Diversified Healthcare Trust · NASDAQ:DHC

Diversified Healthcare Trust — Q1 2023 Earnings Presentation

45 slides from Diversified Healthcare Trust's earnings presentation, May 8, 2023

  1. Slide 1: First Quarter 2023 Financial Results and Supplemental Information

    Diversified Healthcare Trust First Quarter 2023 Financial Results and Supplemental Information Exhibit 99.2 Torrey Pines San Diego, CA May 8, 2023

  2. Slide 2: Table of Contents

    Q1 2023 2 FINANCIAL RESULTS Diversified Healthcare Trust Announces First Quarter 2023 Financial Results .............................................................................................. 3 First Quarter 2023 Highlights .....................................................................

  3. Slide 3: Diversified Healthcare Trust Announces First Quarter 2023 Financial Results

    Q1 2023 3 "First quarter normalized FFO of $0.05 per share represented an improvement of over $34 million from the prior year. These results reflected continued improvement in our SHOP segment, where net operating income increased over $17 million from the prior year and over $9 million from the fou

  4. Slide 4: First Quarter 2023 Highlights

    Q1 2023 4 Financial Results First Quarter 2023 Highlights RETURN TO TABLE OF CONTENTS Operating Update Financing Activities and Liquidity • Net loss of $52.7 million, or $0.22 per share. • Normalized FFO of $12.5 million, or $0.05 per share. • Leased 72,351 square feet in DHC's Office Portfolio at w

  5. Slide 5: First Quarter 2023 Results

    Q1 2023 5 First Quarter 2023 Results RETURN TO TABLE OF CONTENTS For the Three Months Ended Financial Results March 31, 2023 December 31, 2022 Change March 31, 2022 Change Net (loss) income $ (52,658) $ (65,322) 19.4 % $ 240,423 (121.9) % Net (loss) income per common share $ (0.22) $ (0.27) 18.5 % $

  6. Slide 6: Key Financial Data

    Q1 2023 6 Key Financial Data RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Selected Balance Sheet Data: Total gross assets $ 7,545,727 $ 7,830,445 $ 7,857,421 $ 7,884,243 $ 8,465,059 Total assets $ 5,666,730 $ 6,002,093 $ 6,072,48

  7. Slide 7: Condensed Consolidated Balance Sheets

    Q1 2023 7 March 31, 2023 December 31, 2022 Assets Real estate properties: Land $ 666,797 $ 668,918 Buildings and improvements 6,056,766 6,023,625 Total real estate properties, gross 6,723,563 6,692,543 Accumulated depreciation (1,878,997) (1,828,352) Total real estate properties, net 4,844,566 4,864

  8. Slide 8: Condensed Consolidated Statements of Income (Loss)

    Q1 2023 8 For the Three Months Ended March 31, 2023 2022 Revenues: Rental income $ 66,438 $ 65,285 Residents fees and services 279,592 245,448 Total revenues 346,030 310,733 Expenses: Property operating expenses 286,080 268,742 Depreciation and amortization 64,800 57,259 General and administrative 5

  9. Slide 9: Condensed Consolidated Statements of Income (Loss) (Additional Data)

    Q1 2023 9 For the Three Months Ended March 31, 2023 2022 Additional Data: General and administrative expenses / total assets (at end of period) 0.1 % 0.1 % Non-cash straight line rent adjustments included in rental income $ 2,448 $ 1,745 Lease value amortization included in rental income $ 311 $ (10

  10. Slide 10: Debt Summary

    Q1 2023 10 Coupon Interest Principal Maturity Due at Years to Rate Rate Balance Date Maturity Maturity Secured Floating Rate Debt: Credit facility (1) 7.820% 7.820% $ 450,000 1/15/2024 $ 450,000 0.8 Weighted average rate / total secured floating rate debt 7.820% 7.820% $ 450,000 $ 450,000 0.8 Unsecu

  11. Slide 11: Debt Maturity Schedule

    Q1 2023 11 $450,000 $250,000 $500,000 $500,000 $500,000 $600,000 $15,875 $1,834 $2,001 $904 $302 $315 $330 $346 $362 $7,261 Secured Floating Rate Debt Unsecured Fixed Rate Debt Secured Fixed Rate Debt 2023 2024 2025 2026 2027 2028 2029 2030 2031 Thereafter $0 $100,000 $200,000 $300,000 $400,000 $500

  12. Slide 12: Leverage Ratios, Coverage Ratios and Public Debt Covenants

    Q1 2023 12 Leverage Ratios, Coverage Ratios and Public Debt Covenants RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Leverage Ratios: Net debt / total gross assets 32.4% 30.6% 29.2% 28.4% 25.2% Net debt / gross book value of real e

