Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q1 2023 Earnings Presentation
33 slides from Diversified Healthcare Trust's earnings presentation, Apr 26, 2023
Slide 1: First Quarter 2023 Financial Results and Supplemental Information
Exhibit 99.2Tampa, FL Office Properties Income Trust First Quarter 2023 Financial Results and Supplemental Information April 26, 2023
Slide 2: Table of Contents
Q1 2023 2 Table of Contents QUARTERLY RESULTS Office Properties Income Trust Announces First Quarter 2023 Financial Results ................................................................................. 4 First Quarter 2023 Highlights ..............................................................
Slide 3: Quarterly Results
Q1 2023 3RETURN TO TABLE OF CONTENTS Quarterly Results
Slide 4: Office Properties Income Trust Announces First Quarter 2023 Financial Results
Q1 2023 4RETURN TO TABLE OF CONTENTS OFFICE PROPERTIES INCOME TRUST ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS “We ended the quarter with positive operating fundamentals and recognition as a 2023 Energy Star Partner of Year for the sixth consecutive year. Portfolio occupancy increased 170 basis
Slide 5: First Quarter 2023 Highlights
Q1 2023 5RETURN TO TABLE OF CONTENTS First Quarter 2023 Highlights Financial Results • Net loss of $0.4 million, or $0.01 per share. • Normalized FFO of $52.7 million, or $1.09 per share. Portfolio Update • Leased 203,000 sq. ft. with a 6.8 year weighted average lease term. • Increased consolidated
Slide 6: First Quarter 2023 Results
Q1 2023 6RETURN TO TABLE OF CONTENTS First Quarter 2023 Results Sterling, VA (dollars in thousands, except per share data) Three Months Ended March 31, Financial Results 2023 2022 Net loss $ (446) $ (13,407) Net loss per share $ (0.01) $ (0.28) Normalized FFO $ 52,746 $ 62,722 Normalized FFO per sha
Slide 7: Financials
Q1 2023 7RETURN TO TABLE OF CONTENTS Financials
Slide 8: Key Financial Data
Q1 2023 8RETURN TO TABLE OF CONTENTS As of and for the Three Months Ended As of 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 3/31/2023 Selected Balance Sheet Data: Capitalization: Total gross assets $ 4,591,512 $ 4,541,435 $ 4,507,422 $ 4,578,277 $ 4,703,791 Total common shares (at end of peri
Slide 9: Condensed Consolidated Balance Sheets
Q1 2023 9RETURN TO TABLE OF CONTENTS March 31, December 31, 2023 2022 ASSETS Real estate properties: Land $ 817,882 $ 821,238 Buildings and improvements 3,176,756 3,114,836 Total real estate properties, gross 3,994,638 3,936,074 Accumulated depreciation (584,512) (561,458) Total real estate properti
Slide 10: Condensed Consolidated Statements of Income (Loss)
Q1 2023 10RETURN TO TABLE OF CONTENTS Three Months Ended March 31, 2023 2022 Rental income $ 132,422 $ 147,354 Expenses: Real estate taxes 15,333 16,645 Utility expenses 7,260 6,865 Other operating expenses 26,057 27,363 Depreciation and amortization 51,692 60,469 Loss on impairment of real estate —
Slide 11: Debt Summary
Q1 2023 11RETURN TO TABLE OF CONTENTS Fixed vs. Variable Rate Debt Fixed 90.2% Variable 9.8% Coupon Rate (1) Interest Rate (2) Principal Balance Maturity Date Due at Maturity Years to Maturity Unsecured Floating Rate Debt: $750,000 unsecured revolving credit facility (3) (4) 6.000% 6.000% $ 245,000
Slide 12: Debt Maturity Schedule
Q1 2023 12RETURN TO TABLE OF CONTENTS $245,000 $350,000 $650,000 $300,000 $350,000 $562,000$50,000 Unsecured Floating Rate Debt Unsecured Fixed Rate Debt Secured Fixed Rate Debt 2023 2024 2025 2026 2027 2028 and thereafter $0 $200,000 $400,000 $600,000 $800,000 Year Unsecured Floating Rate Debt Unse
Slide 13: Leverage Ratios, Coverage Ratios and Public Debt Covenants
Q1 2023 13RETURN TO TABLE OF CONTENTS Leverage Ratios, Coverage Ratios and Public Debt Covenants 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 54.1% 53.8% 53.4% 54.4% 53.4% Net debt / gross book value of real es
Slide 14: Capital Expenditures Summary and Significant Redevelopment Information
Q1 2023 14RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Lease related costs $ 13,041 $ 24,776 $ 17,297 $ 16,131 $ 8,664 Building improvements 4,582 17,323 8,585 4,702 2,783 Recurring capital expenditures 17,623 42,099 25,882 20,833 11,447 D
Slide 15: Property Acquisitions and Dispositions Information Since January 1, 2023
Q1 2023 15RETURN TO TABLE OF CONTENTS Acquisitions: OPI has not acquired any properties since January 1, 2023. Dispositions: Date Sold Location Number of Properties Sq. Ft. Gross Sales Price Gross Sales Price Per Sq. Ft. 1/6/2023 Richmond, VA 3 89 $ 5,350 $ 60.11 Property Acquisitions and Dispositio
Slide 16: Investments in Unconsolidated Joint Ventures
Q1 2023 16RETURN TO TABLE OF CONTENTS Unconsolidated Joint Ventures: Joint Venture OPI Ownership OPI Investment Number of Properties Location Sq. Ft. Occupancy Weighted Average Remaining Lease Term (1) Prosperity Metro Plaza 51% $ 19,001 2 Fairfax, VA 329 76.6% 2.9 years 1750 H Street, NW 50% 17,557
