Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q3 2020 Earnings Presentation
44 slides from Diversified Healthcare Trust's earnings presentation, Nov 5, 2020
Slide 1: Third Quarter 2020 Supplemental Operating and Financial Data
Exhibit 99.2 @ DIVERSIFIED HEALTHCARE DHC SMB TRUST Nasdaq Listed 7809 W. 38" Avenue, Wheat Ridge, CO Tenant: Clear Creek Surgery Center, LLC Square Feet: 14,695 —~ y — ‘g. = pare re isial © THIRD 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
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 Securities, Inc. BofA Securities Colliers Securities LLC Bryan Maher Joshua Dennerlein Kyle Bauser (646) 885-5423 (646) 855-1681 (612) 376-4191 bmaher@brileyfin.com joshua.dennerlein@bofa.com kyle.bauser@colliers.com JMP Securities Morgan Stanley R
Slide 7: Financials
FINANCIALS ™ Five Star Premier Reside of Boca Raton’ 22601 Camino ae an,
Slide 8: Key Financial Data
KEY FINANCIAL DATA (dollars in thousands, except per share data) As of and For the Three Months Ended 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 Selected Balance Sheet Data: Total gross assets $ 8,186,982 $ 8,266,767 $ 8,316,051 $ 8,224,627 $ 8,572,131 Total assets $ 6,535,118 $ 6,600,523 $
Slide 9: Condensed Consolidated Balance Sheets
CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) As of As of September 30, 2020 December 31, 2019 Assets Real estate properties: Land $ 792,343 $ 793,123 Buildings and improvements 6,579,388 6,668,463 Total real estate properties, gross 7,371,731 7,461,586 Accumulated
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 September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Revenues: Rental income $ 104,238 $ 148,011 $ 320,943 $ 459,349 Residents fees and services (1) 290,10
Slide 11: Condensed Consolidated Statements of Income (Loss) (Additional Data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (ADDITIONAL DATA) DATA) (dollars in thousands) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Additional Data: General and administrative expenses / total assets (at end of period) 0.1 % 0.1 % 0.
Slide 12: Debt Summary
DEBT SUMMARY (dollars in thousands) As of September 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 $ — 1.3 Unsecured term loan
Slide 13: Debt Maturity Schedule
DEBT MATURITY SCHEDULE (dollars in thousands) As of September 30, 2020 $1,200,000 (1) $2,001 $1,000,000 $800,000 $8,299 DEBT MATURITY SCHEDULE $600,000 (1) $315 $1,000,000 $ (Thousands) $400,000 (1) $3,159 (1) $1,834 $620,904 $600,000 $500,000 $200,000 $39,067 $300,000 $250,000 (1) $200,000 (1) $752
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 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 Leverage Ratios: Net debt / total gross assets 42.3 % 41.9 % 42.2 % 42.5 % 42.4 % Net debt / gross book value of real estate assets 42.0 % 41.6 % 41.8 %
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 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 Office Portfolio lease related costs $ 4,411 $ 3,918 $ 4,964 $ 9,631 $ 4,622 Office Portfolio building improvements 4,990
Slide 16: Office Portfolio Redevelopment Information
OFFICE PORTFOLIO REDEVELOPMENT INFORMATION AS OF SEPTEMBER 30, 2020 (dollars in millions) Total Costs Estimated Incurred as Square Project of September Project Location Type of Property Feet (1) Costs (2) 30, 2020 Estimated Completion (3) 1145 19th Street NW Washington, D.C. Medical Office 139,748 $
Slide 17: Property Acquisitions / Dispositions Information
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 Nine Months Ended 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 9/30/2020 9/30/2019 Calculation of NOI and Cash Basis NOI: Revenues: Rental income $ 104,238 $ 106,207 $ 110,498 $ 1
Slide 19: NOI and Cash Basis NOI
NOI AND CASH BASIS NOI (dollars in thousands) For the Three Months Ended For the Nine Months Ended 9/30/2020 9/30/2019 % Change 9/30/2020 9/30/2019 % Change NOI: Life Science $ 32,577 $ 35,565 (8.4) % $ 100,862 $ 111,240 (9.3) % Medical Office 28,210 30,261 (6.8) % 90,606 97,490 (7.1) % Total Office
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 Nine Months Ended 9/30/2020 9/30/2019 % Change 9/30/2020 9/30/2019 % Change NOI: Life Science $ 30,463 $ 31,209 (2.4) % $ 93,129 $ 93,664 (0.6) % Medical Office 27,856 29,415 (5.3) % 88,816 91,471 (2.9) %
Slide 21: Calculation and 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 September 30, 2020 For the Three Months Ended September 30, 2019 Calculation of NOI and Cash Basis NOI: Office Portfolio SHO
Slide 22: Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI by Segment (Nine 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 Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019 Calculation of NOI and Cash Basis NOI: Office Portfolio SHOP
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 Nine Months Ended 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 9/30/2020 9/30/2019 Net (loss) income $ (105,788) $ (24,742) $ 11,143 $ (50,620) $ (27,946) $ (11
