2015 Y ear End Results Results C onference Conference Call

Transcription

1 2015 Year End Results Conference Call February 26,

2 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, based on our best judgements, which h reflect risks and uncertainties. ti Actual results could vary from expectations. EBITDA, Adjusted EBITDA, net operating income (NOI), funds from operations (FFO), and adjusted funds from operations (AFFO) are non- GAAP measures and do not have standardized meanings prescribed by GAAP. Further information can be found in the disclosure documents filed by Extendicare. 2

3 HIGHLIGHTS THIS QUARTER Acquired Four Retirement Communities Empire Crossing, a 64-suite community in Port Hope, Ontario, for $20M Harvest Retirement, a 100-suite community in Tillsonburg, Ontario, for $28M Stonebridge Crossing, a 116-suite community in Saskatoon, SK and Riverbend Crossing, a 68-suite community in Regina, SK, for $50M Deployed Capital During 2015 successfully and strategically deployed / committed $305M of capital in 2015 expected to add $0.20 / share to AFFO once stabilized. Executing on our stated t Canadian-focused d strategy t to grow across the continuum of care 3

4 NEW RETIREMENT DIVISION TAKING SHAPE Location Empire Crossing, Port Hope, ON Harvest, Tillsonburg, ON Stonebridge and Riverbend, SK West Park and Yorkton, SK Simcoe / Bolton / Uxbridge, ON Acquired/ Open Centres Suites Purchase Price / Development Cost (1) (millions) Price / suite Expected Stabilized NOI Yield (2) Oct./ $20.2M $316k 6.9% to 7.1% Dec. / $28.4M $285k 6.7% to 6.9% Dec./ $50.3M $273k 7.2% Feb./ $40.5M $256k 7.3% to 7.7% Fall 2016 / Spring $81.0M $266k 7.4% Total % Expect to finance 65% of LTV, once stabilized (1) Non-GAAP: includes lease-up to stabilized NOI; and estimated development costs also include imputed cost of capital. (2) Non-GAAP: defined as stabilized NOI divided by stabilized purchase price/development cost, and where income support arrangement in place, range is computed assuming nil to 50% of income support is released to Extendicare Overall average occupancy now at 75% 4

5 EMPIRE CROSSING RETIREMENT COMMUNITY 64 suites, combination independent/enhanced living Excess land for future expansion Extendicare also has an LTC in the community and manages one on behalf of a third party Empire Crossing Retirement Community, Port Hope, ON Growing demand for private-pay retirement living options 5

6 HARVEST RETIREMENT COMMUNITY 100 suites, combination independent/enhanced living Opened with 64 suites in 2011 and 36 suites added in December 2015 Harvest Retirement Community, Tillsonburg, ON 6

7 STONEBRIDGE CROSSING AND RIVERBEND CROSSING Stonebridge, Saskatoon, SK -116suites, combination independent/enhanced living Riverbend, Regina, SK 68 suite memory care community Expand our Saskatchewan service offering across the continuum 7

8 WEST PARK CROSSING AND YORKTON CROSSING Yorkton Crossing, Yorkton, SK 79 suites, combination independent/enhanced /memory care West Park Crossing, Moose Jaw, SK -79suites, combination independent/enhanced /memory care 8

9 RETIREMENT DEVELOPMENT PROJECTS Development pipeline under way with three projects in Simcoe, Bolton and Uxbridge, Ontario Combination independent/assisted living centres, totalling 304 suites Simcoe anticipated opening fall 2016 Bolton and Uxbridge spring 2017 Rendition of proposed Uxbridge project Internal developments complement acquisition strategy 9

10 NOI FROM CANADIAN OPERATING SEGMENTS * LTC Retirement Home Health Other Cdn 6% 12% 6% 24% 51% 70% 31% * * Pro forma stabilized NOI impact of completed/committed transactions Rebalancing across the senior care continuum 10

11 LONG-TERM CARE OPERATIONS Average Occupancy > Year 2015: Canada total 97.9% 9% Ontario Private Accommodation New 93.8% from 88.7% C 98.2% from 97.6% Extendicare LTC Average daily revenue rate 1.5% 1.9% $ $ $ LTC average daily rates +1.5% 2015 LTC Funding Increases/Annual Revenue Impact: ON accommodation, July 1 +$1.5M Alberta, April 1 +$1.4M Ontario wait list ~ 23,100 11

12 ONTARIO LTC REDEVELOPMENT PROGRAM Extendicare Maple View of Sault Ste. Marie (256 beds) Opened 2013 Program offers an enhanced level of capital funding and preferred accommodation rate We have 21 C centres to redevelop (3,287 beds) Currently evaluating viability of each project and developing the sequence / timeline Opportunity to grow preferred accommodation revenue 12

13 HOME HEALTH CARE OPERATIONS Service Volumes (hours/day) Same-store Home health acquisition SS +6.5% 110.5% 29,310 SS +1.2% 13,074 13,925 14, Largest private-sector home health care provider in Canada 13

