Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q2 2024 Earnings Presentation
43 slides from Diversified Healthcare Trust's earnings presentation, Aug 1, 2024
Slide 1: Second Quarter 2024 Financial Results and Supplemental Information
Diversified Healthcare Trust Second Quarter 2024 Financial Results and Supplemental Information August 1, 2024 Premier Residences of Plantation 8500 W. Sunrise Blvd. Plantation, FL Exhibit 99.2
Slide 2: Table of Contents
Q2 2024 2 FINANCIAL RESULTS Diversified Healthcare Trust Announces Second Quarter 2024 Financial Results ........................................................................................ 3 Second Quarter 2024 Highlights .........................................................................
Slide 3: DHC Announces Second Quarter 2024 Financial Results
Q2 2024 3 "In the second quarter, DHC exceeded expectations for normalized FFO due to revenue growth and expense management. These results were supported by a 27% year over year increase in SHOP same property NOI and occupancy and rent growths. Within our Medical Office and Life Science Portfolio, w
Slide 4: Second Quarter 2024 Highlights
Q2 2024 4 Financial Results Second Quarter 2024 Highlights RETURN TO TABLE OF CONTENTS Operating Update Liquidity, Financing and Investing Activities • Net loss of $97.9 million, or $0.41 per share. • Normalized FFO of $6.8 million, or $0.03 per share. • Leased 101,047 square feet in DHC's Medical O
Slide 5: Second Quarter 2024 Results
Q2 2024 5 Second Quarter 2024 Results RETURN TO TABLE OF CONTENTS For the Three Months Ended Financial Results June 30, 2024 March 31, 2024 Change June 30, 2023 Change Net loss $ (97,861) $ (86,259) (13.5) % $ (72,571) (34.8) % Net loss per share $ (0.41) $ (0.36) (13.9) % $ (0.30) (36.7) % Normaliz
Slide 6: Key Financial Data
Q2 2024 6 Key Financial Data RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Selected Balance Sheet Data: Total gross assets $ 7,440,385 $ 7,410,364 $ 7,466,979 $ 7,496,204 $ 7,493,885 Total assets $ 5,333,447 $ 5,348,037 $ 5,446,13
Slide 7: Condensed Consolidated Balance Sheets
Q2 2024 7 June 30, 2024 December 31, 2023 Assets Real estate properties: Land $ 635,792 $ 652,977 Buildings and improvements 6,126,130 6,165,490 Total real estate properties, gross 6,761,922 6,818,467 Accumulated depreciation (2,106,938) (2,020,843) Total real estate properties, net 4,654,984 4,797,
Slide 8: Condensed Consolidated Statements of Income (Loss)
Q2 2024 8 For the Three Months Ended June 30, For the Six Months Ended June 30, 2024 2023 2024 2023 Revenues: Rental income $ 62,870 $ 61,373 $ 125,520 $ 127,811 Residents fees and services 308,522 284,846 616,648 564,438 Total revenues 371,392 346,219 742,168 692,249 Expenses: Property operating ex
Slide 9: Condensed Consolidated Statements of Income (Loss) (Additional Data)
Q2 2024 9 For the Three Months Ended June 30, For the Six Months Ended June 30, 2024 2023 2024 2023 Additional Data: General and administrative expenses / total assets (at end of period) 0.1 % 0.1 % 0.3 % 0.2 % Business management incentive fees included in general and administrative expenses $ (849
Slide 10: Debt Summary
Q2 2024 10 Coupon Interest Principal Maturity Due at Years to Rate Rate Balance Date Maturity Maturity Unsecured Fixed Rate Debt: Senior unsecured notes due 2025 (1) (2) 9.750% 9.750% $ 440,000 6/15/2025 $ 440,000 1.0 Senior unsecured notes due 2028 4.750% 4.966% 500,000 2/15/2028 500,000 3.6 Senior
Slide 11: Debt Maturity Schedule
Q2 2024 11 $440,000 $500,000 $500,000 $600,000 $600 $1,971 $941,412 $280 $299 $319 $340 $363 $387 $125,997 Unsecured Fixed Rate Debt Secured Fixed Rate Debt 2024 2025 2026 2027 2028 2029 2030 2031 2032 Thereafter $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 Debt Maturity Schedule (1) RETURN TO
Slide 12: Leverage Ratios, Coverage Ratios and Bond Covenants
Q2 2024 12 Leverage Ratios, Coverage Ratios and Bond Covenants RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Leverage Ratios: Net debt / total gross assets 38.3% 38.4% 37.6% 33.8% 32.8% Net debt / gross book value of real estate a
Slide 13: Summary of Capital Expenditures
Q2 2024 13 (dollars and sq. ft. in thousands, except per sq. ft. and unit data) Summary of Capital Expenditures RETURN TO TABLE OF CONTENTS For the Three Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Medical Office and Life Science Portfolio: Lease related costs $ 6,409 $ 6,029 $ 1
Slide 14: Redevelopment Information
Q2 2024 14 DHC does not have any significant ongoing redevelopments as of June 30, 2024. (1) Reflects units prior to redevelopment. Redevelopment Information (dollars in millions) RETURN TO TABLE OF CONTENTS Medical Office and Life Science Portfolio As of June 30, 2024 Project Location Type of Prope
