SHOP Segment Occupancy Improves 380 Basis
Points Year Over Year to 76.3%
SHOP Segment Revenues Increase 14.2% Year
Over Year
Net Loss Attributable to Common Shareholders
of $0.27 Per Share
Normalized FFO Attributable to Common
Shareholders of $0.03 Per Share
Diversified Healthcare Trust (Nasdaq: DHC) today announced its
financial results for the quarter ended December 31, 2022.
Jennifer Francis, President and Chief Executive Officer of DHC,
made the following statement:
"Fourth quarter results reflected strong year over year
improvement in our SHOP segment. Occupancy increased 380 basis
points and average monthly rates increased nearly 9% from the prior
year, resulting in a 14.2% increase in revenues. These factors
contributed to fourth quarter normalized FFO of $0.03 per
share.
In February, we announced an amendment to our credit facility.
The amendment provides covenant relief as we invest capital in our
properties and work with our operators to continue improving our
SHOP segment performance."
Quarterly Results:
- Reported net loss attributable to common shareholders of $65.3
million, or $0.27 per share.
- Reported normalized funds from operations, or Normalized FFO,
attributable to common shareholders of $8.1 million, or $0.03 per
share.
As of and For the Three Months
Ended
December 31, 2022
September 30, 2022
December 31, 2021
Occupancy
Office Portfolio (period end)
84.7%
85.9%
91.3%
SHOP (average day for period)
76.3%
74.7%
72.5%
Same Property Occupancy
Office Portfolio (period end)
90.0%
90.2%
92.3%
SHOP (average day for period)
76.7%
74.9%
72.9%
Three Months Ended
December 31, 2022
September 30, 2022
Change
December 31, 2021
Change
Same Property Cash Basis NOI (dollars
in thousands)
Office Portfolio
$26,974
$27,971
(3.6)%
$27,217
(0.9)%
SHOP
$9,947
$1,698
485.8%
$(3,265)
404.7%
Total Consolidated Same Property Cash
Basis NOI
$46,717
$37,247
25.4%
$34,651
34.8%
Reconciliations of net income (loss) attributable to common
shareholders determined in accordance with U.S. generally accepted
accounting principles, or GAAP, to funds from operations, or FFO,
attributable to common shareholders and Normalized FFO attributable
to common shareholders for the quarters ended December 31, 2022 and
2021 appear later in this press release. Reconciliations of net
income (loss) attributable to common shareholders determined in
accordance with GAAP to net operating income, or NOI, and Cash
Basis NOI, and a reconciliation of NOI to same property NOI and a
calculation of same property Cash Basis NOI, for the quarters ended
December 31, 2022, September 30, 2022 and December 31, 2021, as
applicable, also appear later in this press release.
Office Portfolio
Segment:
- Same property Cash Basis NOI decreased compared to the fourth
quarter of 2021 primarily resulting from increases in repairs and
maintenance and utility expenses due to higher energy rates caused
by inflation, partially offset by increases in property operating
expense reimbursements at certain of DHC's comparable
properties.
- DHC entered into new and renewal leases for an aggregate of
181,660 rentable square feet at weighted average rents that were
8.9% higher than prior rents for the same space.
SHOP Segment:
- DHC's senior housing operating portfolio, or SHOP, segment
consists of 237 communities, 209 of which are same property. Same
property Cash Basis NOI increased compared to the fourth quarter of
2021 primarily resulting from an increase in revenues due to higher
rates and increased occupancy. The increase in revenues was
partially offset by increases in operating expenses due to cost
increases related to labor, utilities, food and marketing.
Liquidity and Financing
Activities:
- As of December 31, 2022, DHC had approximately $688.3 million
of cash and cash equivalents and restricted cash.
- In October 2022, DHC repaid approximately $10.3 million of
secured debt encumbering one of its life science properties with an
annual interest rate of 4.85% and a maturity date in October 2022,
using cash on hand.
- In January 2023, pursuant to the terms of the agreement
governing its credit facility, DHC repaid $113.6 million in
outstanding borrowings under its credit facility and the facility
commitments were reduced to $586.4 million.
- In February 2023, DHC and its lenders amended the agreement
governing DHC's credit facility to, among other things, extend the
waiver of the fixed charge coverage ratio covenant through January
15, 2024 and reduce the facility commitments to $450.0 million
following DHC's repayment of $136.4 million in outstanding
borrowings.
