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8-K - FORM 8-K - AVIV REIT, INC.d581905d8k.htm
EX-99.1 - EX-99.1 - AVIV REIT, INC.d581905dex991.htm

Exhibit 99.2

LOGO


LOGO

Presentation of Supplemental Information

 

The information in this supplement should be read in conjunction with Aviv’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the Securities and Exchange Commission (“SEC”). You may access these filings on Aviv’s website, www.avivreit.com, or on the SEC’s website, www.sec.gov.

The information presented under “Definitions” is an integral part of this supplement.

This supplement may include forward-looking statements. Forward-looking statements can be identified by the use of words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “continue” or similar terminology. These forward-looking statements are made based on our current expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. These uncertainties include, but are not limited to, uncertainties relating to the operations of our tenants, including those relating to reimbursement by government and other third-party payors, compliance with regulatory requirements and occupancy levels, regulatory, reimbursement and other changes in the healthcare industry, the performance and reputation of our tenants, our ability to successfully engage in strategic acquisitions and investments, the effect of general market, economic and political conditions, the availability and cost of capital, changes in tax laws and regulations affecting REITs and our ability to maintain our status as a REIT. Important factors that could cause actual results to differ materially from our expectations include those disclosed under “Risk Factors” and elsewhere in filings made by Aviv with the SEC.


                                     Table of Contents      LOGO     

 

 

Company Information

     1   

Portfolio Summary

     2-3   

Debt Summary and Capitalization

     4   

Investment Activity

     5   

Definitions

     6   


                             Company Information      LOGO     

 

 

Board of Directors
Craig M. Bernfield    Norman R. Bobins
Chairman and Chief Executive Officer    Non-Executive Chairman, The PrivateBank
Aviv REIT, Inc.    and Trust Company
Michael W. Dees    Alan E. Goldberg
Partner, Lindsay Goldberg LLC    Co-Managing Partner, Lindsay
   Goldberg LLC
Susan R. Lichtenstein    Mark B. McClellan, M.D., Ph.D.
SVP, Corporate Affairs, Chief Legal Officer and    Chair in Health Policy Studies, Brookings
Secretary, Hill-Rom Holdings, Inc.    Institution; Senior fellow and director of the
   Engelberg Center for Health Care Reform
Sharon O’Keefe    Mark J. Parrell
President, University of Chicago Medical Center    EVP and Chief Financial Officer, Equity
   Residential
Ben W. Perks    James H. Roth
Former EVP and Chief Financial Officer,    Chief Executive Officer, Huron Consulting
Navigant Consulting   
J. Russell Triedman   
Partner, Lindsay Goldberg LLC   
Senior Management
Craig M. Bernfield    Steven J. Insoft
Chairman and Chief Executive Officer    President and Chief Operating Officer
James H. Lyman    Leticia Chavez
Chief Financial Officer and Treasurer    Executive Vice President, Administration
Samuel H. Kovitz    Donna M. O’Neill
Executive Vice President, General    Chief Information and Accounting Officer
Counsel and Secretary   
Joshua J. Kochek    Steven R. Levin
Vice President, Investments    Vice President, Real Estate
Contact Information
Corporate Headquarters    Investor Relations
303 W Madison St., Suite 2400    David J. Smith
Chicago, IL 60606    Managing Director, Investor Relations &
312-855-0930    Capital Markets
   dsmith@avivreit.com; 312-855-0930

 

1


                             Portfolio Summary      LOGO     

 

Dollars and square feet in thousands 1

Portfolio Composition

 

Property Type

   Property
Count
     Number
of Beds
     Square
Feet
     Investment
(GBV)
     Annualized
Cash

Rent
     % of
Total Rent
 

Skilled Nursing

     222         18,593         6,894       $ 982,485       $ 115,995         87.7

Senior Housing

     22         1,381         837         119,317         13,047         9.9

Other Healthcare Properties

     18         145         97         38,623         3,186         2.4
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     262         20,119         7,829       $ 1,140,424       $ 132,228         100.0
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Portfolio Performance

