Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Q4 2020 Earnings Presentation
42 slides from Diversified Healthcare Trust's earnings presentation, Feb 24, 2021
Slide 1: Fourth Quarter 2020 Supplemental Operating and Financial Data
FOURTH QUARTER 2020 Supplemental Operating and Financial Data ALL AMOUNTS IN THIS REPORT ARE UNAUDITED. Exhibit 99.2 Muse at Torrey Pines San Diego, CA
Slide 2: Table of Contents
Supplemental Q4 2020 2 CORPORATE INFORMATION Company Profile................................................................................................................................................................................................................................................
Slide 3: Company Profile
Supplemental Q4 2020 3 The Company: 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 wellness centers located throughout the U.S
Slide 4: Investor Information
Supplemental Q4 2020 4 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 Executive Of
Slide 5: Research Coverage
Supplemental Q4 2020 5 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 Sta
Slide 6: Key Financial Data
Supplemental Q4 2020 6 (1) Beginning in the second quarter of 2020, we reduced our quarterly cash distribution rate to $0.01 per common share ($0.04 per common share annually) to conserve capital in response to uncertain economic conditions as a result of the COVID-19 pandemic. Key Financial Data RE
Slide 7: Condensed Consolidated Balance Sheets
Supplemental Q4 2020 7 As of As of December 31, 2020 December 31, 2019 Assets Real estate properties: Land $ 789,125 $ 793,123 Buildings and improvements 6,621,605 6,668,463 Total real estate properties, gross 7,410,730 7,461,586 Accumulated depreciation (1,694,901) (1,570,801) Total real estate pro
Slide 8: Consolidated Statements of Income (Loss)
Supplemental Q4 2020 8 For the Three Months Ended December 31, For the Year Ended December 31, 2020 2019 2020 2019 Revenues: Rental income $ 106,272 $ 147,209 $ 427,215 $ 606,558 Residents fees and services 278,637 108,830 1,204,811 433,597 Total revenues 384,909 256,039 1,632,026 1,040,155 Expenses
Slide 9: Consolidated Statements of Income (Loss) (Additional Data)
Supplemental Q4 2020 9 For the Three Months Ended December 31, For the Year Ended December 31, 2020 2019 2020 2019 Additional Data: General and administrative expenses / total assets (at end of period) 0.1 % 0.1 % 0.5 % 0.6 % Straight line rent included in rental income $ 3,040 $ 958 $ 6,069 $ 4,508
Slide 10: Debt Summary
Supplemental Q4 2020 10 Coupon Interest Principal Maturity Due at Years to Rate Rate (1) Balance (2) Date Maturity Maturity Floating Rate Debt: Revolving credit facility (3) (4) 2.550 % 2.550 % $ — 1/15/2022 $ — 1.0 Term loan (4) (5) 2.750 % 2.750 % 200,000 9/28/2022 200,000 1.7 Weighted average rat
Slide 11: Debt Maturity Schedule
Supplemental Q4 2020 11 $200,000 $300,000 $250,000 $1,000,000 $500,000 $600,000 $3,159 $39,067 $16,413 $1,834 $2,001 $620,904 $302 $315 $330 $7,969 Unsecured Floating Rate Debt Unsecured Fixed Rate Debt Secured Fixed Rate Debt 2021 2022 2023 2024 2025 2026 2027 2028 2029 Thereafter $0 $200,000 $400,
Slide 12: Leverage Ratios, Coverage Ratios and Public Debt Covenants
Supplemental Q4 2020 12 Leverage Ratios, Coverage Ratios and Public Debt Covenants RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Leverage Ratios: Net debt / total gross assets 42.4 % 42.3 % 41.9 % 42.2 % 42.5 % Net debt / gross b
Slide 13: Capital Expenditures Summary
Supplemental Q4 2020 13 (1) Data for the 2020 periods include all senior living communities in our SHOP segment. The three months ended December 31, 2019 exclude SHOP properties leased during those periods. Pursuant to the restructuring of our business arrangements with Five Star, or the Restructuri
Slide 14: Development and Redevelopment Projects
Supplemental Q4 2020 14 Project Location Type of Property Square Feet (1) Estimated Project Costs (2) Total Costs Incurred as of December 31, 2020 Estimated Completion (3) Muse at Torrey Pines San Diego, CA Life Science 185,978 $ 113.6 $ 54.9 Substantially Complete (4) 4 Maguire Road Lexington, MA L
