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8-K - 8-K - AVIV REIT, INC.d624464d8k.htm
EX-99.1 - EX-99.1 - AVIV REIT, INC.d624464dex991.htm

Exhibit 99.2

 

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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.


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Table of Contents

 

 

Company Information

     1   

Portfolio Summary

     2-4   

Debt Summary and Capitalization

     5   

Investment Activity

     6   

Definitions

     7   


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Company Information

 

 

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

 

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Portfolio Summary

 

Dollars and square feet in thousands 1

Portfolio Composition

 

                                 Annualized         
     Property      Number of      Square      Investment      Cash      % of  

Property Type

   Count      Beds      Feet      (GBV)      Rent      Total Rent  

Skilled Nursing

     223         18,770         6,942       $ 994,256       $ 116,758         87.6

Senior Housing

     22         1,381         837         119,399         13,108         9.8

Other Healthcare Properties

     18         145         97         42,579         3,358         2.5
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     263         20,296         7,877       $ 1,156,234       $ 133,224         100.0
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Portfolio Performance

 

     EBITDARM      EBITDAR            Facility Revenue Mix     EBITDAR  

Core Portfolio

   Coverage      Coverage      Occupancy     Private Pay     Medicare     Medicaid     Margin  

Skilled Nursing

     1.9x         1.5x         79.7     19.6     24.2     56.1     14.8

Senior Housing

     1.8x         1.6x         78.5     78.7     4.9     16.4     32.4

Other Healthcare Properties

     10.1x         8.9x         86.3     100.0     0.0     0.0     30.3
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     2.0x         1.6x         79.7     24.7     22.7     52.7     16.0
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

State Diversification

 

            Investment      Annualized Rent  

State

   Properties      (GBV)      Rent      %  

Texas

     60       $ 200,776       $ 24,378         18.3

California

     36         166,166         20,722         15.6

Ohio

     17         95,298         13,361         10.0

Connecticut

     6         86,586         8,864         6.7

Missouri

     15         75,827         7,016         5.3

Arkansas

     11         62,770         6,945         5.2

Pennsylvania

     10         79,184         5,428         4.1

New Mexico

     9         29,586         5,075         3.8

Illinois

     8         31,872         4,661         3.5

Washington

     10         57,785         4,621         3.5

Other 19 States

     81         270,384         32,154         24.1
  

 

 

    

 

 

    

 

 

    

 

 

 
     263       $ 1,156,234       $ 133,224         100.0
  

 

 

    

 

 

    

 

 

    

 

 

 

Operator Diversification

 

     Properties      Investment      Annualized Rent        

Operator (Location)

   Aviv      Total      (GBV)      Rent      %     States  

Daybreak (Denton, TX)

     52         66       $ 168,516       $ 20,882         15.7     2   

Saber (Bedford Heights, OH)

     30         72         185,312         19,942         15.0     6   

EmpRes (Vancouver, WA)

     17         46         111,830         12,470         9.4     6   

Preferred Care (Plano, TX)

     17         110         69,007         10,478         7.9     12   

Sun Mar (Brea, CA)

     13         25         71,075         8,934         6.7     1   

Maplewood (Westport, CT)

     6         6         86,586         8,864         6.7     1   

Fundamental (Sparks, MD)

     11         104         65,101         5,866         4.4     13   

Deseret (Bountiful, UT)

     18         29         38,374         4,782         3.6     5   

Genesis (Kennett Square, PA)

     10         413         52,422         4,334         3.3     28   

Prestige Care (Vancouver, WA)

     9         69         15,948         4,300         3.2     7   

Other 26 Operators

     80         368         292,062         32,372         24.3  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   
     263         1,308       $ 1,156,234       $ 133,224         100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

(1) Data as of September 30, 2013. Coverage, occupancy, margin and revenue mix information is provided on a trailing twelve month basis through June 30, 2013. Annualized cash rent for leases in place as of September 30, 2013 and includes income from a deferred financing lease. Totals may not add due to rounding.

 

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Portfolio Summary

 

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

State Occupancy1

 

     Aviv     State        

State

   Occupancy     Average     Variance  

Texas

     75.2     71.9     3.3

California

     90.6     84.9     5.7

Ohio

     84.7     84.5     0.2

Connecticut

     98.6     NA        NA   

Missouri

     73.8     71.8     2.0

Arkansas

     71.7     73.0     (1.3 %) 

Pennsylvania

     85.0     90.6     (5.6 %) 

New Mexico

     81.4     82.6     (1.2 %) 

Illinois

     74.5     77.8     (3.3 %) 

Washington

     84.8     80.1     4.7

Lease Maturity Schedule2

 

     Number of      % of  

Year

   Properties      Total Rent  

2013

     1         0.0

2014

     1         0.2

2015

     8         2.4

2016

     6         2.4

2017

     16         4.0

Thereafter

     230         91.0
  

 

 

    

 

 

 

Total

     262         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 September 30, 2013.