 

     EBITDARM     EBITDAR           Facility Revenue Mix     EBITDAR  

Core Portfolio

   Coverage     Coverage     Occupancy     Private Pay     Medicare     Medicaid     Margin  

Skilled Nursing

     1.9     1.5     80.1     20.0     24.1     55.9     15.0

Senior Housing

     2.5     2.3     79.1     77.0     5.8     17.2     46.4

Other Healthcare Properties

     10.3     9.2     87.2     100.0     0.0     0.0     31.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     2.1     1.7     80.1     24.6     22.7     52.7     16.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

State Diversification

 

            Investment      Annualized Rent  

State

   Properties      (GBV)      Rent      %  

Texas

     59       $ 195,151       $ 23,787         18.0

California

     36         165,676         20,328         15.4

Ohio

     17         95,092         13,354         10.1

Connecticut

     6         84,658         8,864         6.7

Missouri

     15         75,617         7,841         5.9

Arkansas

     11         62,740         6,945         5.3

Pennsylvania

     10         77,899         5,413         4.1

New Mexico

     9         29,586         5,073         3.8

Illinois

     8         31,864         4,640         3.5

Washington

     10         57,785         4,269         3.2

Other 19 States

     81         264,357         31,716         24.0
  

 

 

    

 

 

    

 

 

    

 

 

 
     262       $ 1,140,424       $ 132,228         100.0
  

 

 

    

 

 

    

 

 

    

 

 

 

Operator Diversification

 

     Properties      Investment      Annualized Rent        

Operator (Location)

   Aviv      Total      (GBV)      Rent      %     States  

Saber (Bedford Heights, OH)

     30         73       $ 184,003       $ 19,935         15.1     6   

Daybreak (Denton, TX)

     48         65         155,755         19,586         14.8     1   

EmpRes (Vancouver, WA)

     17         45         111,830         12,315         9.3     6   

Preferred Care (Plano, TX)

     17         110         68,955         10,432         7.9     12   

Maplewood (Westport, CT)

     6         6         84,658         8,864         6.7     1   

Sun Mar (Brea, CA)

     13         24         71,075         8,846         6.7     1   

Benchmark (Chesterfield, MO)

     15         21         75,617         7,841         5.9     2   

Deseret (Bountiful, UT)

     18         29         38,374         4,782         3.6     5   

Genesis (Kennett Square, PA)

     10         420         15,948         4,300         3.3     28   

Prestige Care (Vancouver, WA)

     9         74         52,422         3,957         3.0     8   

Other 26 Operators

     79         356         281,788         31,371         23.7  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   
     262         1,223       $ 1,140,424       $ 132,228         100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

(1) Data as of June 30, 2013. Coverage, occupancy, margin and revenue mix information is provided on a trailing twelve month basis through March 31, 2013. Annualized cash rent for leases in place as of June 30, 2013 and includes income from deferred financing lease.

 

2


                        Portfolio Summary      LOGO     

 

Occupancy information as of March 31, 2013; Lease maturity schedule as of June 30, 2013

State Occupancy1

 

State

   Aviv
Occupancy
    State
Average
    Variance  

Texas

     75.5     71.7     3.8

California

     90.5     84.9     5.6

Ohio

     86.0     84.5     1.5

Connecticut

     96.7     NA        NA   

Missouri

     75.6     72.3     3.3

Arkansas

     77.3     73.4     3.9

Pennsylvania

     84.5     90.7     (6.2 %) 

New Mexico

     81.4     82.3     (0.9 %) 

Illinois

     75.6     78.0     (2.4 %) 

Washington

     84.5     80.0     4.5

Lease Maturity Schedule2

 

Year

   Number of
Properties
     % of
Total Rent
 

2013

     2         0.4

2014

     1         0.2

2015

     8         2.4

2016

     6         2.4

2017

     16         4.0

Thereafter

     228         90.6
  

 

 

    

 

 

 

Total

     261         100.0
  

 

 

    

 

 

 

 

(1) State occupancy represents nursing facility occupancies per American Health Care Association. Aviv only has assisted living properties in Connecticut.
(2) Lease expiration schedule excludes one property without a lease in place at June 30, 2013.

