Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q2 2020 Earnings Presentation
43 slides from Diversified Healthcare Trust's earnings presentation, Aug 6, 2020
Slide 1: Second Quarter 2020 Supplemental Operating and Financial Data
MEE DIVERSIFIED Exhibit 99.2 oat HEALTHCARE DHC TRUST Nasdaq Listed | 1145 19th Street NW, Washington, D.C. . Multi-Tenant Square Feet: 139,748 SECOND QUARTER 2020 SUPPLEMENTAL OPERATING AND FINANCIAL DATA All amounts in this report are unaudited
Slide 2: Table of Contents
TABLE OF CONTENTS PAGE CORPORATE INFORMATION 3 Company Profile .................................................................................................................................................................................................................... 4 Investor Information..
Slide 3: Corporate Information
CORPORATE INFORMATION 2904 Orchard Parkway, San Jose, CA Tenant: Complete Genomics, Inc. Square Feet: 78,979
Slide 4: Company Profile
COMPANY PROFILE The Company: Corporate Headquarters: Diversified Healthcare Trust, or DHC, we, our or us, is a real estate investment trust, or REIT, which owns healthcare related properties including medical office and life science buildings, senior living communities and Two Newton Place wellness
Slide 5: Investor Information
INVESTOR INFORMATION Board of Trustees Jennifer B. Clark John L. Harrington Lisa Harris Jones Managing Trustee Independent Trustee Lead Independent Trustee Daniel F. LePage Adam D. Portnoy Jeffrey P. Somers Independent Trustee Chair of the Board & Managing Trustee Independent Trustee INVESTOR INFORM
Slide 6: Research Coverage
RESEARCH COVERAGE Equity Research Coverage B. Riley FBR BofA Securities JMP Securities Bryan Maher Joshua Dennerlein Aaron Hecht (646) 885-5423 (646) 855-1681 (415) 835-3963 bmaher@brileyfbr.com joshua.dennerlein@bofa.com ahecht@jmpsecurities.com Morgan Stanley Raymond James RBC Capital Markets Vikr
Slide 7: Financials
FINANCIALS 8348 & 8400 Washington Avenue, Racine, WI Tenant: Aurora Health Care, inc. Square Feet: 82,154
Slide 8: Key Financial Data
KEY FINANCIAL DATA (dollars in thousands, except per share data) As of and For the Three Months Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Selected Balance Sheet Data: Total gross assets $ 8,266,767 $ 8,316,051 $ 8,224,627 $ 8,572,131 $ 8,713,990 Total assets $ 6,600,523 $ 6,703,723 $
Slide 9: Condensed Consolidated Balance Sheets
CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share data) As of As of June 30, 2020 December 31, 2019 Assets Real estate properties: Land $ 799,462 $ 793,123 Buildings and improvements 6,720,113 6,668,463 Total real estate properties, gross 7,519,575 7,461,586 Accumulated depre
Slide 10: Condensed Consolidated Statements of Income (Loss)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (amounts in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Revenues: Rental income $ 106,207 $ 153,097 $ 216,705 $ 311,338 Residents fees and services 304,104 108,906 636,0
Slide 11: Condensed Consolidated Statements of Income (Loss) (Additional Data)
DATA) DATA) CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (ADDITIONAL DATA) (dollars in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Additional Data: General and administrative expenses / total assets (at end of period) 0.1% 0.1% 0.2% 0.3%
Slide 12: Debt Summary
DEBT SUMMARY (dollars in thousands) As of June 30, 2020 Coupon Interest Principal Maturity Due at Years to Rate Rate (1) Balance (2) Date Maturity Maturity Unsecured Floating Rate Debt: Unsecured $1,000,000 revolving credit facility (3) 2.550% 2.550% $ — 1/15/2022 $ — 1.5 Unsecured term loan 2.434%
Slide 13: Debt Maturity Schedule
DEBT MATURITY SCHEDULE (dollars in thousands) As of June 30, 2020 Unsecured Unsecured Secured Floating % of Fixed % of Fixed Rate % of % of Year Rate Debt Total Rate Debt Total Debt (1) Total Total Total 2020 $ — $ — $ 1,486 $ 1,486 2021 — 300,000 3,159 303,159 2022 200,000 (2) — 39,067 239,067 2023
Slide 14: Leverage Ratios, Coverage Ratios and Public Debt Covenants
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS As of and For the Three Months Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Leverage Ratios: Net debt / total gross assets 41.9% 42.2% 42.5% 42.4% 42.9% Net debt / gross book value of real estate assets 41.6% 41.8% 41.5% 41.8% 42
Slide 15: 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 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Office Portfolio lease related costs $ 3,918 $ 4,964 $ 9,631 $ 4,622 $ 3,152 Office Portfolio building improvements 3,708