  13. Slide 13: Summary of Capital Expenditures

    Q1 2023 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 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Office Portfolio lease related costs $ 6,748 $ 9,558 $ 4,277 $ 4,633 $ 6,759 Offic

  14. Slide 14: Redevelopment Information

    Q1 2023 14 Project Location Type of Property Square Feet (1) Estimated Project Costs Total Costs Incurred as of March 31, 2023 Estimated Completion Date 10030 North MacArthur Boulevard Irving, TX Medical Office 94,137 $ 3.5 $ 2.5 Q2 2023 100 Hampshire Street Mansfield, MA Life Science 124,803 21.2 $

  15. Slide 15: Property Acquisitions / Dispositions Information

    Q1 2023 15 Property Acquisitions / Dispositions Information Since January 1, 2023 Acquisitions: DHC has not acquired any properties since January 1, 2023. Dispositions: Date Sold Location Type of Property Number of Properties Gross Sales Price 2/3/2023 Columbia, SC Senior Living (1) 1 $ 1,100 2/28/2

  16. Slide 16: Investments in Unconsolidated Joint Ventures

    Q1 2023 16 Investments in Unconsolidated Joint Ventures (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of March 31, 2023 Three Months Ended March 31, 2023 Joint Venture Location Type of Property Number of Properties Square Feet Occupancy at March 31, 2023 Weighted Average Lease Term at Ma

  17. Slide 17: Investments in Unconsolidated Joint Ventures (continued)

    Q1 2023 17 Investments in Unconsolidated Joint Ventures (continued) (1) (dollars in thousands) RETURN TO TABLE OF CONTENTS As of March 31, 2023 (1) DHC's property list, including properties owned by these unconsolidated joint ventures, is available on DHC's website. (2) Based on the aggregate annual

  18. Slide 18: Portfolio Summary by Geographic Diversification and Property Type

    Q1 2023 18 FL: 10% CA: 9% TX: 9% GA: 6% MD: 5% NC: 4% WI: 4% VA: 4% IL: 4% IN: 4% 26 Other States + D.C.: 41% (based on Gross Book Value of Real Estate Assets as of March 31, 2023) (1) Senior living communities are categorized by the type of living units which constitute a majority of the living uni

  19. Slide 19: Portfolio Summary

    Q1 2023 19 Portfolio Summary RETURN TO TABLE OF CONTENTS (dollars in thousands, except investment per square foot or unit) As of March 31, 2023 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

  20. Slide 20: SHOP Units by Operator

    Q1 2023 20 SHOP Units by Operator RETURN TO TABLE OF CONTENTS Unit Count as of March 31, 2023 Manager Location Number of Properties (1) Assisted Living Independent Living and Active Adult Memory Care Skilled Nursing Total Five Star Senior Living National 119 6,488 9,672 1,544 — 17,704 Oaks-Caravita

  21. Slide 21: Office Portfolio - Results of Operations

    Q1 2023 21 (1) Same property includes those properties classified as same property for the three months ended March 31, 2023 for all periods presented. RETURN TO TABLE OF CONTENTS OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended 3/31/20

  22. Slide 22: Office Portfolio - Results of Operations (Life Science and Medical Office)

    Q1 2023 22RETURN TO TABLE OF CONTENTS OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) As of and For the Three Months Ended March 31, 2023 As of and For the Three Months Ended March 31, 2022 Life Science Medical Office Total Office Portfolio Life Science Medical Office Tot

  23. Slide 23: SHOP Segment and Same Property - Results of Operations

    Q1 2023 23 SHOP Segment and Same Property - Results of Operations RETURN TO TABLE OF CONTENTS SHOP SEGMENT - RESULTS OF OPERATIONS As of and For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Number of Properties 234 237 234 234 234 Number of Units 25,327 25,346 25,078 25,

  24. Slide 24: SHOP Segment - Results of Operations

    Q1 2023 24RETURN TO TABLE OF CONTENTS SHOP SEGMENT - RESULTS OF OPERATIONS As of and For the Three Months Ended March 31, 2023 As of and For the Three Months Ended March 31, 2022 Five Star Managed Communities Other Operator Managed Communities(1) Total SHOP Segment Five Star Managed Communities Othe

  25. Slide 25: Portfolio Leasing Summary

    Q1 2023 25 Portfolio Leasing Summary (1) (1) The leasing summary on this page is based on leases entered into during the periods indicated. (2) Percent difference in prior rents charged for same space or, in the case of vacant space acquired, market rental rates for similar space in the building at

  26. Slide 26: Tenants Representing 1% or More of Total Annualized Rental Income

    Q1 2023 26 As of March 31, 2023 Tenants Representing 1% Or More of Total Annualized Rental Income RETURN TO TABLE OF CONTENTS (dollars in thousands) Tenant Type of Property Annualized Rental Income % of Annualized Rental Income Expiration 1 Advocate Aurora Health Medical office $ 16,939 6.4% 2026-20

