTENTLY “ONE OF THE MANY ADVANTAGES OFTO WORKING EXECUTING DELIVERED VALUE TO OUR STRATEGY, OURWITH SHAREHOLDERS SABRA IS THAT THEY GET WHATWE IT’S DO WHATLIKE TO WE WHILEBE AN MAINTAININGOPERATOR .” A SAY WE ARE STRONG BALANCE - Brent Weil, President and CEO EmpRes HealthcareGOING TO DO.” SHEET.” – Rick Matros, Chief Executive Officer – Talya Nevo-Hacohen, Chief Investment Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 19


 
OPERATORS DRIVING PERFORMANCE WITH FREE ACCESS TO INDUSTRY-LEADING BUSINESS INTELLIGENCE TOOLS February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 20


 
OPERATORS POINTRIGHT PROGRAM FOR SNF TENANTS Data Integrity Audit Real-time MDS verification analyzes the accuracy of the Minimum Data Set (MDS) assessment prior to CMS submission. Each MDS is checked for logical and clinical coding accuracy, with recommended actions when inaccurate, incomplete, or inconsistent information is identified. Helpful alerts identify quality measure triggers and reimbursement items for compliance monitoring. PointRight® Pro 30® Rehospitalization PointRight® Pro 30® is the only all-cause, risk adjusted rehospitalization measure validated by Brown University, adopted by the American Health Care Association, and endorsed by the National Quality Forum (NQF #2375). Includes All-Payer and Medicare as well as clinical cohort-specific rates, with trending and drill-down capability to evaluate resident-level rehospitalization information. Five-Star FastTrack® Interactive monitoring and management of CMS Five-Star Quality Rating performance in each of the domains: Health Inspection, Quality Measures, and Staffing. A “What if” feature facilitates setting of targets and future planning. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 21


 
OPERATORS DIVERSE OPERATOR BASE, PASSIONATE ABOUT CARE Relationship Concentration 1 Enlivant 10% Avamere By diversifying our tenant 8% concentration, we’ve curated a portfolio North American equipped to perform in 7% today’s dynamic health care market. Signature Healthcare 7% Other 61% Cadia 7% (1) Based on Annualized Cash NOI as of 12/31/2019. See the appendix to this presentation for the definition of Annualized Cash NOI. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 22


 
PERFORMANCE “WE’VE DELIVERED ON OUR PROMISE TO STRENGTHEN OUR BALANCE SHEET, AND ARE POISED TO CAPITALIZE ON FUTURE GROWTH OPPORTUNITIES.” – Harold Andrews, Jr., Chief Financial Officer February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 23


 
PERFORMANCE FORTIFIED BALANCE SHEET WITH FOCUS ON LOWERING LEVERAGE AND ENHANCING LIQUIDITY . Investment-grade balance sheet 1: BBB- / BBB- / Ba1 . Primarily fixed rate, unsecured borrowings (78.3%)2 . Cost of permanent debt is 3.79% 3 . Well-laddered maturity schedule . More than $1 billion of available liquidity 4 (1) Ratings are for our unsecured notes. (2) As of 12/31/2019. Includes variable rate debt swapped to fixed and excludes borrowing under our revolving credit facility. Total debt includes our share of the unconsolidated joint venture debt. (3) Cost of permanent debt as of 12/31/2019 includes our share of the unconsolidated joint venture debt and excludes our revolving credit facility which had an interest rate of 2.91% as of 12/31/2019. (4) Liquidity as of 12/31/2019 consisted of unrestricted cash and cash equivalents of $39.1 million, and available borrowings under our revolving credit facility of $1.0 billion. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 24


 
PERFORMANCE BALANCED CAPITAL STRUCTURE Capital Structure 1 Our diverse menu of capital Common Equity Value options ensures that we 62% have ready access to low- Unsecured Debt cost capital to fund our 31% growth. ENTERPRISE VALUE Our Credit Facility, which includes a $1.0 billion Revolving Credit Facility (with the full $1.0 billion available $7.3B for borrowing as of 12/31/2019), contains an accordion feature that can increase the total available Secured Debt borrowings to $2.5 billion (up from 7% $2.1 billion plus CAD $125.0 million today). (1) As of 12/31/2019. Includes Sabra’s 49% pro rata share of the debt of its unconsolidated joint venture. Common equity value estimated using outstanding common stock of 205.2 million shares and Sabra’s closing price of $21.99 as of 2/21/2020. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 25