Slide 15: Property Acquisitions / Dispositions Information
Supplemental Q4 2020 15 Property Acquisitions / Dispositions Information Since January 1, 2020 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 16: Calculation and Reconciliation of NOI and Cash Basis NOI
Supplemental Q4 2020 16 Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Year Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 12/31/2020 12/31/2019 Calculation of NOI and Cash Basis NOI: Revenues:
Slide 17: NOI and Cash Basis NOI
Supplemental Q4 2020 17 For the Three Months Ended For the Year Ended 12/31/2020 12/31/2019 % Change 12/31/2020 12/31/2019 % Change NOI: Life Science $ 32,862 $ 33,285 (1.3) % $ 133,724 $ 144,525 (7.5) % Medical Office 29,279 30,653 (4.5) % 119,885 128,143 (6.4) % Total Office Portfolio 62,141 63,93
Slide 18: Same Property NOI and Cash Basis NOI
Supplemental Q4 2020 18 Same Property NOI and Cash Basis NOI (dollars in thousands) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Year Ended 12/31/2020 12/31/2019 % Change 12/31/2020 12/31/2019 % Change NOI: Life Science $ 30,803 $ 30,292 1.7 % $ 123,387 $ 123,457 (0.1) % Medical Of
Slide 19: NOI Reconciliation by Segment: Office Portfolio
Supplemental Q4 2020 19 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: 12/31/2020 9/30/2020 6/30
Slide 20: NOI Reconciliation by Segment: SHOP
Supplemental Q4 2020 20 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 (1) For the Three Months Ended Calculation of NOI and Cash Basis NOI: 12/31/2020 9/30/2020
Slide 21: NOI Reconciliation by Segment: Non-Segment
Supplemental Q4 2020 21 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: 12/31/2020 9/30/20
Slide 22: NOI Reconciliation by Segment: Consolidated
Supplemental Q4 2020 22 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: 12/31/2020 9/30/2
Slide 23: Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
Supplemental Q4 2020 23 Calculation and Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended For the Year Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 12/31/2020 12/31/2019 Net (loss) income $ (14,920) $ (105,788) $ (24,742) $ 11,143
Slide 24: Calculation and Reconciliation of FFO and Normalized FFO
Supplemental Q4 2020 24 Calculation and Reconciliation of FFO and Normalized FFO Attributable to Common Shareholders (amounts in thousands, except per share data) RETURN TO TABLE OF CONTENTS For the Three Months Ended For the Year Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 12/31/2020
Slide 25: Portfolio Summary by Geographic Diversification and Property Type
Supplemental Q4 2020 25 (based on Gross Book Value of Real Estate Assets as of December 31, 2020) (based on Q4 2020 NOI) (1) Senior living communities are categorized by the type of living units which constitute a majority of the living units at the community. (2) Memory care communities are classif
Slide 26: Portfolio Summary
Supplemental Q4 2020 26 Portfolio Summary RETURN TO TABLE OF CONTENTS (dollars in thousands, except investment per unit or square foot) As of December 31, 2020 Number of Properties Square Feet or Number of Units Gross Book Value of Real Estate Assets (1) % of Total Gross Book Value of Real Estate As
Slide 27: Occupancy
Supplemental Q4 2020 27 Occupancy RETURN TO TABLE OF CONTENTS As of and For the Twelve Months Ended (1) 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 Life science 91.3 % 93.7 % 94.3 % 94.2 % 94.5 % Medical office 91.2 % 91.0 % 91.6 % 91.0 % 90.9 % Weighted average occupancy Office Portfolio (2)
Slide 28: Unit Count and Rent Coverage
Supplemental Q4 2020 28 Unit Count and Rent Coverage Rent Coverage (2): As of and For the Twelve Months Ended 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 Other triple net leased senior living communities 1.61 x 1.63 x 1.66 x 1.69 x 1.71 x Wellness centers (3) 1.32 x 1.59 x 2.15 x 2.29 x 2.29
Slide 29: Office Portfolio and Same Property - Results of Operations
Supplemental Q4 2020 29 (1) Prior periods exclude space remeasurements made subsequent to those periods. (2) Occupancy includes (i) out of service assets undergoing redevelopment, (ii) space which is leased but is not occupied or is being offered for sublease by tenants and (iii) space being fitted