  27. Slide 27: Office Portfolio Lease Expiration Schedule

    Q1 2023 27 Office Portfolio Lease Expiration Schedule RETURN TO TABLE OF CONTENTS (dollars in thousands) As of March 31, 2023 Office Portfolio Annualized Rental Income Expiring Year Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total Annualized Rental

  28. Slide 28: Non-Segment Lease Expiration Schedule

    Q1 2023 28 Non-Segment 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 2023 — — $ — —% —% 2024 — — — —% —% 2025 3 129,500

  29. Slide 29: The Company

    Q1 2023 29 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

  30. Slide 30: Board of Trustees and Executive Officers

    Q1 2023 30 Board of Trustees John L. Harrington Lisa Harris Jones Daniel F. LePage Independent Trustee Lead Independent Trustee Independent Trustee David A. Pierce Jeffrey P. Somers Independent Trustee Independent Trustee Jennifer F. Francis Adam D. Portnoy Managing Trustee Chair of the Board & Mana

  31. Slide 31: Non-GAAP Financial Measures

    Q1 2023 31 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

  32. Slide 32: Definitions

    Q1 2023 32 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

  33. Slide 33: Definitions (continued)

    Q1 2023 33 GAAP GAAP is U.S. generally accepted accounting principles. Gross book value of real estate assets Gross book value of real estate assets is real estate assets at cost plus certain acquisition costs, before depreciation and purchase price allocations, less impairment writedowns, if any. G

  34. Slide 34: Definitions (continued)

    Q1 2023 34 Office Portfolio Office Portfolio consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. DHC's medical office and life science property leases incl

  35. Slide 35: Calculation and Reconciliation of NOI and Cash Basis NOI

    Q1 2023 35 Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Calculation of NOI and Cash Basis NOI: Revenues: Rental income $ 66,438 $ 68,973 $ 63,960 $ 62,522 $ 65

  36. Slide 36: NOI and Cash Basis NOI

    Q1 2023 36 For the Three Months Ended 3/31/2023 3/31/2022 $ Change % Change 12/31/2022 $ Change % Change NOI: Life Science $ 12,197 $ 7,291 $ 4,906 67.3 % $ 14,848 $ (2,651) (17.9) % Medical Office 21,310 24,259 (2,949) (12.2) % 20,034 1,276 6.4 % Total Office Portfolio 33,507 31,550 1,957 6.2 % 34,

  37. Slide 37: Same Property NOI and Cash Basis NOI

    Q1 2023 37 Same Property NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2023 3/31/2022 $ Change % Change 12/31/2022 $ Change % Change NOI: Life Science $ 7,265 $ 6,023 $ 1,242 20.6 % $ 7,124 $ 141 2.0 % Medical Office 21,933 22,193 (260) (1.

  38. Slide 38: Reconciliation of NOI by Segment: Office Portfolio

    Q1 2023 38 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) Office Portfolio For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2023 12/31/2022 9/30/2022 6/30/20

  39. Slide 39: Reconciliation of NOI by Segment: SHOP

    Q1 2023 39 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment (continued) RETURN TO TABLE OF CONTENTS (dollars in thousands) SHOP For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2023 12/31/2022 9/30/2022 6/30/20

  40. Slide 40: Reconciliation of NOI by Segment: Non-Segment

    Q1 2023 40 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment (continued) RETURN TO TABLE OF CONTENTS (dollars in thousands) Non-Segment For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2023 12/31/2022 9/30/2022

  41. Slide 41: Reconciliation of NOI by Segment: Consolidated

    Q1 2023 41 Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash Basis NOI by Segment (continued) RETURN TO TABLE OF CONTENTS (dollars in thousands) Consolidated For the Three Months Ended Calculation of NOI and Cash Basis NOI: 3/31/2023 12/31/2022 9/30/2022

  42. Slide 42: Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre

    Q1 2023 42 Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Net (loss) income $ (52,658) $ (65,322) $ (81,492) $ (109,383) $ 240,423 Interest expense 47,780 49,341 46,936 55,9

  43. Slide 43: Calculation and Reconciliation of FFO and Normalized FFO

    Q1 2023 43 Calculation and Reconciliation of FFO and Normalized FFO (amounts in thousands, except per share data) RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Net (loss) income $ (52,658) $ (65,322) $ (81,492) $ (109,383) $ 240,423 Depreci

  44. Slide 44: Forward-Looking Statements

    Q1 2023 44 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”, “

  45. Slide 45: Risk Factors and Important Additional Information About the Merger

    Q1 2023 45 These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in DHC's periodic filings. The information contained in DHC's filings with the SEC, including under the caption “Risk Factors” in its period

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