 
PERFORMANCE STRONG INVESTMENT GRADE CREDIT METRICS 1 SABRA 4Q19 INVESTMENT GRADE 2 PEERS MEDIAN LTM Net Debt to Adjusted EBITDA 4.89x 3 5.88x LTM Net Debt to Adjusted EBITDA - Incl. Unconsolidated Joint 5.38x 3 5.90x Venture Interest Coverage Ratio 5.28x 4.58x Debt as a % of Asset Value 36% 42% Secured Debt as a % of Asset 2% 4% Value (1) Credit metrics (except net debt to adjusted EBITDA) are calculated in accordance with the credit agreement relating to our revolving credit facility and the indentures relating to our unsecured senior notes. (2) Investment Grade Peers consists of PEAK, WELL, VTR and OHI, except with respect to the Net Debt to EBITDA – Incl. Unconsolidated Joint Venture metric, for which the available data is with respect to PEAK and VTR. 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. (3) Net Debt to Adjusted EBITDA is calculated based on Annualized Adjusted EBITDA, which is Adjusted EBITDA, as adjusted for annualizing adjustments that give effect to the acquisitions and dispositions completed during the respective period as though such acquisitions and dispositions were completed as of the beginning of the period presented. Net Debt to Adjusted EBITDA - Incl. Unconsolidated Joint Venture is calculated based on Annualized Adjusted EBITDA, as adjusted, which includes Annualized Adjusted EBITDA and is further adjusted to include the Company's share of the unconsolidated joint venture interest expense. See "Reconciliations of Non-GAAP Financial Measures" on our website at http://www.sabrahealth.com/investors/financials/reports- presentations/non-gaap for additional information. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 26


 
PERFORMANCE FAVORABLE PROFILE WITH STAGGERED MATURITIES DEBT MATURITY PROFILE AT DECEMBER 31, 2018 (dollars in millions) $1,600 $1,156 $1,400 376 $1,200 $1,001 $1,000 Available Line of Credit $800 624 Line of Credit $585 $600 18 Mortgage Debt / Secured Debt 81 13 992 $400 Sabra's Share of Uncons. JV Debt $207 $210 $192 $174 500 500 Term Loans $200 $72 $3 200 200 $10 189 70 $0 100 Unsecured Bonds 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028+ DEBT MATURITY PROFILE AT DECEMBER 31, 2019 $1,600 $360 $1,400 $1,200 $906 $1,000 Available Line of Credit 2 $800 1,000 Line of Credit $585 $600 596 Mortgage Debt / Secured Debt 81 $418 $400 68 Sabra's Share of Uncons. JV Debt $114 $192 $174 1 $200 500 Term Loans $34 350 300 350 $7 189 70 $4 $0 105 100 Unsecured Bonds 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029+ (1) Term loans are pre-payable at par. (2) Revolving Credit Facility is subject to two six-month extension options. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 27