Slide 15: Property Acquisitions / Dispositions Information
Q2 2024 15 Property Acquisitions / Dispositions Information Since January 1, 2024 Acquisitions: DHC has not acquired any properties since January 1, 2024. Dispositions: Date Sold Location Type of Property Number of Properties Gross Sales Price 3/28/2024 Phoenix, AZ Medical Office 1 $ 3,600 6/3/2024
Slide 16: Investments in Unconsolidated Joint Ventures
Q2 2024 16 Investments in Unconsolidated Joint Ventures (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of June 30, 2024 Three Months Ended June 30, 2024 Joint Venture Location Type of Property Number of Properties Square Feet Occupancy Weighted Average Lease Term DHC Ownership DHC Carryin
Slide 17: Investments in Unconsolidated Joint Ventures (continued)
Q2 2024 17 Investments in Unconsolidated Joint Ventures (continued) (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of June 30, 2024 (1) DHC's property list, including properties owned by these unconsolidated joint ventures, is available on DHC's website. (2) Based on the aggregate annuali
Slide 18: Portfolio Summary by Geographic Diversification and Property Type
Q2 2024 18 FL: 10% CA: 9% TX: 9% GA: 7% NC: 4% MD: 4% WI: 4% VA: 4% IN: 4% IL: 4% 26 Other States + D.C.: 41% (based on Gross Book Value of Real Estate Assets as of June 30, 2024) (1) Senior living communities are categorized by the type of living units which constitute a majority of the living unit
Slide 19: Portfolio Summary
Q2 2024 19 Portfolio Summary RETURN TO TABLE OF CONTENTS (dollars in thousands, except investment per square foot or unit) As of June 30, 2024 Number of Properties Square Feet or Number of Units Gross Book Value of Real Estate Assets % of Total Gross Book Value of Real Estate Assets Investment Per S
Slide 20: SHOP Units by Operator
Q2 2024 20 SHOP Units by Operator RETURN TO TABLE OF CONTENTS Unit Count as of June 30, 2024 Manager Location Number of Properties (1) Assisted Living Independent Living and Active Adult Memory Care Skilled Nursing Total Five Star Senior Living Various (28 States) 119 6,459 9,640 1,555 — 17,654 Oaks
Slide 21: Senior Living NOI by Manager
Q2 2024 21 Senior Living NOI by Manager RETURN TO TABLE OF CONTENTS Q2 2024 NOI Manager Number of Properties SHOP Triple Net Leased Senior Living Communities Total NOI % of Total Q2 2024 NOI (1) Five Star Senior Living 119 $ 23,659 $ — $ 23,659 69.1% Phoenix Senior Living 23 2,556 — 2,556 7.5% Stell
Slide 22: Senior Living Results of Operations by Location
Q2 2024 22 Senior Living Results of Operations by Location RETURN TO TABLE OF CONTENTS Q2 2024 NOI Core-Based Statistical Areas Number of Properties SHOP Triple Net Leased Senior Living Communities Total NOI % of Total Q2 2024 NOI Washington, DC 6 $ 2,159 $ — $ 2,159 6.3% Tampa, FL 2 1,738 — 1,738 5
Slide 23: Medical Office and Life Science Results of Operations
Q2 2024 23 (1) Same property includes those properties classified as same property for the three months ended June 30, 2024 for all periods presented. RETURN TO TABLE OF CONTENTS CONSOLIDATED RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended 6/30/2024 3/31
Slide 24: Life Science and Medical Office Results of Operations
Q2 2024 24RETURN TO TABLE OF CONTENTS CONSOLIDATED RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended June 30, 2024 As of and For the Three Months Ended June 30, 2023 Life Science Medical Office Total Medical Office and Life Science Portfolio Life Science M
Slide 25: SHOP Segment and Same Property - Results of Operations
Q2 2024 25 SHOP Segment and Same Property - Results of Operations RETURN TO TABLE OF CONTENTS CONSOLIDATED RESULTS OF OPERATIONS As of and For the Three Months Ended 6/30/2024 3/31/2024 6/30/2023 Number of Properties 232 232 234 Number of Units 25,230 25,220 25,322 Occupancy 79.0 % 78.9 % 77.8 % Ave
Slide 26: SHOP Segment - Five Star and Other Operator Managed Communities
Q2 2024 26RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended June 30, 2024 As of and For the Three Months Ended June 30, 2023 Five Star Managed Communities Other Operator Managed Communities Total SHOP Segment Five Star Managed Communities Other Operator Managed Communities Total SHOP
Slide 27: Portfolio Leasing Summary
Q2 2024 27 Portfolio Leasing Summary (1) (1) The leasing summary on this page is based on leases entered into during the periods indicated. (2) Leasing data is only presented for periods in which there is leasing activity. (3) Percent difference in prior rents charged for same space or, in the case
Slide 28: Tenants Representing 1% Or More of Total Annualized Rental Income