Disposition Activities:
- In February 2023, DHC sold three former senior living
communities for an aggregate sales price of $2.8 million, excluding
closing costs.
Conference Call:
At 10:00 a.m. Eastern Time tomorrow morning, President and Chief
Executive Officer, Jennifer Francis, and Chief Financial Officer
and Treasurer, Richard Siedel, will host a conference call to
discuss DHC's fourth quarter 2022 financial results. The conference
call telephone number is (877) 329-4297. Participants calling from
outside the United States and Canada should dial (412) 317-5435. No
pass code is necessary to access the call from either number.
Participants should dial in about 15 minutes prior to the scheduled
start of the call. A replay of the conference call will be
available through 11:59 p.m. on Thursday, March 9, 2023. To access
the replay, dial (412) 317-0088. The replay pass code is
7884952.
A live audio webcast of the conference call will also be
available in a listen-only mode on DHC's website, www.dhcreit.com.
Participants wanting to access the webcast should visit DHC's
website about five minutes before the call. The archived webcast
will be available for replay on DHC's website following the call
for about one week. The transcription, recording and
retransmission in any way of DHC's fourth quarter conference call
are strictly prohibited without the prior written consent of
DHC.
Supplemental Data:
A copy of DHC's Fourth Quarter 2022 Supplemental Operating and
Financial Data is available for download at DHC's website,
www.dhcreit.com. DHC's website is not incorporated as part of this
press release.
DHC is a real estate investment trust, or REIT, focused on
owning high-quality healthcare properties located throughout the
United States. DHC seeks diversification across the health services
spectrum by care delivery and practice type, by scientific research
disciplines and by property type and location. As of December 31,
2022, DHC’s approximately $7.1 billion portfolio included 379
properties in 36 states and Washington, D.C., occupied by
approximately 500 tenants, and totaling approximately 9 million
square feet of life science and medical office properties and more
than 27,000 senior living units. DHC is managed by The RMR Group
(Nasdaq: RMR), a leading U.S. alternative asset management company
with more than $37 billion in assets under management as of
December 31, 2022 and more than 35 years of institutional
experience in buying, selling, financing and operating commercial
real estate. To learn more about DHC, visit www.dhcreit.com.
Non-GAAP Financial
Measures:
DHC presents certain "non-GAAP financial measures" within the
meaning of applicable rules of the Securities and Exchange
Commission, or the SEC, including FFO attributable to common
shareholders, Normalized FFO attributable to common shareholders,
NOI, Cash Basis NOI, same property NOI and same property Cash Basis
NOI for the three months and years ended December 31, 2022 and
2021, as well as certain of these measures for the three quarters
prior to the quarter ended December 31, 2022. These measures do not
represent cash generated by operating activities in accordance with
GAAP and should not be considered alternatives to net income (loss)
or net income (loss) attributable to common shareholders as
indicators of DHC's operating performance or as measures of DHC's
liquidity. These measures should be considered in conjunction with
net income (loss) and net income (loss) attributable to common
shareholders as presented in DHC's consolidated statements of
income (loss). DHC considers these non-GAAP measures to be
appropriate supplemental measures of operating performance for a
REIT, along with net income (loss) and net income (loss)
attributable to common shareholders. DHC believes these measures
provide useful information to investors because by excluding the
effects of certain historical amounts, such as depreciation and
amortization, they may facilitate a comparison of DHC's operating
performance between periods and with other REITs and, in the case
of NOI, Cash Basis NOI, same property NOI and same property Cash
Basis NOI, reflecting only those income and expense items that are
generated and incurred at the property level may help both
investors and management to understand the operations of DHC's
properties.
Please see the pages attached hereto for a more detailed
statement of DHC's operating results and financial condition, and
for an explanation of DHC's calculation of FFO attributable to
common shareholders, Normalized FFO attributable to common
shareholders, NOI, Cash Basis NOI, same property NOI and same
property Cash Basis NOI and a reconciliation of those amounts to
amounts determined in accordance with GAAP.