 

3


                        Debt Summary and Capitalization      LOGO     

 

As of the quarter ended June 30, 2013; Dollars and shares/units in thousands

Debt Maturities

 

Year

   Senior Unsecured
Notes
     Revolver      Mortgage
Debt
     Total
Debt
 

2013

   $ —         $ —         $ —         $ —     

2014

     —           —           —           —     

2015

     —           —           —           —     

2016

     —           80,000         —           80,000   

2017

     —           —           —           —     

Thereafter

     400,000         —           11,314         411,314   
  

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

   $ 400,000       $ 80,000       $ 11,314       $ 491,314   

(Discounts) and premiums, net

     2,971         —           2,455         5,426   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total debt

   $ 402,971       $ 80,000       $ 13,769       $ 496,740   
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average interest rate

              6.8
           

 

 

 

Weighted average maturity in years

              5.8   
           

 

 

 

Fixed and Floating Rate Debt

 

     Amount      % of Total  

Fixed rate debt

     

Senior unsecured notes

   $ 400,000         81.4

Mortgage debt

     11,314         2.3
  

 

 

    

 

 

 

Total fixed rate debt

   $ 411,314         83.7

Floating rate debt

     

Revolver

   $ 80,000         16.3
  

 

 

    

 

 

 

Total debt

   $ 491,314         100.0
  

 

 

    

 

 

 

Covenants for Senior Unsecured Notes1

 

Covenant

   Requirement   Q2 2013  

Total debt / total assets

   No greater than 60%     39

Secured debt / total assets

   No greater than 40%     7

Interest coverage

   No less than 2.00x     2.40

Unencumbered assets / unsecured debt

   No less than 150%     248

Enterprise Value

 

     Shares/units
Outstanding
     Price      Value  

Common stock and OP units

     49,210       $ 25.29       $ 1,244,513   

Total debt

           496,740   

Cash and cash equivalents

           (15,266
        

 

 

 

Total enterprise value

         $ 1,725,987   
        

 

 

 

 

(1) Covenants are calculated in accordance with the indenture governing the senior unsecured notes.

 

4


                             Investment Activity      LOGO     

 

Data as of June 30, 2013; Dollars in thousands

2013 Property Reinvestment and New Construction

 

Period

   Property
Reinvestment
     New
Construction
     Total  

Second quarter

   $ 3,011       $ 6,274       $ 9,285   

First quarter

     4,905         1,824         6,729   
        

 

 

 
         $ 16,014   
        

 

 

 

New Construction Projects

 

Operator - Location

   Property
Type
   Beds      Opening
Date
   Acquisition
Costs
     Spend Through
6/30/2013
     Remaining
Costs to
be Spent
     Total
Expected
Cost
     Expected
Yield
 

Daybreak - Eagle Lake, TX

   SNF      80       Q4 2013    $ 101       $ 2,685       $ 3,014       $ 5,800         11.0

Saber - Chatham, PA

   SNF      120       Q4 2013      2,200         8,035         1,965         12,200         11.0

Maplewood - Bethel, CT

   ALF      80       Q1 2015      2,400         325         16,175         18,900         9.5
           

 

 

    

 

 

    

 

 

    

 

 

    

Total

            $ 4,701       $ 11,045       $ 21,154       $ 36,900      
           

 

 

    

 

 

    

 

 

    

 

 

    

2013 Acquisitions1

 

Period

   Property
Type
  Location    Beds      Amount      Initial
Cash Yield
 

Second quarter:

             

