Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q1 2020 Earnings Presentation
39 slides from Diversified Healthcare Trust's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020 Supplemental Operating and Financial Data
DIVERSIFIED Exhibit 99.2 aes HEALTHCARE DHC { TRUST Nasdaq Listed ae , ‘Square Feet: 165,586 és! FIRST 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 John L. Harrington Lisa Harris Jones Jeffrey P. Somers Independent Trustee Lead Independent Trustee Independent Trustee Jennifer B. Clark Adam D. Portnoy Managing Trustee Chair of the Board & Managing Trustee INVESTOR INFORMATION INVESTOR Executive Officers Jen
Slide 6: Research Coverage
RESEARCH COVERAGE Equity Research Coverage B. Riley FBR BofA Securities Morgan Stanley Bryan Maher Joshua Dennerlein Vikram Malhotra (646) 885-5423 (646) 855-1681 (212) 761-7064 bmaher@brileyfbr.com joshua.dennerlein@bofa.com vikram.malhotra@morganstanley.com Raymond James RBC Capital Markets Wells
Slide 7: Financials
FINANCIALS
Slide 8: Key Financial Data
KEY FINANCIAL DATA (dollars in thousands, except per share data) As of and For the Three Months Ended 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Selected Balance Sheet Data: Total gross assets $ 8,316,051 $ 8,224,627 $ 8,572,131 $ 8,713,990 $ 8,706,590 Total assets $ 6,703,723 $ 6,653,826 $
Slide 9: Condensed Consolidated Balance Sheets
CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share data) As of As of March 31, 2020 December 31, 2019 Assets Real estate properties: Land $ 786,242 $ 793,123 Buildings and improvements 6,648,430 6,668,463 Total real estate properties, gross 7,434,672 7,461,586 Accumulated depr
Slide 10: Condensed Consolidated Statements of Income
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands, except per share data) For the Three Months Ended March 31, 2020 2019 Revenues: Rental income $ 110,498 $ 158,241 Residents fees and services 331,969 108,045 Total revenues 442,467 266,286 Expenses: Property operating expenses 316,58
Slide 11: Condensed Consolidated Statements of Income (Additional Data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (ADDITIONAL DATA) (dollars in thousands) For the Three Months Ended March 31, 2020 2019 Additional Data: General and administrative expenses / total assets (at end of period) 0.1% 0.1% Straight line rent included in rental income $ 1,153 $ 1,934 Lease valu
Slide 12: Debt Summary
DEBT SUMMARY (dollars in thousands) As of March 31, 2020 Coupon Interest Principal Maturity Due at Years to Rate Rate (1) Balance (2) Date Maturity Maturity Unsecured Floating Rate Debt: Unsecured revolving credit facility (LIBOR + 120 b.p.) (3) (4) 1.844% 1.844% $ 585,000 1/15/2022 $ 585,000 1.8 Un
Slide 13: Debt Maturity Schedule
DEBT MATURITY SCHEDULE (dollars in thousands) As of March 31, 2020 Unsecured Unsecured Secured Floating % of Fixed % of Fixed Rate % of % of Year Rate Debt Total Rate Debt Total Debt (1) (2) Total Total Total 2020 $ 250,000 (3) $ 200,000 (4) $ 2,706 $ 452,706 2021 — 300,000 3,867 303,867 2022 785,00
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 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Leverage Ratios: Net debt / total gross assets 42.2% 42.5% 42.4% 42.9% 42.8% Net debt / gross book value of real estate assets 41.8% 41.5% 41.8% 42.9% 43
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 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Office Portfolio lease related costs $ 4,964 $ 9,631 $ 4,622 $ 3,152 $ 9,132 Office Portfolio building improvements 2,665
Slide 16: 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 Medical Office 6 $ 5,92
Slide 17: 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 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Calculation of NOI and Cash Basis NOI: Revenues: Rental income $ 110,498 $ 147,209 $ 148,011 $ 153,097 $ 158,241 Residents fees and services 3
Slide 18: NOI and Cash Basis NOI
NOI AND CASH BASIS NOI (dollars in thousands) For the Three Months Ended 3/31/2020 3/31/2019 % Change NOI: Life Science $ 34,412 $ 37,016 (7.0)% Medical Office 31,652 34,028 (7.0)% Total Office Portfolio 66,064 71,044 (7.0)% NOI AND CASH BASIS NOI NOI SHOP 48,090 62,313 (22.8)% Non-Segment 11,728 15
Slide 19: Same Property NOI and Cash Basis NOI
SAME PROPERTY NOI AND CASH BASIS NOI (dollars in thousands) For the Three Months Ended 3/31/2020 3/31/2019 % Change NOI: Life Science $ 34,590 $ 33,935 1.9 % Medical Office 29,785 29,917 (0.4)% Total Office Portfolio 64,375 63,852 0.8 % SHOP 46,030 58,675 (21.6)% Non-Segment 10,768 10,807 (0.4)% Tot