DIVERSIFIED HEALTHCARE
TRUST
CONSOLIDATED STATEMENTS OF
INCOME (LOSS)
(amounts in thousands, except
per share data)
(unaudited)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Revenues:
Rental income
$ 68,973
$ 102,034
$ 260,740
$ 408,589
Residents fees and services
267,912
234,697
1,022,826
974,623
Total revenues
336,885
336,731
1,283,566
1,383,212
Expenses:
Property operating expenses
285,166
273,716
1,109,070
1,091,812
Depreciation and amortization
63,353
68,388
239,280
271,131
General and administrative
5,764
8,549
26,435
34,087
Acquisition and certain other transaction
related costs
779
2,327
2,605
17,506
Impairment of assets
—
—
—
(174)
Total expenses
355,062
352,980
1,377,390
1,414,362
(Loss) gain on sale of properties
(202)
461,434
321,862
492,272
Losses on equity securities, net
(4,276)
(15,289)
(25,660)
(42,232)
Interest and other income (1)
9,169
786
15,929
20,635
Interest expense (including net
amortization of debt premiums, discounts and issuance costs of
$1,960, $3,631, $8,658 and $13,408, respectively)
(49,341)
(63,518)
(209,383)
(255,759)
Loss on modification or early
extinguishment of debt
—
—
(30,043)
(2,410)
(Loss) income from continuing operations
before income tax benefit (expense) and equity in net (losses)
earnings of investees
(62,827)
367,164
(21,119)
181,356
Income tax benefit (expense)
135
(406)
(710)
(1,430)
Equity in net (losses) earnings of
investees
(2,630)
—
6,055
—
Net (loss) income
(65,322)
366,758
(15,774)
179,926
Net income attributable to noncontrolling
interest
—
(1,173)
—
(5,411)
Net (loss) income attributable to common
shareholders
$ (65,322)
$ 365,585
$ (15,774)
$ 174,515
Weighted average common shares outstanding
(basic and diluted)
238,562
238,149
238,314
237,967
Per common share
amounts (basic and diluted):
Net (loss) income attributable to common
shareholders
$ (0.27)
$ 1.54
$ (0.07)
$ 0.73
(1) DHC recognized funds received under the Coronavirus Aid,
Relief, and Economic Security Act and the American Rescue Plan Act
of $3,243 and $587 during the three months ended December 31, 2022
and 2021, respectively, and $4,327 and $19,554 during the years
ended December 31, 2022 and 2021, respectively.
DIVERSIFIED HEALTHCARE
TRUST
FUNDS FROM OPERATIONS AND
NORMALIZED FUNDS FROM OPERATIONS ATTRIBUTABLE TO COMMON
SHAREHOLDERS
(amounts in thousands, except
per share data)
(unaudited)
Calculation of FFO and Normalized FFO
Attributable to Common Shareholders(1):
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Net (loss) income attributable to common
shareholders
$
(65,322)
$
365,585
$
(15,774)
$
174,515
Depreciation and amortization
63,353
68,388
239,280
271,131
Loss (gain) on sale of properties
202
(461,434)
(321,862)
(492,272)
Impairment of assets
—
—
—
(174)
Losses on equity securities, net
4,276
15,289
25,660
42,232
FFO adjustments attributable to
noncontrolling interest
—
(4,763)
—
(20,584)
Equity in net losses (earnings) of
unconsolidated joint ventures
2,630
—
(6,055)
—
Share of FFO from unconsolidated joint
ventures
2,002
273
11,518
273
Adjustments to reflect DHC's share of FFO
attributable to an equity method investment
(2,678)
(2,608)
(7,715)
(6,017)
FFO attributable to common
shareholders
4,463
(19,270)
(74,948)
(30,896)
Acquisition and certain other transaction
related costs
779
2,327
2,605
17,506
Loss on modification or early
extinguishment of debt
—
—
30,043
2,410
Adjustments to reflect DHC's share of
Normalized FFO attributable to an equity method investment
2,896
448
3,975
3,074
Normalized FFO attributable to common
shareholders
$
8,138
$
(16,495)
$
(38,325)
$
(7,906)
Weighted average common shares outstanding
(basic and diluted)
238,562
238,149
238,314
237,967
Per common share
data (basic and diluted):
Net (loss) income attributable to common
shareholders
$
(0.27)
$
1.54
$
(0.07)
$
0.73
FFO attributable to common
shareholders
$
0.02
$
(0.08)
$
(0.31)
$
(0.13)
Normalized FFO attributable to common
shareholders
$
0.03
$
(0.07)
$
(0.16)
$
(0.03)
Distributions declared
$
0.01
$
0.01
$
0.04
$
0.04
(1) DHC calculates FFO attributable to common shareholders and
Normalized FFO attributable to common shareholders as shown above.