Q2 2024 28 As of June 30, 2024 Tenants Representing 1% Or More of Total Annualized Rental Income RETURN TO TABLE OF CONTENTS (dollars in thousands) Type of Property Annualized Rental Income % of Annualized Rental Income Expiration 1 Advocate Aurora Health Medical office $ 16,939 6.6% 2026 - 2031 2 L
Slide 29: Medical Office and Life Science Portfolio Lease Expiration Schedule
Q2 2024 29 Medical Office and Life Science Portfolio Lease Expiration Schedule RETURN TO TABLE OF CONTENTS (dollars in thousands) As of June 30, 2024 Annualized Rental Income Expiring (1) Year Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total Annual
Slide 30: Non-Segment Lease Expiration Schedule
Q2 2024 30 Annualized Rental Income Expiring Year Number of Properties Number of Units or Square Feet Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total Annualized Rental Income Expiring 2024 — — $ — —% —% 2025 — — — —% —% 2026 — — — —% —% 2027 4 533
Slide 31: The Company
Q2 2024 31 The Company: DHC is a REIT focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum by care delivery and practice type, by scientific research disciplines and by property type and location. As
Slide 32: Board of Trustees and Executive Officers
Q2 2024 32 Board of Trustees Christopher J. Bilotto John L. Harrington Managing Trustee Independent Trustee Lisa Harris Jones Phyllis M. Hollis Lead Independent Trustee Independent Trustee Dawn K. Neher Adam D. Portnoy Independent Trustee Chair of the Board & Managing Trustee Jeffrey P. Somers Indep
Slide 33: Calculation and Reconciliation of NOI and Cash Basis NOI
Q2 2024 33 Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Six Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Calculation of NOI and Cash Basis NOI: Revenues: Rental in
Slide 34: Reconciliation of NOI by Segment
Q2 2024 34 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment RETURN TO TABLE OF CONTENTS (dollars in thousands) For the Three Months Ended June 30, 2024 For the Three Months Ended March 31, 2024 For the Three Months Ended June 30, 20
Slide 35: Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
Q2 2024 35 Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Net loss $ (97,861) $ (86,259) $ (102,564) $ (65,779) $ (72,571) $ (18
Slide 36: Reconciliation of FFO, Normalized FFO and CAD
Q2 2024 36 Calculation and Reconciliation of FFO, Normalized FFO and CAD (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Six Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Net loss $ (97,861) $ (86,259) $ (102,564) $ (65,779)
Slide 37: Reconciliation of FFO, Normalized FFO and CAD (continued)
Q2 2024 37 Calculation and Reconciliation of FFO, Normalized FFO and CAD (continued) (amounts in thousands, except per share data) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Six Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Normalized FFO $ 6
Slide 38: Non-GAAP Financial Measures
Q2 2024 38 Non-GAAP Financial Measures DHC presents certain "non-GAAP financial measures" within the meaning of applicable rules of the SEC, including net operating income, or NOI, Cash Basis NOI, same property NOI, same property Cash Basis NOI, earnings before interest, income tax, depreciation and
Slide 39: Definitions: Adjusted Total Assets and Other Terms
Q2 2024 39 Adjusted total assets Adjusted total assets is the original cost of real estate assets calculated in accordance with GAAP before depreciation and after impairment write downs, if any, and excludes accounts receivable and intangible assets. AlerisLife AlerisLife means AlerisLife Inc. Annua
Slide 40: Definitions: Development, Redevelopment and Other Activities
Q2 2024 40 Development, redevelopment and other activities Development, redevelopment and other activities generally include capital expenditures that reposition a property or result in new sources of revenue. From time to time DHC invests in revenue producing capital improvements at certain of its
Slide 41: Definitions: Non-Segment and Related Terms
Q2 2024 41 Non-Segment Non-Segment operations consists of triple net leased senior living communities and wellness centers that are leased to third party operators from which DHC receives rents, and any other income or expenses that are not attributable to a specific reporting segment. Occupancy Occ
Slide 42: Definitions: SNF, SOFR and Other Terms
Q2 2024 42 SNF SNF is a skilled nursing facility. SOFR SOFR is the one month term secured overnight financing rate. Square feet Square feet measurements are subject to modest changes when space is periodically remeasured or reconfigured for new tenants. Square feet for prior periods exclude space re
Slide 43: Forward-Looking Statements
Q2 2024 43 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “
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