 
PERFORMANCE ATTRACTIVE RELATIVE VALUATION 2019 FFO Multiples 1 Dividend Yield 25.0x 10.0% 21.1x 8.2% 20.0x 18.7x 8.0% 17.1x 16.1x 16.5x 14.5x 6.0% 15.0x 6.0% 11.6x 4.5% 4.6% 4.6% 3.9% 4.0% 10.0x 4.0% 5.0x 2.0% 0.0x 0.0% SBRA OHI NHI LTC CTRE Big 2 PEAK SBRA CTRE PEAK Big 2 2 LTC NHI OHI Average2 Average 3 Premium / Discount to Consensus NAV Portfolio Composition (% Annualized Cash NOI)3% 70.0% 100% 63.9% 12% 6% 4% 60.0% 37% 80% 27% 50.0% 47.4% 59% 41.6% 43.2% 60% 72% 5% 40.0% 61% 85% 32.0% 83% 30.0% 23.0% 25.5% 40% 69% 20.0% 58% 20% 41% 10.0% 27% 28% 11% 15% 0.0% 0% 4 SBRA PEAK Big 2 LTC NHI CTRE OHI SBRA OHI CTRE PEAK LTC Big 2 NHI 2 Average Average2 Senior Housing Skilled Nursing Other Sources: SNL Financial as of 2/21/2020, unless otherwise noted. (1) 2019 FFO multiple is calculated as stock price as of 2/21/2020 divided by annualized Q4 2019 FFO, unless otherwise stated. (2) Big 2 average consists of WELL and VTR. (3) Represents latest available concentration for peers from company filings as of 2/21/2020. (4) Based on Annualized Cash NOI for the quarter ended 12/31/2019. See the appendix to this presentation for the definition of Annualized Cash NOI. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 28


 
PERFORMANCE WELL-POSITIONED PORTFOLIO SNF CONCENTRATION 1 TOP FIVE RELATIONSHIP SNF RENT COVERAGE 1,3 CONCENTRATION 1 85% 83% 2.73x 68% 66% 2.38x 61% 59% 53% 1.72x 1.75x 1.66x 39% 38% 27% 2 2 4 SBRA NHI LTC OHI CTRE SBRA OHI LTC CTRE NHI SBRA OHI LTC CTRE NHI (1) Represents latest available concentration and coverage for peers as of 2/21/2020. (2) Based on Annualized Cash NOI as of 12/31/2019 for real estate investments, investments in loans receivable and other investments, and investment in unconsolidated joint venture. See the appendix to this presentation for the definition of Annualized Cash NOI. (3) Represents SNF EBITDARM coverage for LTC and NHI; total portfolio EBITDARM coverage for OHI and CTRE. (4) See appendix to this presentation for the definition of EBITDARM Coverage. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 29


 
APPENDIX February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 30


 
APPENDIX DEFINITIONS 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 is an important non-GAAP supplemental measure of operating performance. Annualized Cash Net Operating Income (“Annualized Cash NOI”).* The Company believes that net income attributable to common stockholders as defined by GAAP is the most appropriate earnings measure. The Company considers Annualized Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Annualized Cash NOI as annual revenues less operating expenses and non-cash revenues and expenses. Annualized Cash NOI excludes all other financial statement amounts included in net income. EBITDARM. Earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses EBITDARM in determining EBITDARM Coverage. EBITDARM has limitations as an analytical tool. EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, EBITDARM does not represent a property’s net income or cash flows from operations and should not be considered an alternative to those indicators. The Company utilizes EBITDARM to evaluate the core operations of the properties by eliminating management fees, which may vary by operator/tenant and operating structure, and as a supplemental measure of the ability of the Company’s operators/tenants and relevant guarantors to generate sufficient liquidity to meet related obligations to the Company. EBITDARM Coverage. Represents the ratio of EBITDARM to cash rent for owned facilities (excluding Senior Housing - Managed communities) for the period presented. EBITDARM coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of EBITDARM. EBITDARM Coverage includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. Funds From Operations Attributable to Common Stockholders (“FFO”), Normalized FFO, Adjusted FFO (“AFFO”) and Normalized AFFO.* See the definitions included in the accompanying Reconciliations of Non-GAAP Financial Measures for information regarding FFO, Normalized FFO, AFFO and Normalized AFFO. 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 includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. Occupancy Percentage for the Company's unconsolidated joint venture is weighted to reflect the Company's pro rata share. Senior Housing. Senior Housing communities include independent living, assisted living, continuing care retirement and memory care communities. Senior Housing - Managed. Senior Housing communities operated by third-party property managers pursuant to property management agreements. Skilled Mix. Skilled Mix is defined as the total Medicare and non-Medicaid managed care patient revenue at Skilled Nursing/Transitional Care facilities divided by the total revenues at Skilled Nursing/Transitional Care facilities for the period indicated. Skilled Mix includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. Skilled Nursing/Transitional Care. Skilled Nursing/Transitional Care facilities include skilled nursing, transitional care, multi-license designation and mental health facilities. Specialty Hospitals and Other. Includes acute care, long-term acute care, rehabilitation and behavioral hospitals, facilities that provide residential services, which may include assistance with activities of daily living, and other facilities not classified as Skilled Nursing/Transitional Care or Senior Housing. Stabilized Facility. At the time of acquisition, the Company classifies each facility as either stabilized or non-stabilized. In addition, the Company may classify a facility as non-stabilized after acquisition. Circumstances that could result in a facility being classified as non-stabilized include newly completed developments, facilities undergoing major renovations or additions, facilities being repositioned or transitioned to new operators, and significant transitions within the tenants’ business model. Such facilities will be reclassified to stabilized upon maintaining consistent occupancy (85% for Skilled Nursing/Transitional Care facilities and 90% for Senior Housing communities) but in no event beyond 24 months after the date of classification as non-stabilized. Stabilized Facilities exclude (i) facilities held for sale, (ii) strategic disposition candidates, (iii) facilities being sold pursuant to the Company’s CCP portfolio repositioning, (iv) facilities being transitioned to a new operator, (v) facilities being transitioned from being leased by the Company to being operated by the Company and (vi) facilities acquired during the three months preceding the period presented. * Non-GAAP Financial Measures: Reconciliations, definitions and important discussions regarding the usefulness and limitations of the Non-GAAP Financial Measures used in this report can be found at http://www.sabrahealth.com/investors/financials/reports-presentations/non-gaap. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 31


