Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Senior Housing Properties Trust — Q1 2018 Earnings Presentation
39 slides from Diversified Healthcare Trust's earnings presentation, May 9, 2018
Slide 1: First Quarter 2018 Supplemental Operating and Financial Data
Exhibit 99.2 Senior Housing Properties Trust First Quarter 2018 Supplemental Operating and Financial Data 845 N New Ballas Court, Creve Coeur, MO Major Tenant: Signature Health Services, Inc. Square Feet: 82,280 All amounts in this report are unaudited.
Slide 2: Table of Contents
TABLE OF CONTENTS PAGE CORPORATE INFORMATION 6 Company Profile 7 Investor Information 8 Research Coverage 9 FINANCIALS 10 Key Financial Data 11 Condensed Consolidated Balance Sheets 12 Condensed Consolidated Statements of Income 13 TABLE OF CONTENTS TABLE Condensed Consolidated Statements of Income
Slide 3: Warning Concerning Forward Looking Statements
WARNING CONCERNING FORWARD LOOKING STATEMENTS THIS PRESENTATION OF SUPPLEMENTAL OPERATING AND FINANCIAL DATA CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE WORD
Slide 4: Forward Looking Statements Risk Factors
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FUNDS F
Slide 5: Forward Looking Statements Risk Factors (continued)
• CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY, • ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE DEBT WILL BE HIGHER THA
Slide 6: Corporate Information
CORPORATE INFORMATION 21 Spurs Lane, San Antonio, TX Tenant: Ear Medical Group Square Feet: 125,000 Senior Housing Properties Trust 6 Supplemental Operating and Financial Data, March 31, 2018 6
Slide 7: Company Profile
COMPANY PROFILE The Company: Corporate Headquarters: Senior Housing Properties Trust, or SNH, we, our or us, is a real estate investment trust, or REIT, Two Newton Place which owns independent and assisted living communities, continuing care retirement 255 Washington Street Suite 300 communities, sk
Slide 8: Investor Information
INVESTOR INFORMATION Board of Trustees John L. Harrington Lisa Harris Jones Jeffrey P. Somers Independent Trustee Independent Trustee Lead Independent Trustee Jennifer B. Clark Adam D. Portnoy Managing Trustee Managing Trustee INVESTOR INFORMATION INVESTOR Senior Management Jennifer F. Francis Richa
Slide 9: Research Coverage
RESEARCH COVERAGE Equity Research Coverage Bank of America / Merrill Lynch JMP Securities Robert W. Baird & Co. Juan Sanabria Peter Martin Drew Babin (646) 855-1589 (415) 835-8904 (610) 238-6634 juan.sanabria@baml.com pmartin@jmpsecurities.com dbabin@wbaird.com Cantor Fitzgerald Morgan Stanley UBS J
Slide 10: Financials
FINANCIALS Granite Gate Senior Living, Prescott, AZ Tenant: Five Star Senior Living 127 Living Units Senior Housing Properties Trust 10 Supplemental Operating and Financial Data, March 31, 2018 10
Slide 11: Key Financial Data
KEY FINANCIAL DATA (dollars in thousands, except per share data) As of and For the Three Months Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Selected Balance Sheet Data: Total gross assets (1) $ 8,889,491 $ 8,748,496 $ 8,663,101 $ 8,610,002 $ 8,597,102 Total assets $ 7,384,064 $ 7,294,01
Slide 12: Condensed Consolidated Balance Sheets
CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share and per share data) As of As of March 31, 2018 December 31, 2017 ASSETS Real estate properties: Land $ 848,261 $ 824,879 Buildings and improvements 7,110,013 6,999,884 7,958,274 7,824,763 Accumulated depreciation (1,505,427) (
Slide 13: Condensed Consolidated Statements of Income
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands, except per share data) For the Three Months Ended March 31, 2018 2017 Revenues: Rental income $ 173,728 $ 166,443 Residents fees and services 102,087 98,118 Total revenues 275,815 264,561 Expenses: Property operating expenses 108,143