Slide 30: Office Portfolio and Same Property - Results of Operations (continued)
Supplemental Q4 2020 30 (1) Prior periods exclude space remeasurements made subsequent to those periods. (2) Occupancy includes (i) out of service assets undergoing redevelopment, (ii) space which is leased but is not occupied or is being offered for sublease by tenants and (iii) space being fitted
Slide 31: Office Portfolio and Same Property - Results of Operations (continued)
Supplemental Q4 2020 31 (1) Prior periods exclude space remeasurements made subsequent to those periods. (2) Occupancy includes (i) out of service assets undergoing redevelopment, (ii) space which is leased but is not occupied or is being offered for sublease by tenants and (iii) space being fitted
Slide 32: SHOP Segment and Same Property - Results of Operations
Supplemental Q4 2020 32 SHOP Segment and Same Property - Results of Operations RETURN TO TABLE OF CONTENTS SHOP SEGMENT - RESULTS OF OPERATIONS (dollars in thousands, except average monthly rate) As of and For the Three Months Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Number of Prope
Slide 33: SHOP Segment and Same Property - Transitional Pro Forma EBITDARM
Supplemental Q4 2020 33 SHOP Segment and Same Property - Transitional Pro Forma EBITDARM RETURN TO TABLE OF CONTENTS (dollars in thousands, except average monthly rate) SHOP SEGMENT - TRANSITIONAL PRO FORMA EBITDARM As of and For the Three Months Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/
Slide 34: SHOP Pro Forma EBITDARM Reconciliation (continued)
Supplemental Q4 2020 34 SHOP Segment and Same Property - Calculation and Reconciliation of Pro Forma EBITDARM (continued) (dollars in thousands) (1) Pursuant to the Restructuring Transaction, effective January 1, 2020, our previously existing master leases and management and pooling agreements with
Slide 35: Office Portfolio Leasing Summary
Supplemental Q4 2020 35 Office Portfolio Leasing Summary (1) Square feet measurements are subject to modest changes when space is periodically remeasured or reconfigured for new tenants. (2) Occupancy includes (i) out of service assets undergoing redevelopment, (ii) space which is leased but is not
Slide 36: Tenants Representing 1% or More of Total Annualized Rental Income
Supplemental Q4 2020 36 As of December 31, 2020 (1) The life science property leased by this tenant is owned in a joint venture arrangement in which we own a 55% equity interest. Rental income presented includes 100% of rental income consistent with GAAP. (2) Includes NOI for the three months ended
Slide 37: Office Portfolio Lease Expiration Schedule
Supplemental Q4 2020 37 Office Portfolio Lease Expiration Schedule (1) Includes data from our life science property owned in a joint venture arrangement in which we own a 55% equity interest. RETURN TO TABLE OF CONTENTS (dollars in thousands) As of December 31, 2020 Office Portfolio Annualized Renta
Slide 38: Non-Segment Lease Expiration Schedule
Supplemental Q4 2020 38 Non-Segment Annualized Rental Income Expiring Year Number of Properties Number of Units or Square Feet Annualized Rental Income Percent of Total Annualized Rental Income Expiring Cumulative Percentage of Annualized Rental Income Expiring 2021 — — $ — — % — % 2022 — — — — % —
Slide 39: Non-GAAP Financial Measures
Supplemental Q4 2020 39 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 interest, income tax, depre
Slide 40: Definitions of Terms
Supplemental Q4 2020 40 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. Annualized dividend yield Annualized
Slide 41: Definitions of Terms (continued)
Supplemental Q4 2020 41 Maintenance covenant Our maintenance covenant is a financial covenant which we are required to comply with on a quarterly basis pursuant to the indentures governing our senior unsecured notes. Net debt Net debt is total debt less cash. NOI margin % NOI margin % is defined as
Slide 42: Forward-Looking Statements Notice
Supplemental Q4 2020 42 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”, “anticipate”, “intend
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