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 Nine Months Ended 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 9/30/2020 9/30/2019 Net (loss) income attributable to com
Slide 25: Portfolio Information
PORTFOLIO INFORMATION
Slide 26: Portfolio Summary by Geographic Diversification and Property Type
PORTFOLIO SUMMARY BY GEOGRAPHIC DIVERSIFICATION AND PROPERTY TYPE (1) (2) Geographic Diversification Property Type (based on Gross Book Value of Real Estate Assets as of September 30, 2020) (based on Q3 2020 NOI) NC: 4% IL:3% WI: 4% VA: 3% MD: 4% GA: 5% Life Science: 41% Medical Office: 36% TX: 8% 2
Slide 27: Portfolio Summary
PORTFOLIO SUMMARY (dollars in thousands, except investment per unit or square foot) As of September 30, 2020 % of Total % of % of Square Feet Gross Book Gross Book Investment Per Q3 2020 Q3 2020 Number of or Number of Value of Real Value of Real Square Foot Q3 2020 Total Q3 2020 Total Properties Uni
Slide 28: Occupancy
OCCUPANCY As of and For the Twelve Months Ended (1) 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Life science 93.7 % 94.3 % 94.2 % 94.5 % 97.9 % OCCUPANCY Medical office 91.0 % 91.6 % 91.0 % 90.9 % 89.1 % Weighted average occupancy Office Portfolio (2) 92.0 % 92.6 % 92.2 % 92.3 % 92.5 % SHOP (
Slide 29: Same Property Occupancy
SAME PROPERTY OCCUPANCY (1) As of and For the Twelve Months Ended (2) 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Life science 97.6 % 97.6 % 97.6 % 97.6 % 97.5 % Medical office 91.2 % 91.8 % 91.7 % 91.5 % 92.1 % Weighted average occupancy Office Portfolio (3) 93.6 % 93.9 % 93.8 % 93.7 % 94.1
Slide 30: Unit Count and Rent Coverage
UNIT COUNT AND RENT COVERAGE SHOP Unit Count as of September 30, 2020 (1): Independent Assisted Living and Living units: Active Adult units: 11,141: 39% 10,497: 37% Memory Care units: SNF units: 3,197: 12% 3,397: 12% UNIT COUNT AND RENT COVERAGE Rent Coverage (2): As of and For the Twelve Months End
Slide 31: 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 September 30, 2020 As of and For the Three Months Ended September 30, 2019 Life Science Medical Office Total Office Portfolio Life Science Medical Office Total Office Portfolio AND
Slide 32: Office Portfolio - Results of Operations (Nine Months)
) OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) 2019 As of and For the Nine Months Ended September 30, 2020 As of and For the Nine Months Ended September 30, 2019 Life Science Medical Office Total Office Portfolio Life Science Medical Office Total Office Portfolio AND N
Slide 33: SHOP Segment - Results of Operations
SHOP SEGMENT - RESULTS OF OPERATIONS (1) (dollars in thousands, except average monthly rate) As of and For the Three Months Ended September 30, As of and For the Nine Months Ended September 30, 2020 2019 2020 2019 Number of Properties (2) 239 243 239 243 Number of Units (2) 28,232 28,844 28,232 28,8
Slide 34: 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 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 Buildings 126 129 130 138 140 Total sq. ft. (1) 11,573 11,668 11,718 11,878 12,179 Occupancy (2) 91.3 % 92.0 % 92.6 % 9
Slide 35: 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 September 30, 2020 % of Annualized Annualized Rental Tenant Facility Type Rental Income Income Expiration 1 Vertex Pharmaceuticals Inc. (1) Life science $ 97,340 21.4 % 2028 2 Advocate Aurora Health Medica
Slide 36: Office Portfolio Lease Expiration Schedule
OFFICE PORTFOLIO LEASE EXPIRATION SCHEDULE (dollars in thousands) As of September 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 $ 14,246
Slide 37: Non-Segment Lease Expiration Schedule
NON-SEGMENT LEASE EXPIRATION SCHEDULE (dollars in thousands) As of September 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 I
Slide 38: SHOP Segment and Same Property - Transitional Pro Forma EBITDARM
SHOP SEGMENT AND SAME PROPERTY – TRANSITIONAL PRO FORMA EBITDARM EXHIBIT A See pages 39 - 40 for calculation and reconciliation of Pro Forma EBITDARM and Non-GAAP Financial Measures and Certain Definitions on page 41 for a definition of EBITDARM. SHOP SEGMENT - TRANSITIONAL PRO FORMA EBITDARM (dolla
Slide 39: SHOP Segment Reconciliation of Pro Forma EBITDARM (Three Months)
EXHIBIT A SHOP SEGMENT AND SAME PROPERTY - CALCULATION AND RECONCILIATION OF PRO FORMA EBITDARM (CONTINUED) (dollars in thousands) Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Restructuring SHOP SHOP Transaction Pro Forma Revenues: Rental income $ — $ 32,738 $ (32,738)
Slide 40: SHOP Segment Reconciliation of Pro Forma EBITDARM (Nine Months)
EXHIBIT A SHOP SEGMENT AND SAME PROPERTY- CALCULATION AND RECONCILIATION OF PRO FORMA EBITDARM (CONTINUED) (dollars in thousands) Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Restructuring SHOP SHOP Transaction Pro Forma Revenues: Rental income $ — $ 105,451 $ (105,451)
Slide 41: 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 42: 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 43: 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 44: 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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