Slide 14: Condensed Consolidated Statements of Income (Additional Data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (ADDITIONAL DATA) (dollars in thousands) For the Three Months Ended March 31, 2018 2017 Additional Data: General and administrative expenses / total revenues (1) 9.1% 5.7% General and administrative expenses / total assets (at end of period) (1) 0.3% 0.2%
Slide 15: Condensed Consolidated Statements of Cash Flows
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) For the Three Months Ended March 31, 2018 2017 Cash flows from operating activities: Net income $ 237,405 $ 32,281 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 70,339
Slide 16: Condensed Consolidated Statements of Cash Flows (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (amounts in thousands) For the Three Months Ended March 31, 2018 2017 Increase (decrease) in cash and cash equivalents and restricted cash $ 5,920 $ (180) (CONTINUED) Cash and cash equivalents and restricted cash at beginning of period 47,3
Slide 17: Debt Summary
DEBT SUMMARY (dollars in thousands) As of March 31, 2018 Coupon Interest Principal Maturity Due at Years to Rate Rate (1) Balance (2) Date Maturity Maturity Unsecured Debt: Unsecured Floating Rate Debt: Unsecured revolving credit facility (LIBOR + 120 b.p.) (3) 2.936% 2.936% $ 55,000 1/15/2022 $ 55,
Slide 18: Debt Maturity Schedule
DEBT MATURITY SCHEDULE (dollars in thousands) As of March 31, 2018 Unsecured Unsecured Secured Floating % of Fixed % of Fixed Rate % of % of Year Rate Debt Total Rate Debt Total Debt (1) Total Total Total 2018 $ — $ — $ 94,233 $ 94,233 2019 — 400,000 52,135 452,135 2020 350,000 200,000 3,442 553,442
Slide 19: Leverage Ratios, Coverage Ratios and Public Debt Covenants
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS As of and For the Three Months Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Leverage Ratios: Total debt (1) / total gross assets (2) 41.4% 42.3% 41.4% 41.3% 40.9% Total debt (1) / gross book value of real estate assets (3) 42.6%
Slide 20: Summary of Capital Expenditures
SUMMARY OF CAPITAL EXPENDITURES (dollars and sq. ft. in thousands, except per sq. ft. and unit data) For the Three Months Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 MOB tenant improvements (1) $ 1,600 $ 3,487 $ 1,951 $ 1,575 $ 2,265 MOB leasing costs (2) 422 2,097 3,036 2,108 1,090 MOB
Slide 21: Property Acquisitions / Dispositions Information Since January 1, 2018
PROPERTY ACQUISITIONS / DISPOSITIONS INFORMATION SINCE JANUARY 1, 2018 (dollars and sq. ft. in thousands, except per sq. ft. and unit data) JANUARY 1, 2018 JANUARY Managed Senior Living Acquisitions: Number of Initial Properties Purchase Purchase Price Lease / Date Acquired Location Type of Property
Slide 22: Calculation and Reconciliation of NOI and Cash Basis NOI
CALCULATION AND RECONCILIATION OF NET OPERATING INCOME (NOI) AND CASH BASIS NOI (1) (amounts in thousands) For the Three Months Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Calculation of NOI and Cash Basis NOI: Revenues: Rental income $ 173,728 $ 179,585 $ 168,348 $ 166,647 $ 166,443 Re
Slide 23: Consolidated NOI and Cash Basis NOI
CONSOLIDATED NET OPERATING INCOME (NOI) AND CASH BASIS NOI (1) (dollars in thousands) For the Three Months Ended 3/31/2018 3/31/2017 % Change NOI: Triple Net Leased Senior Living Communities $ 67,975 $ 67,252 1.1% Managed Senior Living Communities 24,882 24,238 2.7% Total Senior Living Communities 9
Slide 24: Same Property NOI and Cash Basis NOI
SAME PROPERTY NOI AND CASH BASIS NOI (1) (dollars in thousands) For the Three Months Ended (2) 3/31/2018 3/31/2017 % Change NOI: Triple Net Leased Senior Living Communities $ 66,213 $ 65,128 1.7 % Managed Senior Living Communities 23,857 24,233 (1.6)% Total Senior Living Communities 90,070 89,361 0.