FFO attributable to common shareholders is calculated on the basis
defined by the National Association of Real Estate Investment
Trusts, which is net income (loss) attributable to common
shareholders, calculated in accordance with GAAP, excluding any
gain or loss on sale of properties, equity in net earnings or
losses of unconsolidated joint ventures, loss on impairment of real
estate assets, gains or losses on equity securities, net, if any,
including adjustments to reflect DHC's proportionate share of FFO
of DHC's equity method investment in AlerisLife Inc. (Nasdaq: ALR)
and DHC's proportionate share of FFO from its unconsolidated joint
ventures, plus real estate depreciation and amortization of
consolidated properties and minus FFO adjustments attributable to
noncontrolling interest, as well as certain other adjustments
currently not applicable to DHC. In calculating Normalized FFO
attributable to common shareholders, DHC adjusts for the items
shown above. FFO attributable to common shareholders and Normalized
FFO attributable to common shareholders are among the factors
considered by DHC's Board of Trustees when determining the amount
of distributions to its shareholders. Other factors include, but
are not limited to, requirements to maintain DHC's qualification
for taxation as a REIT, limitations in the agreements governing
DHC's debt, the availability to DHC of debt and equity capital,
DHC's expectation of its future capital requirements and operating
performance, and DHC's expected needs for and availability of cash
to pay its obligations. Other real estate companies and REITs may
calculate FFO attributable to common shareholders and Normalized
FFO attributable to common shareholders differently than DHC
does.
DIVERSIFIED HEALTHCARE
TRUST
CALCULATION AND RECONCILIATION
OF NOI AND CASH BASIS NOI (1)
(dollars in thousands)
(unaudited)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Calculation of
NOI and Cash Basis NOI:
Revenues:
Rental income
$
68,973
$
102,034
$
260,740
$
408,589
Residents fees and services
267,912
234,697
1,022,826
974,623
Total revenues
336,885
336,731
1,283,566
1,383,212
Property operating expenses
(285,166
)
(273,716
)
(1,109,070
)
(1,091,812
)
NOI
51,719
63,015
174,496
291,400
Non-cash straight line rent adjustments
included in rental income
(1,723
)
(2,042
)
(8,916
)
(5,846
)
Lease value amortization included in
rental income
41
(1,648
)
245
(7,211
)
Non-cash amortization included in property
operating expenses
(200
)
(200
)
(797
)
(797
)
Cash Basis NOI
$
49,837
$
59,125
$
165,028
$
277,546
Reconciliation of
Net Income (Loss) Attributable to Common Shareholders to NOI and
Cash Basis NOI:
Net (loss) income attributable to common
shareholders
$
(65,322
)
$
365,585
$
(15,774
)
$
174,515
Net income attributable to noncontrolling
interest
—
1,173
—
5,411
Net (loss) income
(65,322
)
366,758
(15,774
)
179,926
Equity in net losses (earnings) of
investees
2,630
—
(6,055
)
—
Income tax (benefit) expense
(135
)
406
710
1,430
Loss on modification or early
extinguishment of debt
—
—
30,043
2,410
Interest expense
49,341
63,518
209,383
255,759
Interest and other income
(9,169
)
(786
)
(15,929
)
(20,635
)
Losses on equity securities, net
4,276
15,289
25,660
42,232
Loss (gain) on sale of properties
202
(461,434
)
(321,862
)
(492,272
)
Impairment of assets
—
—
—
(174
)
Acquisition and certain other transaction
related costs
779
2,327
2,605
17,506
General and administrative
5,764
8,549
26,435
34,087
Depreciation and amortization
63,353
68,388
239,280
271,131
NOI
51,719
63,015
174,496
291,400
Non-cash straight line rent adjustments
included in rental income
(1,723
)
(2,042
)
(8,916
)
(5,846
)
Lease value amortization included in
rental income
41
(1,648
)
245
(7,211
)
Non-cash amortization included in property
operating expenses
(200
)
(200
)
(797
)
(797
)
Cash Basis NOI
$
49,837
$
59,125
$
165,028
$
277,546
(1) The calculations of NOI, Cash Basis NOI, same property NOI
and same property Cash Basis NOI exclude certain components of net
income (loss) attributable to common shareholders in order to
provide results that are more closely related to DHC's property
level results of operations. DHC calculates NOI and Cash Basis NOI
as shown above and same property NOI and same property Cash Basis
NOI as shown below. DHC defines NOI as income from its real estate
less its property operating expenses. NOI excludes amortization of
capitalized tenant improvement costs and leasing commissions that
DHC records as depreciation and amortization. DHC defines Cash
Basis NOI as NOI excluding non-cash straight line rent adjustments,
lease value amortization, lease termination fee amortization, if
any, and non-cash amortization included in property operating
expenses. DHC calculates same property NOI and same property Cash
Basis NOI in the same manner that it calculates the corresponding
NOI and Cash Basis NOI amounts, except that it only includes same
properties in calculating same property NOI and same property Cash
Basis NOI. DHC uses NOI, Cash Basis NOI, same property NOI and same
property Cash Basis NOI to evaluate individual and company-wide
property level performance. Other real estate companies and REITs
may calculate NOI, Cash Basis NOI, same property NOI and same
property Cash Basis NOI differently than DHC does.