14 OTHER CANADIAN OPERATIONS Management and group purchasing operations Extendicare Beds under Management Revenue +21% over % NOI +36% over % Beds under management +17% over Dec/14 Group purchasing clients +9% over Dec/14 4,360 5,470 6, Expertise drives success in ancillary services 14

15 FINANCIAL REVIEW YEAR

16 RESULTS YEAR 2015 Variance over 2014 Year Year favourable (unfavourable) ($ millions) ($) (%) Revenue $ $ $ % Net operating income $ $ % NOI margin 13.1% 13.2% (10) bps Adjusted EBITDA $ 86.4 $ % Adjusted EBITDA margin 8.8% 9.1% (30) bps AFFO (continuing) $ 44.6 $ % AFFO (total) $ 50.8 $ 73.7 (22.9) (31.0)% Current taxes (affecting AFFO) $ 9.9 $ 4.1 (5.8) (142.5)% FFO effective tax rate 19.4% 11.9% 16

17 REVENUE BY OPERATING SEGMENT YEAR 2015 Year Year Variance over 2014 favourable (unfavourable) ($ millions) ($) (%) Long-term care $ $ $ % Home health care (same-store) % Other % Canada (same-store) $ $ $ % Home health care (non same-store) store) Retirement living (non same-store) Total Canada $ $ $ % U.S. operations (continuing) % Total revenue $ $ $ % 17

18 NOI BY OPERATING SEGMENT & ADJ. EBITDA YEAR 2015 Year. Year. Variance over 2014 favourable (unfavourable) ($ millions) ($) (%) Long-term care $ 69.5 $ 68.6 $ % Home health care (same-store) (0.4) (1.9)% Other % Canada (same-store) $ $ 98.3 $ % Home health care (non same-store) Retirement living (non same-store) store) Total Canada $ $ 98.3 $ % U.S. operations (continuing) % Total NOI $ $ $ % Admin & lease costs Cdn. ops (29.2) (25.0) (4.2) (16.7)% Admin & lease costs U.S. ops (12.6) (8.4) (4.2) (51.2)% Adjusted EBITDA $ 86.4 $ 74.6 $ % 18

19 AFFO AND PAYOUT RATIO YEAR 2015 AFFO ($ / basic share) Cash distributions ($/share) $0.840 $0.579 $0.480 $ Payout ratio: 19

20 CASH AND LONG-TERM DEBT Balance (millions) Dec 31, 2015 Cash $104 Long-term debt (1) WAR WAM (yrs) Principal CMHC mortgages 4.2% 7 $151 Other mortgages 5.2% Finance lease obligations 7.0% convertible debentures 6.0% Total LTD 5.5% 9 $465 (1) Includes current portion, reflects converts at face and excludes financing costs. Net debt to pro forma home health care TTM EBITDA 39X 3.9 Gross Debt to GBV 28% 20

21 EXTENDICARE TODAY INVESTMENTS ACROSS THE COUNTRY AND THE CONTINUUM OF CARE * LONG-TERM CARE RETIREMENT LIVING * HOME HEALTH CARE , , centres beds centres suites locations 10.7M hours ** * centres/suites operated as at Feb. 22/16, pro forma for three retirement communities (304 suites) to be developed ** home health care hours annualized based on six months ended Dec. 31,

22 EXTENDICARE TOMORROW INTEGRATION ALONG THE CONTINUUM OF CARE Grow private-pay sources as a complement to government-funded services Be part of the solution to deliver triple aim of high quality, lower cost, and greater customer satisfaction HOME HEALTH CARE INDEPENDENT LIVING ASSISTED LIVING LONG-TERM CARE Delivering care where and when our customer needs it 22

23 DISCIPLINED INVESTMENT OF U.S. SALE PROCEEDS Completed/Committed Investments and Further Illustrative Additional Investment Operating Segment Investment ($millions) Completed Home Health Acquisition Home Care $ 84.3 Completed/Committed Investments Simcoe/Bolton/Uxbridge (ON) development projects Retirement 81.0 Empire Crossing (Port Hope, ON) Retirement 20.2 Harvest (Tillsonburg, ON) Retirement 28.4 Stonebridge and Riverbend (SK) Retirement 50.3 Moose Jaw and Yorkton (SK) Retirement 40.5 $304.7 Sources of Funds U.S. Sale Proceeds $291.0 Diversifying across the continuum of care 23

24 THE RIGHT CARE THE RIGHT TIME THE RIGHT PLACE The leading provider LEADER IN THE DELIVERY OF HIGH-QUALITY CARE AND SERVICES THE LEADING PROVIDER OF SENIORS CARE AND SERVICES ACROSS THE CONTINUUM AND THROUGHOUT CANADA of high-quality care and services PURE PLAY CANADIAN SENIOR CARE INVESTMENT GROWING OUR GROWING OUR GROWING OUR LONG-TERM CARE OPERATIONS HOME HEALTH CARE OPERATIONS RETIREMENT OPERATIONS THROUGH ACQUISITIONS AND DEVELOPMENT 24

25 EXTENDICARE S FAMILY OF BRANDS 25