 
APPENDIX FORWARD-LOOKING STATEMENTS 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 regarding our strategic and operational plans, as well as all statements regarding expected future financial position, results of operations, cash flows, liquidity, financing plans, business strategy, the expected amounts and timing of dividends, projected expenses and capital expenditures, competitive position, growth opportunities and potential investments, plans and objectives for future operations and compliance with and changes in governmental regulations. These statements are made as of the date hereof and are subject to known and unknown risks, uncertainties, assumptions and other factors—many of which are out of the Company’s control and difficult to forecast—that could cause actual results to differ materially from those set forth in or implied by our forward-looking statements. These risks and uncertainties include but are not limited to: our dependence on the operating success of our tenants; the potential variability of our reported rental and related revenues following the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs (“Topic 842”) on January 1, 2019; operational risks with respect to our Senior Housing -Managed communities; the effect of our tenants declaring bankruptcy or becoming insolvent; our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties; the impact of litigation and rising insurance costs on the business of our tenants; the possibility that Sabra may not acquire the remaining majority interest in the Enlivant joint venture; risks associated with our investments in joint ventures; changes in healthcare regulation and political or economic conditions; the impact of required regulatory approvals of transfers of healthcare properties; competitive conditions in our industry; our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; the potential phasing out of the London Interbank Offered Rate (“LIBOR”) benchmark after 2021; our ability to raise capital through equity and debt financings; changes in foreign currency exchange rates; the relatively illiquid nature of real estate investments; the loss of key management personnel; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; the impact of a failure or security breach of information technology in our operations; our ability to maintain our status as a real estate investment trust (“REIT”) under the federal tax laws; changes in tax laws and regulations affecting REITs (including the potential effects of the Tax Cuts and Jobs Act); compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT; and the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities. Additional information concerning risks and uncertainties that could affect our business can be found in our filings with the Securities and Exchange Commission (the “SEC”), including Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019. Forward-looking statements made in this presentation are not guarantees of future performance, events or results, and you should not place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law. TENANT AND BORROWER INFORMATION This presentation includes information (e.g., EBITDARM coverage and occupancy percentage) regarding certain of our tenants that lease properties from us and our borrowers, most of which are not subject to SEC reporting requirements. The information related to our tenants and borrowers that is provided in this presentation has been provided by, or derived from information provided by, such tenants and borrowers. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only. February 25-26, 2020 23rd Annual Wells Fargo Real Estate Securities Conference 32


 
(Back To Top)