Slide 20: Calculation and Reconciliation of NOI, Cash Basis NOI, Same Property NOI by Segment
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 March 31, 2020 For the Three Months Ended March 31, 2019 Calculation of NOI and Cash Basis NOI: Office Portfolio SHOP Non-Se
Slide 21: 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 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Net income (loss) $ 11,143 $ (50,620) $ (27,946) $ (35,816) $ 31,504 AND ADJUSTED EBITDA AND Interest expense 41,650 43,272
Slide 22: 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 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Net income (loss) attributable to common shareholders $ 9,735 $ (51,697) $ (29,390)
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Slide 24: 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 March 31, 2020) (based on Q1 2020 NOI) IL: 3% VA: 3% Wellness NC: 3% Centers: 4% WI: 4% MD: 4% GA: 5% Independent Living: 24% Medic
Slide 25: Portfolio Summary
PORTFOLIO SUMMARY (dollars in thousands, except investment per unit or square foot) As of March 31, 2020 % of Total % of % of Square Feet Gross Book Gross Book Investment Per Q1 2020 Q1 2020 Number of or Number of Value of Real Value of Real Square Foot Q1 2020 Total Q1 2020 Total Properties Units E
Slide 26: Occupancy
OCCUPANCY As of and For the Twelve Months Ended (1) 12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018 Life science 94.2% 94.5% 97.9% 97.8% 99.0% Medical office 91.0% 90.9% 89.1% 91.7% 91.7% OCCUPANCY Weighted average occupancy Office Portfolio (2) 92.2% 92.3% 92.5% 94.0% 94.5% SHOP (3) 84.4% 84.6%
Slide 27: Unit Count and Rent Coverage
UNIT COUNT AND RENT COVERAGE SHOP Unit Count as of March 31, 2020 (1): Independent Living and Active Adult units: 10,798: 37.3% Assisted SNF units: Living units: 3,451: 11.9% 11,430: 39.5% Memory Care units: 3,281: 11.3% UNIT COUNT AND RENT COVERAGE UNIT COUNT Rent Coverage (2): As of and For the Tw
Slide 28: Office Portfolio - Results of Operations
) OFFICE PORTFOLIO - RESULTS OF OPERATIONS (dollars and sq. ft. in thousands) 2019 As of and For the Three Months Ended March 31, 2020 As of and For the Three Months Ended March 31, 2019 Life Science Medical Office Total Office Portfolio Life Science Medical Office Total Office Portfolio AND Number
Slide 29: 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 March 31, 2020 2019 Number of Properties (1) 244 260 Number of Units (1) 28,960 29,684 Occupancy (1) 82.7 % 84.2% Average Monthly Rate (1) $ 4,571 $ 4,725 Average Monthly Rat
Slide 30: 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 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Buildings 130 138 140 145 153 Total sq. ft. (1) 11,718 11,878 12,179 12,372 12,547 Occupancy (2) 92.6% 92.2% 92.3% 92.5
Slide 31: 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 March 31, 2020 % of Annualized Annualized Rental Tenant Facility Type Rental Income Income Expiration 1 Vertex Pharmaceuticals Inc. (1) Life science $ 96,580 15.5% 2028 2 Advocate Aurora Health Medical off
Slide 32: Office Portfolio Lease Expiration Schedule
OFFICE PORTFOLIO LEASE EXPIRATION SCHEDULE (dollars in thousands) As of March 31, 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 $ 26,661 7.0%
Slide 33: Non-Segment Lease Expiration Schedule
NON-SEGMENT LEASE EXPIRATION SCHEDULE (dollars in thousands) As of March 31, 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 Incom
Slide 34: SHOP Segment and Same Property - Transitional Pro Forma EBITDARM
SHOP SEGMENT AND SAME PROPERTY – TRANSITIONAL PRO FORMA EBITDARM EXHIBIT A See page 35 for calculation and reconciliation of Pro Forma EBITDARM and Non-GAAP Financial Measures and Certain Definitions on page 36 for a definition of EBITDARM. SHOP SEGMENT - TRANSITIONAL PRO FORMA EBITDARM (dollars in
Slide 35: SHOP Segment - Calculation and Reconciliation of Pro Forma EBITDARM
SHOP SEGMENT - CALCULATION AND RECONCILIATION OF PRO FORMA EBITDARM EXHIBIT A (CONTINUED) (dollars in thousands) Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Restructuring SHOP SHOP Transaction Pro Forma Revenues: Rental income $ — $ 39,313 $ (39,313) (1) $ — Residents fees an
Slide 36: 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 37: 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 38: 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 39: 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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