 

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Portfolio Summary

 

Information for the trailing twelve month period ended June 30, 2013

EBITDARM Coverage Distribution

 

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EBITDAR Coverage Distribution

 

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Debt Summary and Capitalization

 

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

Debt Maturities1

 

     Senior Unsecured      Revolving      Mortgage      Total  

Year

   Notes      Credit Facility      Debt      Debt  

2013

   $ —         $ —         $ —         $ —     

2014

     —           —           —           —     

2015

     —           —           —           —     

2016

     —           95,000         —           95,000   

2017

     —           —           —           —     

Thereafter

     400,000         —           11,276         411,276   
  

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

   $ 400,000       $ 95,000       $ 11,276       $ 506,276   

(Discounts) and premiums, net

     2,862         —           2,435         5,298   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total debt

   $ 402,862       $ 95,000       $ 13,712       $ 511,574   
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average interest rate

              6.7
           

 

 

 

Weighted average maturity in years

              5.4   
           

 

 

 

Fixed and Floating Rate Debt

 

     Amount      % of Total  

Fixed rate debt

     

Senior unsecured notes

   $ 400,000         79.0

Mortgage debt

     11,276         2.2
  

 

 

    

 

 

 

Total fixed rate debt

   $ 411,276         81.2

Floating rate debt

     

Revolver

   $ 95,000         18.8
  

 

 

    

 

 

 

Total debt

   $ 506,276         100.0
  

 

 

    

 

 

 

Covenants for Senior Unsecured Notes2

 

Covenant

  

Requirement

   Q3 2013  

Total debt / total assets

   No greater than 60%      40

Secured debt / total assets

   No greater than 40%      8

Interest coverage

   No less than 2.00x      2.70x   

Unencumbered assets / unsecured debt

   No less than 150%      251

Enterprise Value

 

     Shares/units                
     Outstanding      Price      Value  

Common stock and OP units

     49,212       $ 22.80       $ 1,122,040   

Total debt

           511,574   

Cash and cash equivalents

           (12,232
        

 

 

 

Total enterprise value

         $ 1,621,382   
        

 

 

 

 

(1) In October, the Company issued $250mm aggregate principal amount of 6% Senior Notes due 2021 and a portion of the proceeds were used to entirely pay down the revolving credit facility.
(2) Covenants are calculated in accordance with the indenture governing the senior unsecured notes.

 

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Investment Activity

 

Data as of September 30, 2013 unless otherwise noted; Dollars in thousands

2013 Property Reinvestment and New Construction

 

Period

   Property
Reinvestment
     New
Construction
     Total  

Third quarter

   $ 1,993       $ 3,882       $ 5,875   

Second quarter

     3,011         6,274         9,285   

First quarter

     4,905         1,824         6,729   
        

 

 

 
         $ 21,889   
        

 

 

 

New Construction Projects

 

                                      Remaining      Total         
     Property           Opening      Acquisition      Spend Through      Costs to      Expected      Expected  

Operator - Location

   Type    Beds      Date      Costs      9/30/2013      be Spent      Cost      Yield  

Daybreak - Eagle Lake, TX

   SNF      80         Q1 2014       $ 101       $ 4,223       $ 1,476       $ 5,800         11.0

Saber - Chatham, PA

   SNF      120         Q1 2014         2,200         9,319         681         12,200         11.0

Maplewood - Bethel, CT

   ALF      80         Q1 2015         2,400         2,277         14,223         18,900         9.5
           

 

 

    

 

 

    

 

 

    

 

 

    

Total

            $ 4,701       $ 15,820       $ 16,380       $ 36,900      
           

 

 

    

 

 

    

 

 

    

 

 

    

2013 Acquisitions1

 

     Property                        Initial  

Period

   Type   Location      Beds      Amount      Cash Yield  

Fourth quarter (to date):

             

November

   SNF     OH         636       $ 41,000         9.9

November

   SNF     AR         74         1,163         11.0

October

   ALF     FL         230         13,000         10.0

October

   SNF     OH, IN         640         35,900         10.0

Third quarter:

             

September

   SNF     TX         96         3,450         11.0

August

   SNF     KY         107         9,000         10.6

Second quarter:

             

June

   SNF     OK         215         6,200         11.0

May

   SNF     OH         130         14,350         10.0

May

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

April

   MOB     IN         N/A         1,200         11.0

April

   SNF     TX         80         2,400         11.0

April

   TBI     CA         6         697         9.5

April

   TBI     CA         6         779         9.5

First quarter

   N/A     N/A         0         0         0.0
       

 

 

    

 

 

    

 

 

 

Total

          2,220       $ 131,539         10.1
       

 

 

    

 

 

    

 

 

 

2012 Acquisitions

 

                        Initial  

Period

   Property Type    Beds      Amount      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 fourth quarter to date excludes $2.4mm land parcel.

 

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Definitions

 

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 June 30, 2013 included 241 of the 262 properties in our portfolio as of June 30, 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.

 

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