Slide 16: Office Portfolio Redevelopment Information
OFFICE PORTFOLIO REDEVELOPMENT INFORMATION AS OF JUNE 30, 2020 (dollars in millions) Total Costs Estimated Incurred as Square Project of June 30, Project Location Type of Property Feet (1) Costs (2) 2020 Estimated Completion (3) Muse at Torrey Pines San Diego, CA Life Science 186,000 $ 113.6 $ 24.1
Slide 17: Property Acquisitions / Dispositions Information Since January 1, 2020
PROPERTY ACQUISITIONS / DISPOSITIONS INFORMATION SINCE JANUARY 1, 2020 (dollars in thousands) Acquisitions: We have not acquired any properties since January 1, 2020. Dispositions: (1) Date Sold Location Type of Property Number of Buildings Gross Sales Price 1/27/2020 Various, LA Medical Office 6 $
Slide 18: Calculation and Reconciliation of NOI and Cash Basis NOI
CALCULATION AND RECONCILIATION OF NOI AND CASH BASIS NOI (amounts in thousands) For the Three Months Ended For the Six Months Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 6/30/2020 6/30/2019 Calculation of NOI and Cash Basis NOI: Revenues: Rental income $ 106,207 $ 110,498 $ 147,209 $ 14
Slide 19: NOI and Cash Basis NOI
NOI AND CASH BASIS NOI (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2020 6/30/2019 % Change 6/30/2020 6/30/2019 % Change NOI: Life Science $ 33,873 $ 38,659 (12.4)% $ 68,285 $ 75,675 (9.8)% Medical Office 30,744 33,201 (7.4)% 62,396 67,229 (7.2)% Total Office Portf
Slide 20: Same Property NOI and Cash Basis NOI
SAME PROPERTY NOI AND CASH BASIS NOI (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2020 6/30/2019 % Change 6/30/2020 6/30/2019 % Change NOI: Life Science $ 33,657 $ 33,641 0.0 % $ 67,573 $ 66,931 1.0 % Medical Office 30,425 31,177 (2.4)% 61,591 62,501 (1.5)% Total O
Slide 21: Reconciliation of NOI, Cash Basis NOI, Same Property NOI by Segment (Three Months)
CALCULATION AND RECONCILIATION OF NOI, CASH BASIS NOI, SAME PROPERTY NOI AND SAME PROPERTY CASH BASIS NOI BY SEGMENT 2019 (dollars in thousands) AND For the Three Months Ended June 30, 2020 For the Three Months Ended June 30, 2019 Calculation of NOI and Cash Basis NOI: Office Portfolio SHOP Non-Segm
Slide 22: Reconciliation of NOI, Cash Basis NOI, Same Property NOI by Segment (Six Months)
CALCULATION AND RECONCILIATION OF NOI, CASH BASIS NOI, SAME PROPERTY NOI AND SAME PROPERTY CASH BASIS NOI BY SEGMENT 2019 (dollars in thousands) AND For the Six Months Ended June 30, 2020 For the Six Months Ended June 30, 2019 Calculation of NOI and Cash Basis NOI: Office Portfolio SHOP Non-Segment
Slide 23: Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
re CALCULATION AND RECONCILIATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre (amounts in thousands) For the Three Months Ended For the Six Months Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 6/30/2020 6/30/2019 Net (loss) income $ (24,742) $ 11,143 $ (50,620) $ (27,946) $ (35,816) $ (13,5
Slide 24: Calculation and Reconciliation of FFO and Normalized FFO
CALCULATION AND RECONCILIATION OF FFO AND NORMALIZED FFO ATTRIBUTABLE TO COMMON SHAREHOLDERS (amounts in thousands, except per share data) For the Three Months Ended For the Six Months Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 6/30/2020 6/30/2019 Net (loss) income attributable to comm
Slide 25: Portfolio Information
PORTFOLIO INFORMATION
Slide 26: Portfolio Summary by Geographic Diversification and Property Type
PORTFOLIO SUMMARY BY GEOGRAPHIC DIVERSIFICATION AND PROPERTY TYPE Geographic Diversification Property Type(1) (2) (based on Gross Book Value of Real Estate Assets as of June 30, 2020) (based on Q2 2020 NOI) IL: 3% VA: 3% Wellness WI: 3% Centers: 3% NC: 4% MD: 4% Independent GA: 5% Living: 22% Medica
Slide 27: Portfolio Summary
PORTFOLIO SUMMARY (dollars in thousands, except investment per unit or square foot) As of June 30, 2020 % of Total % of % of Square Feet Gross Book Gross Book Investment Per Q2 2020 Q2 2020 Number of or Number of Value of Real Value of Real Square Foot Q2 2020 Total Q2 2020 Total Properties Units Es
Slide 28: Occupancy
OCCUPANCY As of and For the Twelve Months Ended (1) 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Life science 94.3% 94.2% 94.5% 97.9% 97.8% Medical office 91.6% 91.0% 90.9% 89.1% 91.7% OCCUPANCY Weighted average occupancy Office Portfolio (2) 92.6% 92.2% 92.3% 92.5% 94.0% SHOP (3) 84.1% 84.4%
Slide 29: Unit Count and Rent Coverage
UNIT COUNT AND RENT COVERAGE SHOP Unit Count as of June 30, 2020 (1): Independent Living and Active Adult units: 10,497: 37% SNF units: Assisted 3,397: 12% Living units: 11,221: 40% Memory Care units: 3,233: 11% UNIT COUNT AND RENT COVERAGE UNIT COUNT Rent Coverage (2): As of and For the Twelve Mont