DIVERSIFIED HEALTHCARE
TRUST
Calculation and Reconciliation
of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash
Basis NOI by Segment (1)
(dollars in thousands)
(unaudited)
Office
Portfolio
For the Three Months
Ended
Calculation of NOI and Cash Basis
NOI:
12/31/2022
9/30/2022
6/30/2022
3/31/2022
12/31/2021
Rental income
$
59,529
$
55,254
$
52,610
$
54,997
$
89,950
Property operating expenses
(24,647
)
(24,179
)
(22,026
)
(23,447
)
(32,313
)
NOI
$
34,882
$
31,075
$
30,584
$
31,550
$
57,637
NOI
$
34,882
$
31,075
$
30,584
$
31,550
$
57,637
Less:
Non-cash straight line rent adjustments
included in rental income
2,891
2,573
2,532
1,511
1,827
Lease value amortization included in
rental income
(58
)
(59
)
(74
)
(122
)
1,631
Non-cash amortization included in property
operating expenses
200
199
199
199
200
Cash Basis NOI
$
31,849
$
28,362
$
27,927
$
29,962
$
53,979
Reconciliation of NOI to Same Property
NOI:
NOI
$
34,882
$
31,075
$
30,584
$
31,550
$
57,637
Less:
NOI of properties not included in same
property results
7,101
2,440
2,080
3,334
29,236
Same Property NOI (2)
$
27,781
$
28,635
$
28,504
$
28,216
$
28,401
Reconciliation of Same Property NOI to
Same Property Cash Basis NOI:
Same Property NOI (2)
$
27,781
$
28,635
$
28,504
$
28,216
$
28,401
Less:
Non-cash straight line rent adjustments
included in rental income
693
514
793
1,187
1,230
Lease value amortization included in
rental income
(58
)
(59
)
(74
)
(132
)
(144
)
Non-cash amortization included in property
operating expenses
172
209
135
172
98
Same Property Cash Basis NOI (2)
$
26,974
$
27,971
$
27,650
$
26,989
$
27,217
(1) See page 6 for the calculation of NOI and a reconciliation
of net income (loss) attributable to common shareholders determined
in accordance with GAAP to that amount. See footnote 1 on page 6 of
this press release for a definition of NOI, Cash Basis NOI, same
property NOI and same property Cash Basis NOI, and page 3 for a
description of why management believes they are appropriate
supplemental measures and a description of how management uses
these measures.
(2) Consists of properties owned and in service continuously
since October 1, 2021; excludes properties classified as held for
sale or out of service undergoing redevelopment, if any, and
medical office and life science properties owned by unconsolidated
joint ventures in which DHC owns an equity interest.