Slide 25: Reconciliation of NOI and Same Property NOI by Segment
CALCULATION AND RECONCILIATION OF NET OPERATING INCOME (NOI), CASH BASIS NOI, SAME PROPERTY NOI AND SAME PROPERTY CASH BASIS NOI BY SEGMENT (1) (dollars in thousands) For the Three Months Ended March 31, 2018 For the Three Months Ended March 31, 2017 Triple Net Triple Net Leased Managed Leased Manag
Slide 26: Calculation and Reconciliation of EBITDA and Adjusted EBITDA
CALCULATION AND RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (1) (amounts in thousands) For the Three Months Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Net income $ 237,405 $ 66,328 $ 35,793 $ 17,402 $ 32,281 Interest expense 43,552 40,625 40,105 40,800 43,488 Income tax expense 260 15
Slide 27: Calculation and Reconciliation of FFO and Normalized FFO
CALCULATION AND RECONCILIATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO (1) (amounts in thousands, except per share data) For the Three Months Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Net income attributable to common shareholders $ 236,022 $ 65,000 $ 34,414 $ 16,042 $ 32,15
Slide 28: Definitions of Certain Non-GAAP Financial Measures
DEFINITIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES NOI and Cash Basis NOI The calculations of NOI and Cash Basis NOI exclude certain components of net income in order to provide results that are more closely related to our property level results of operations. We calculate NOI and Cash Basis NOI as
Slide 29: Portfolio Information
PORTFOLIO INFORMATION 4505 Emperor Blvd, Durham, NC Tenant: Multiple Square Feet: 105,601 Senior Housing Properties Trust 29 Supplemental Operating and Financial Data, March 31, 2018 29
Slide 30: Portfolio Summary by Geographic Diversification and Property Type
PORTFOLIO SUMMARY BY GEOGRAPHIC DIVERSIFICATION AND PROPERTY TYPE Geographic Diversification Property Type (based on Cost of Real Estate Properties as of March 31, 2018) (1) (based on Q1 2018 NOI) (2) VA: 3% IN: 3% Wellness NC: 3% Centers: 3% MD: 4% WI: 4% Medical Independent Office: 20% GA: 5% Livi
Slide 31: Portfolio Summary by Property Type and Tenant
PORTFOLIO SUMMARY BY PROPERTY TYPE AND TENANT (dollars in thousands, except investment per unit or square foot) As of March 31, 2018 Number of Number of Units Carrying Value % of Total Investment per Unit Q1 2018 % of Q1 201 % of Q1 2018 Properties or Square Feet of Investment (1) Investment or Squa
Slide 32: Occupancy by Property Type and Tenant
OCCUPANCY BY PROPERTY TYPE AND TENANT (1) For the Twelve Months Ended (2) 12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 Property Type: Independent living 85.4% 85.7% 86.7% 86.3% 86.3% Assisted living 83.8% 84.5% 84.8% 85.2% 85.9% Skilled nursing facilities 76.1% 76.5% 77.2% 78.2% 78.5% Weighte
Slide 33: Rent Coverage by Tenant
RENT COVERAGE BY TENANT (TRIPLE NET LEASED SENIOR LIVING COMMUNITIES AND WELLNESS CENTERS) (1) For the Twelve Months Ended Tenant 12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 Five Star 1.15x 1.15x 1.16x 1.17x 1.19x AND WELLNESS CENTERS) Brookdale Senior Living 2.30x 2.38x 2.44x 2.53x 2.59x 11
Slide 34: Triple Net Leased Senior Living Communities Segment - Results of Operations
TRIPLE NET LEASED SENIOR LIVING COMMUNITIES SEGMENT - RESULTS OF OPERATIONS (1) (dollars in thousands) As of and For the Three Months Ended March 31, 2018 2017 Number of Properties 233 236 Number of Units 24,947 26,220 Occupancy (2) 82.8% 84.5% Rent Coverage (2) 1.20x 1.26x Rental Income $ 67,975 $
Slide 35: Managed Senior Living Communities Segment - Results of Operations
MANAGED SENIOR LIVING COMMUNITIES SEGMENT - RESULTS OF OPERATIONS (dollars in thousands, except average monthly rate) As of and For the Three Months Ended March 31, 2018 2017 Number of Properties (1) 72 68 Number of Units (1) 9,258 8,798 Occupancy 85.8 % 86.0% Average Monthly Rate (2) $ 4,308 $ 4,32
Slide 36: MOB Portfolio Segment - Results of Operations
MOB PORTFOLIO SEGMENT - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended March 31, 2018 As of and For the Three Months Ended March 31, 2017 Life Science Medical Office Total MOB Life Science Medical Office Total MOB Number of Properties 25 104 129 20 100
Slide 37: MOB Leasing Summary
MOB LEASING SUMMARY (dollars and sq. ft. in thousands, except per sq. ft. data) As of and For the Three Months Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Properties 129 125 121 120 120 Buildings 155 151 147 146 146 Total sq. ft. (1) 12,602 12,066 11,611 11,552 11,552 Occupancy (2) 95.1
Slide 38: Tenants Representing 1% or More of Total Annualized Rental Income
TENANTS REPRESENTING 1% OR MORE OF TOTAL ANNUALIZED RENTAL INCOME (dollars in thousands) As of March 31, 2018 % of RENTAL INCOME RENTAL Annualized Annualized Rental Tenant Facility Type Rental Income (1) Income (1) Expiration 1 Five Star Senior Living Inc. Senior living $ 212,463 27.0% 2024 - 2032 2
Slide 39: Portfolio Lease Expiration Schedule
PORTFOLIO LEASE EXPIRATION SCHEDULE (dollars in thousands) As of March 31, 2018 Annualized Rental Income (1) Cumulative Percent of Total Percentage of Senior Living Wellness Annualized Rental Annualized Rental Year Communities (2) MOBs Centers Total Income Expiring Income Expiring 2018 $ 1,828 (3) $
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