Diversified Healthcare Trust Announces Fourth Quarter 2021 Results
Diversified Healthcare Trust (Nasdaq: DHC) reported financial results for Q4 2021, highlighting a net income of $365.6 million ($1.54/share) and a gain on property sales of $461.4 million. The company raised over $1 billion from joint ventures and completed the transition of 107 senior living communities to new operators. However, the normalized funds from operations (FFO) were negative at $(16.5) million. DHC maintained strong occupancy rates in its Office Portfolio at 91.3% but faced significant declines in the Same Property Cash Basis NOI for its SHOP segment, down 63.3% year-over-year.
- Raised over $1 billion from joint ventures in late 2021 and early 2022.
- Achieved a net income of $365.6 million for Q4 2021.
- Completed the transition of 107 senior living communities to new operators.
- Strong occupancy in Office Portfolio at 91.3%.
- Reported negative normalized FFO of $(16.5) million for Q4 2021.
- Same Property Cash Basis NOI for SHOP segment decreased by 63.3% year-over-year.
Raised Over
Completed Transition of 107 Senior Living Communities
Amended Revolving Credit Facility to Provide Covenant Relief through
1.35 Million Square Feet of Leasing Activity at Over
“We are pleased with the progress made in the fourth quarter in our SHOP segment and with our enhanced liquidity as we enter 2022,” stated
Quarterly Results:
-
Reported net income attributable to common shareholders of
, or$365.6 million per share.$1.54 -
Reported normalized funds from operations, or Normalized FFO, attributable to common shareholders of
, or$(16.5) million per share.$(0.07) -
Recorded a gain on sale of properties of
, or$461.4 million per share, from DHC's sale of equity interest in its existing joint venture to another third party institutional investor.$1.94
|
|
As of and For the Three Months Ended |
||||
|
|
|
|
|
|
|
Occupancy |
|
|
|
|
|
|
Office Portfolio (period end) |
|
|
|
|
|
|
SHOP (average day for period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Property Occupancy |
|
|
|
|
|
|
Office Portfolio (period end) |
|
|
|
|
|
|
SHOP (average day for period) |
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||
|
|
|
|
|
|
Change |
|
|
|
Change |
Same Property Cash Basis NOI (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
Office Portfolio |
|
|
|
|
|
|
|
|
|
(0.7)% |
SHOP |
|
|
|
|
|
(63.3)% |
|
|
|
(82.5)% |
Total Consolidated Same Property Cash Basis NOI |
|
|
|
|
|
(4.6)% |
|
|
|
(16.8)% |
Reconciliations of net income (loss) attributable to common shareholders determined in accordance with
Office Portfolio Segment:
- Same property Cash Basis NOI decreased compared to the fourth quarter of 2020 primarily resulting from lease expirations at certain of DHC's comparable properties, partially offset by increases in parking income.
-
DHC entered into new and renewal leases for an aggregate of 1,352,274 rentable square feet at weighted average rents that were
6.7% higher than prior rents for the same space.
SHOP Segment:
- Same property Cash Basis NOI decreased compared to the fourth quarter of 2020, primarily resulting from decreases in occupancy related to the COVID-19 pandemic, partially offset by decreases in operating expenses due to decreases in occupancies.
- Recent same property occupancy rates in DHC's senior housing operating portfolio, or SHOP, segment consisting of 120 communities are as follows:
|
|
2021 |
||||||||||||||||||||||||||||||||||
|
|
Jan |
|
Feb |
|
Mar |
|
Apr |
|
May |
|
Jun |
|
Jul |
|
Aug |
|
Sep |
|
Oct |
|
Nov |
|
Dec |
||||||||||||
SHOP Same Property Average Occupancy |
|
73.1 |
% |
|
72.4 |
% |
|
72.6 |
% |
|
72.6 |
% |
|
73.2 |
% |
|
72.8 |
% |
|
72.9 |
% |
|
73.4 |
% |
|
73.8 |
% |
|
73.9 |
% |
|
74.2 |
% |
|
74.1 |
% |
Sequential Occupancy Change |
|
|
|
(0.7 |
) |
|
0.2 |
|
|
— |
|
|
0.6 |
|
|
(0.4 |
) |
|
0.1 |
|
|
0.5 |
|
|
0.4 |
|
|
0.1 |
|
|
0.3 |
|
|
(0.1 |
) |
Management Transition Completion:
As of
Joint Ventures:
-
In
December 2021 , DHC sold a35% equity interest from its55% equity interest in its existing joint venture for a property located inBoston, MA , to an unrelated third party global institutional investor for approximately , and DHC retained a$378.0 million 20% equity interest in the joint venture. Effective upon the closing of the sale, the results of operations of the joint venture are no longer consolidated into DHC's financial results, including the of secured debt on the property, and DHC's remaining$620.0 million 20% equity interest in the joint venture is accounted for as an unconsolidated joint venture interest. -
In
January 2022 , DHC entered into a new joint venture for 10 properties it owned in its Office Portfolio segment with two unrelated third party global institutional investors and received cash proceeds of . The investors acquired a combined$653.3 million 80% equity interest in the joint venture for an aggregate purchase price of , and DHC retained a$196.7 million 20% equity interest in the joint venture. The purchase price was based upon a property valuation of approximately , less approximately$702.5 million of secured debt on the properties incurred by the joint venture.$456.6 million
Liquidity and Financing Activities:
-
In
October 2021 , DHC exercised its option to extend the maturity date of its revolving credit facility by one year toJanuary 2023 . -
As of
December 31, 2021 , DHC had approximately of cash and cash equivalents and restricted cash.$1.0 billion -
As of
December 31, 2021 , DHC's ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under DHC's revolving credit facility and its public debt covenants, as the effects of the COVID-19 pandemic continued to adversely impact DHC's operations. DHC is currently unable to incur additional debt because this ratio is below 1.5x on a pro forma basis. -
In
February 2022 , DHC and its lenders amended the agreement governing its revolving credit facility to, among other things, extend the waiver of the fixed charge coverage ratio covenant throughDecember 31, 2022 and reduce the facility commitments to , and DHC also exercised its option to extend the maturity date of the revolving credit facility through$700.0 million January 2024 .