DIVERSIFIED HEALTHCARE
TRUST
Calculation and Reconciliation
of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash
Basis NOI by Segment (1)
(dollars in thousands)
(unaudited)
SHOP
For the Three Months
Ended
Calculation of NOI and Cash Basis
NOI:
12/31/2022
9/30/2022
6/30/2022
3/31/2022
12/31/2021
Residents fees and services
$
267,912
$
258,960
$
250,506
$
245,448
$
234,697
Property operating expenses
(260,043
)
(264,722
)
(244,040
)
(245,295
)
(241,403
)
NOI / Cash Basis NOI
$
7,869
$
(5,762
)
$
6,466
$
153
$
(6,706
)
Reconciliation of NOI / Cash Basis NOI
to Same Property NOI / Same Property Cash Basis NOI:
NOI / Cash Basis NOI
$
7,869
$
(5,762
)
$
6,466
$
153
$
(6,706
)
Less:
NOI / Cash Basis NOI of properties not
included in same property results
(2,078
)
(7,460
)
(3,472
)
(3,004
)
(3,441
)
Same Property NOI / Same Property Cash
Basis NOI (2)
$
9,947
$
1,698
$
9,938
$
3,157
$
(3,265
)
(1) See page 6 for the calculation of NOI and a reconciliation
of net income (loss) attributable to common shareholders determined
in accordance with GAAP to that amount. See footnote 1 on page 6 of
this press release for a definition of NOI, Cash Basis NOI, same
property NOI and same property Cash Basis NOI, and page 3 for a
description of why management believes they are appropriate
supplemental measures and a description of how management uses
these measures.
(2) Consists of properties owned, in service, reported in the
same segment and operated by the same operator continuously since
October 1, 2021; excludes properties classified as held for sale,
closed or out of service, if any.
DIVERSIFIED HEALTHCARE
TRUST
Calculation and Reconciliation
of NOI, Cash Basis NOI, Same Property NOI and Same Property Cash
Basis NOI (1)
(dollars in thousands)
(unaudited)
Consolidated
For the Three Months
Ended
Calculation of NOI and Cash Basis
NOI:
12/31/2022
9/30/2022
6/30/2022
3/31/2022
12/31/2021
Rental income / residents fees and
services
$
336,885
$
322,920
$
313,028
$
310,733
$
336,731
Property operating expenses
(285,166
)
(289,096
)
(266,066
)
(268,742
)
(273,716
)
NOI
$
51,719
$
33,824
$
46,962
$
41,991
$
63,015
NOI
$
51,719
$
33,824
$
46,962
$
41,991
$
63,015
Less:
Non-cash straight line rent adjustments
included in rental income
1,723
2,738
2,710
1,745
2,042
Lease value amortization included in
rental income
(41
)
(42
)
(57
)
(105
)
1,648
Non-cash amortization included in property
operating expenses
200
199
199
199
200
Cash Basis NOI
$
49,837
$
30,929
$
44,110
$
40,152
$
59,125
Reconciliation of NOI to Same Property
NOI:
NOI
$
51,719
$
33,824
$
46,962
$
41,991
$
63,015
Less:
NOI of properties not included in same
property results
4,016
(4,294
)
(457
)
1,656
26,926
Same Property NOI (2)
$
47,703
$
38,118
$
47,419
$
40,335
$
36,089
Reconciliation of Same Property NOI to
Same Property Cash Basis NOI:
Same Property NOI (2)
$
47,703
$
38,118
$
47,419
$
40,335
$
36,089
Less:
Non-cash straight line rent adjustments
included in rental income
855
704
1,014
1,422
1,467
Lease value amortization included in
rental income
(41
)
(42
)
(57
)
(115
)
(127
)
Non-cash amortization included in property
operating expenses
172
209
135
172
98
Same Property Cash Basis NOI (2)
$
46,717
$
37,247
$
46,327
$
38,856
$
34,651
(1) See page 6 for the calculation of NOI and a reconciliation
of net income (loss) attributable to common shareholders determined
in accordance with GAAP to that amount. See footnote 1 on page 6 of
this press release for a definition of NOI, Cash Basis NOI, same
property NOI and same property Cash Basis NOI, and page 3 for a
description of why management believes they are appropriate
supplemental measures and a description of how management uses
these measures.
(2) Consists of properties owned, in service, reported in the
same segment and operated by the same operator continuously since
October 1, 2021; excludes properties classified as held for sale,
closed or out of service, if any, and medical office and life
science properties owned by unconsolidated joint ventures in which
DHC owns an equity interest.