April

   TBI   CA      6       $ 779         9.5

April

   TBI   CA      6         697         9.5

April

   MOB   TX      N/A         2,400         11.0

April

   SNF   IN      80         1,200         11.0

May

   ALF (Land)   CT      N/A         2,400         N/A   

May

   SNF   OH      130         14,350         10.0

June

   SNF   OK      215         6,200         11.0

First quarter

   N/A   N/A      0         0         0.0
       

 

 

    

 

 

    

 

 

 

Total

          437       $ 28,026         10.4
       

 

 

    

 

 

    

 

 

 

2012 Acquisitions

 

Period

   Property Type    Beds      Amount      Initial
Cash Yield
 

Fourth quarter

   SNF, ALF, TBI      612       $ 38,867         9.8

Third quarter

   SNF, LTACH, TBI      294         25,487         10.3

Second quarter

   SNF, ALF      1,959         96,196         10.1

First quarter

   SNF, ALF      600         23,775         10.6
     

 

 

    

 

 

    

 

 

 

Total

        3,465       $  184,325         10.1
     

 

 

    

 

 

    

 

 

 

 

(1) Initial cash yield for 2013 acquisitions through June 30, 2013 excludes $2.4mm land parcel.

 

5


                                 Definitions      LOGO     

 

EBITDARM Coverage: Represents EBITDARM, which we define as earnings before interest, taxes, depreciation, amortization, rent expense and management fees allocated by the operator to one of its affiliates, of our operators for the applicable period, divided by the rent paid to us by our operators during each period.

EBITDAR Coverage: Represents EBITDAR, which we define as earnings before interest, taxes, depreciation, amortization and rent expense, of our operators for the applicable period, divided by the rent paid to us by our operators during such period. Assumes a management fee of 4%.

EBITDAR Margin: Represents the operator’s EBITDAR for the applicable period divided by the operator’s total revenue for the applicable period.

Enterprise Value: Represents equity market capitalization plus net debt. Equity market capitalization is calculated as the number of shares of common stock and units multiplied by the closing price of our common stock on the last day of the period presented. Net debt represents total debt less cash and cash equivalents.

Portfolio Occupancy: Represents the average daily number of beds at our properties that are occupied during the applicable period divided by the total number of beds at our properties that are available for use during the period.

Property Type: ALF = assisted living facility; LTACH = long-term acute care hospital; MOB = medical office building; TBI = traumatic brain injury facility; SNF = skilled nursing facility

State Average Occupancy: Represents the Nursing Facility State Occupancy Rate as reported by American Health Care Association (AHCA). AHCA occupancy data is calculated by dividing the sum of all facility patients in the state occupying certified beds by the sum of all the certified beds in the state reported at the time of the survey corresponding to the period presented. Aviv occupancy represents the state occupancy for the entire portfolio.

Yield: Represents annualized contractual or projected income to be received in cash divided by investment amount.

Portfolio metrics and other statistics are not derived from our financial statements but are operating statistics that we derive from reports that we receive from our operators pursuant to our triple-net leases. As a result, our portfolio metrics typically lag our own financial statements by approximately one quarter. In order to determine our portfolio metrics for the period presented, the metrics are stated only with respect to properties owned by us and operated by the same operator for the portion of the period we owned the properties and excludes assets held for sale, closed properties, properties under construction and, with certain exceptions for shorter periods, properties within 24 months of completion of construction. Accordingly, EBITDARM coverage, EBITDAR coverage, EBITDAR margin, portfolio occupancy and quality mix for the twelve months ended March 31, 2013 included 237 of the 257 properties in our portfolio as of March 31, 2013.

When we refer to the “total rent” of our portfolio, we are referring to the total monthly rent due under all of our triple-net leases as of the date specified, calculated based on the first full month following the specified date. We calculate “annualized rent” for properties during a period by utilizing the amount of rent under contract as of the last day of the period and assume that amount of rent was received in respect of such property throughout the entire period.

 

6