Slide 30: Office Portfolio - Results of Operations (Three Months)
) OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) 2019 As of and For the Three Months Ended June 30, 2020 As of and For the Three Months Ended June 30, 2019 Life Science Medical Office Total Office Portfolio Life Science Medical Office Total Office Portfolio AND Number of
Slide 31: Office Portfolio - Results of Operations (Six Months)
) OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) 2019 As of and For the Six Months Ended June 30, 2020 As of and For the Six Months Ended June 30, 2019 Life Science Medical Office Total Office Portfolio Life Science Medical Office Total Office Portfolio AND Number of Bui
Slide 32: SHOP Segment - Results of Operations
SHOP SEGMENT - RESULTS OF OPERATIONS (dollars in thousands, except average monthly rate) As of and For the Three Months Ended June 30, As of and For the Six Months Ended June 30, 2020 2019 2020 2019 Number of Properties (1) 241 258 241 258 Number of Units (1) 28,348 29,724 28,348 29,724 Occupancy (1
Slide 33: Office Portfolio Leasing Summary
OFFICE PORTFOLIO LEASING SUMMARY (dollars and sq. ft. in thousands, except per sq. ft. data) As of and For the Three Months Ended 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Buildings 129 130 138 140 145 Total sq. ft. (1) 11,668 11,718 11,878 12,179 12,372 Occupancy (2) 92.0% 92.6% 92.2% 92.3
Slide 34: 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 June 30, 2020 % of Annualized Annualized Rental Tenant Facility Type Rental Income Income Expiration 1 Vertex Pharmaceuticals Inc. (1) Life science $ 96,580 17.2% 2028 2 Advocate Aurora Health Medical offi
Slide 35: Office Portfolio Lease Expiration Schedule
OFFICE PORTFOLIO LEASE EXPIRATION SCHEDULE (dollars in thousands) As of June 30, 2020 Office Portfolio Annualized Rental Income Expiring Cumulative Percentage of Annualized Rental Percent of Total Annualized Annualized Rental Income Year Income (1) Rental Income Expiring Expiring 2020 $ 21,553 5.7%
Slide 36: Non-Segment Lease Expiration Schedule
NON-SEGMENT LEASE EXPIRATION SCHEDULE (dollars in thousands) As of June 30, 2020 Non-Segment Annualized Rental Income Expiring Cumulative Percentage of Number of Number of Units or Square Annualized Rental Percent of Total Annualized Annualized Rental Income Year Properties Feet Income Rental Income
Slide 37: SHOP Segment and Same Property - Transitional Pro Forma EBITDARM
SHOP SEGMENT AND SAME PROPERTY – TRANSITIONAL PRO FORMA EBITDARM EXHIBIT A See pages 38 - 39 for calculation and reconciliation of Pro Forma EBITDARM and Non-GAAP Financial Measures and Certain Definitions on page 40 for a definition of EBITDARM. SHOP SEGMENT - TRANSITIONAL PRO FORMA EBITDARM (dolla
Slide 38: SHOP Segment - Reconciliation of Pro Forma EBITDARM (Three Months)
SHOP SEGMENT - CALCULATION AND RECONCILIATION OF PRO FORMA EBITDARM EXHIBIT A (CONTINUED) (dollars in thousands) Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Restructuring SHOP SHOP Transaction Pro Forma Revenues: Rental income $ — $ 33,400 $ (33,400) (1) $ — Residents fees and
Slide 39: SHOP Segment - Reconciliation of Pro Forma EBITDARM (Six Months)
SHOP SEGMENT - CALCULATION AND RECONCILIATION OF PRO FORMA EBITDARM EXHIBIT A (CONTINUED) (dollars in thousands) Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Restructuring SHOP SHOP Transaction Pro Forma Revenues: Rental income $ — $ 72,713 $ (72,713) (1) $ — Residents fees and serv
Slide 40: Non-GAAP Financial Measures and Certain Definitions
NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS Non-GAAP Financial Measures We present 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
Slide 41: Non-GAAP Financial Measures and Certain Definitions (Continued)
NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS (CONTINUED) 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 asse
Slide 42: Non-GAAP Financial Measures and Certain Definitions (Continued)
NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS (CONTINUED) NOI margin % NOI margin % is defined as NOI as a percentage of rental income. Non-Segment Non-Segment operations consists of triple net leased senior living communities that are leased to third party operators other than Five Star and w
Slide 43: Warning Concerning Forward-Looking Statements
WARNING CONCERNING FORWARD-LOOKING STATEMENTS This presentation of supplemental operating and financial data may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever we use words such as “believe”, “expect”,
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