DIVERSIFIED HEALTHCARE
TRUST
CONDENSED CONSOLIDATED BALANCE
SHEETS
(dollars in thousands)
(unaudited)
December 31, 2022
December 31, 2021
Assets
Real estate properties
$ 6,692,543
$ 6,813,556
Accumulated depreciation
(1,828,352)
(1,737,807)
Total real estate properties, net
4,864,191
5,075,749
Investments in unconsolidated joint
ventures
155,477
215,127
Assets of properties held for sale
385
—
Cash and cash equivalents
658,065
634,848
Restricted cash
30,237
382,097
Acquired real estate leases and other
intangible assets, net
45,351
48,746
Other assets, net
248,387
266,947
Total assets
$ 6,002,093
$ 6,623,514
Liabilities and
Shareholders' Equity
Credit facility
$ 700,000
$ 800,000
Senior unsecured notes, net
2,317,700
2,806,811
Secured debt and finance leases, net
30,177
69,713
Accrued interest
29,417
29,845
Other liabilities
286,188
254,755
Total liabilities
3,363,482
3,961,124
Total shareholders' equity
2,638,611
2,662,390
Total liabilities and shareholders'
equity
$ 6,002,093
$ 6,623,514
Warning Concerning
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other securities laws. Whenever DHC uses words such as
“believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”,
"will", “may” and negatives or derivatives of these or similar
expressions, DHC is making forward-looking statements. These
forward-looking statements are based upon DHC's present intent,
beliefs or expectations, but forward-looking statements are not
guaranteed to occur and may not occur. Actual results may differ
materially from those contained in or implied by DHC's
forward-looking statements. Forward-looking statements involve
known and unknown risks, uncertainties and other factors, some of
which are beyond DHC's control. For example:
- Ms. Francis's statements regarding strong improvement in DHC's
SHOP segment, including occupancy and average monthly rate
increases leading to an increase in SHOP segment revenues, may
imply that DHC's senior living communities will continue to
improve, that DHC will realize occupancy and rate growth in future
quarters in its SHOP segment and that DHC's normalized FFO will
remain positive or increase in the future. However, DHC may not
realize continued improvement in its SHOP segment and any continued
improvement DHC may realize may not lead to a significant
improvement in DHC's overall financial results. Further, DHC's SHOP
segment is subject to various risks, many of which are beyond its
control, including rising or sustained high interest rates, high
inflation, labor market challenges, supply chain disruptions,
volatility in the public equity and debt markets, pandemics,
geopolitical instability and economic downturns or recessions. As a
result, DHC may not realize occupancy or rate growth and/or
increased revenues in future periods, and DHC's occupancy and/or
rates may decline and its SHOP segment revenues may decrease.
Further, DHC's normalized FFO may not be positive in future
quarters and may decline, and
- Although DHC has obtained a waiver from compliance with the
fixed charge coverage ratio covenant included in its credit
agreement through January 15, 2024, if DHC's operating results and
financial condition are further adversely impacted by current
economic conditions or otherwise, or its operating results do not
sufficiently and timely improve, DHC may fail to comply with the
terms of the waiver and other requirements under its credit
agreement, and it may also fail to satisfy certain financial
requirements under its indentures and their supplements. For
example, DHC's ratio of consolidated income available for debt
service to debt service was below the 1.5x incurrence requirement
under the credit agreement and its public debt covenants as of
December 31, 2022, and DHC cannot be certain how long this ratio
will remain below 1.5x. DHC is unable to incur additional debt
until this ratio is at or above 1.5x on a pro forma basis, but it
is not required to repay outstanding debt as a result of failure to
comply with this financial requirement. If DHC believes it will not
be able to satisfy its financial or other covenants, it expects
that it would seek additional waivers or amendments prior to any
covenant violation or seek other financing alternatives; however,
DHC may fail to obtain any such additional waivers or amendments or
financing alternatives on acceptable terms or at all.
The information contained in DHC's filings with the SEC,
including under “Risk Factors” in DHC's periodic reports, or
incorporated therein, identifies important factors that could cause
DHC's actual results to differ materially from those stated in or
implied by DHC's forward-looking statements. DHC's filings with the
SEC are available on the SEC's website at www.sec.gov.
You should not place undue reliance upon forward-looking
statements.
Except as required by law, DHC does not intend to update or
change any forward-looking statements as a result of new
information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230301006015/en/
Melissa McCarthy, Manager, Investor Relations (617) 796-8234
www.dhcreit.com
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