Slide 17: Portfolio Information
Q1 2023 17RETURN TO TABLE OF CONTENTS Portfolio Information
Slide 18: Summary Same Property Results
Q1 2023 18RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2023 3/31/2022 Properties (end of period) 151 151 Rentable sq. ft. 19,864 19,835 Percent leased 93.5% 94.4% Rental income $ 132,437 $ 132,265 Same Property NOI $ 84,447 $ 87,151 Same Property Cash Basis NOI $ 79,987 $ 83,288 Same
Slide 19: Leasing Summary
Q1 2023 19RETURN 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 Properties (end of period) (1) 157 160 162 172 174 Rentable sq. ft. (1) 20,895 20,969 21,211 22,491 22,941 Percentage leased 90.5% 90.6% 90.7% 89.4% 88.8% Leasing Activity (s
Slide 20: Tenant Diversity and Credit Characteristics
Q1 2023 20RETURN TO TABLE OF CONTENTS Investment Grade 63.0% Non-Investment Grade 7.5% Not Rated 29.5% Percentage of Total Annualized Rental Income Tenant Credit Characteristics ( 4 ) (3) Tenant Industry Tenant Diversity and Credit Characteristics As of March 31, 2023 (1) Total Government: 34.8% (1)
Slide 21: Top Tenants
Q1 2023 21RETURN TO TABLE OF CONTENTS Tenant Credit Rating Sq. Ft. % of Leased Sq. Ft. Annualized Rental Income % of Total Annualized Rental Income 1 U.S. Government Investment Grade 3,816 20.2% $ 106,239 19.6% 2 Alphabet Inc. (Google) Investment Grade 386 2.0% 22,119 4.1% 3 Shook, Hardy & Bacon L.L
Slide 22: Lease Expiration Schedule
Q1 2023 22RETURN TO TABLE OF CONTENTS Year (1) Number of Leases Expiring Leased Square Feet Expiring % of Total Leased Square Feet Expiring Cumulative % of Total Leased Square Feet Expiring Annualized Rental Income Expiring % of Total Annualized Rental Income Expiring Cumulative % of Total Annualize
Slide 23: Appendix
Q1 2023 23RETURN TO TABLE OF CONTENTS Appendix
Slide 24: About the Company and Management
Q1 2023 24RETURN TO TABLE OF CONTENTS The Company: OPI is included in 158 market indices and comprises more than 1% of the following indices as of March 31, 2023: BI North America Office REIT Valuation Peers (BROFFRTV), Bloomberg Real Estate Investment Trust Mid Cap Index (BBREMIDC), Invesco KBW Pre
Slide 25: Governance Information
Q1 2023 25RETURN TO TABLE OF CONTENTS Charlotte, NC Governance Information Board of Trustees Donna D. Fraiche Barbara D. Gilmore John L. Harrington Independent Trustee Independent Trustee Independent Trustee William A. Lamkin Elena B. Poptodorova Jeffrey P. Somers Independent Trustee Lead Independen
Slide 26: Non-GAAP Financial Measures
Q1 2023 26RETURN TO TABLE OF CONTENTS Non-GAAP Financial Measures OPI presents certain “non-GAAP financial measures” within the meaning of the applicable rules of the Securities and Exchange Commission (SEC), including NOI, Cash Basis NOI, Same Property NOI, Same Property Cash Basis NOI, EBITDA, EBI
Slide 27: Definitions
Q1 2023 27RETURN TO TABLE OF CONTENTS Adjusted total assets and total unencumbered assets include the original cost of real estate assets calculated in accordance with GAAP before impairment writedowns, if any, and exclude depreciation and amortization, accounts receivable and intangible assets. Ann
Slide 28: Calculation of NOI and Cash Basis NOI
Q1 2023 28RETURN 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: Rental income $ 132,422 $ 127,922 $ 137,683 $ 141,316 $ 147,354 Property operating expenses (48,650) (43,305) (52,137) (48,900) (50,873) NOI 83,7
Slide 29: Reconciliation of NOI to Same Property NOI
Q1 2023 29RETURN TO TABLE OF CONTENTS For the Three Months Ended 3/31/2023 3/31/2022 Reconciliation of NOI to Same Property NOI: Rental income $ 132,422 $ 147,354 Property operating expenses (48,650) (50,873) NOI 83,772 96,481 Less: NOI of properties not included in same property results 675 (9,330)
Slide 30: EBITDA and Adjusted EBITDAre Reconciliation
Q1 2023 30RETURN 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 income (loss) $ (446) $ 6,390 $ 16,964 $ (16,056) $ (13,407) Add (less): Interest expense 25,231 24,557 24,969 26,515 27,439 Income tax expense (benefit) 30 (161) 90 (190) 531 Depr
Slide 31: FFO and Normalized FFO Reconciliation
Q1 2023 31RETURN 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 income (loss) $ (446) $ 6,390 $ 16,964 $ (16,056) $ (13,407) Add (less): Depreciation and amortization: Consolidated properties 51,692 51,571 52,988 57,536 60,469 Unconsolidated jo
Slide 32: Warning Concerning Forward-Looking Statements
Q1 2023 32RETURN TO TABLE OF CONTENTS Warning Concerning Forward-Looking Statements 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
Slide 33: Important Additional Information About the Merger
Q1 2023 33RETURN TO TABLE OF CONTENTS Important Additional Information About the Merger In connection with the Merger, OPI intends to file a registration statement on Form S-4 with the SEC, which will include a preliminary prospectus and related materials to register the common shares of beneficial
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