Conference Call:
At
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 2021 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
Non-GAAP Financial Measures:
DHC presents certain "non-GAAP financial measures" within the meaning of applicable rules of the
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.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) |
||||||||||||||||
(amounts in thousands, except per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Rental income |
|
$ |
102,034 |
|
|
$ |
106,272 |
|
|
$ |
408,589 |
|
|
$ |
427,215 |
|
Residents fees and services |
|
|
234,697 |
|
|
|
278,637 |
|
|
|
974,623 |
|
|
|
1,204,811 |
|
Total revenues |
|
|
336,731 |
|
|
|
384,909 |
|
|
|
1,383,212 |
|
|
|
1,632,026 |
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses: |
|
|
|
|
|
|
|
|
||||||||
Property operating expenses |
|
|
273,716 |
|
|
|
302,207 |
|
|
|
1,091,812 |
|
|
|
1,236,357 |
|
Depreciation and amortization |
|
|
68,388 |
|
|
|
65,681 |
|
|
|
271,131 |
|
|
|
270,147 |
|
General and administrative |
|
|
8,549 |
|
|
|
7,461 |
|
|
|
34,087 |
|
|
|
30,593 |
|
Acquisition and certain other transaction related costs |
|
|
2,327 |
|
|
|
11 |
|
|
|
17,506 |
|
|
|
814 |
|
Impairment of assets |
|
|
— |
|
|
|
361 |
|
|
|
(174 |
) |
|
|
106,972 |
|
Total expenses |
|
|
352,980 |
|
|
|
375,721 |
|
|
|
1,414,362 |
|
|
|
1,644,883 |
|
|
|
|
|
|
|
|
|
|
||||||||
Gain on sale of properties |
|
|
461,434 |
|
|
|
4,084 |
|
|
|
492,272 |
|
|
|
6,487 |
|
Gains and losses on equity securities, net |
|
|
(15,289 |
) |
|
|
19,565 |
|
|
|
(42,232 |
) |
|
|
34,106 |
|
Interest and other income (1) |
|
|
786 |
|
|
|
10,213 |
|
|
|
20,635 |
|
|
|
18,221 |
|
Interest expense (including net amortization of debt premiums, discounts and issuance costs of |
|
|
(63,518 |
) |
|
|
(57,768 |
) |
|
|
(255,759 |
) |
|
|
(201,483 |
) |
Gain on lease termination |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22,896 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(2,410 |
) |
|
|
(427 |
) |
Income (loss) from continuing operations before income tax expense |
|
|
367,164 |
|
|
|
(14,718 |
) |
|
|
181,356 |
|
|
|
(133,057 |
) |
Income tax expense |
|
|
(406 |
) |
|
|
(202 |
) |
|
|
(1,430 |
) |
|
|
(1,250 |
) |
Net income (loss) |
|
|
366,758 |
|
|
|
(14,920 |
) |
|
|
179,926 |
|
|
|
(134,307 |
) |
Net income attributable to noncontrolling interest |
|
|
(1,173 |
) |
|
|
(1,308 |
) |
|
|
(5,411 |
) |
|
|
(5,146 |
) |
Net income (loss) attributable to common shareholders |
|
$ |
365,585 |
|
|
$ |
(16,228 |
) |
|
$ |
174,515 |
|
|
$ |
(139,453 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding (basic) |
|
|
238,149 |
|
|
|
237,834 |
|
|
|
237,967 |
|
|
|
237,739 |
|
Weighted average common shares outstanding (diluted) |
|
|
238,149 |
|
|
|
237,834 |
|
|
|
237,967 |
|
|
|
237,739 |
|
|
|
|
|
|
|
|
|
|
||||||||
Per common share amounts (basic and diluted): |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders |
|
$ |
1.54 |
|
|
$ |
(0.07 |
) |
|
$ |
0.73 |
|
|
$ |
(0.59 |
) |
(1) |
DHC recognized funds received under the Coronavirus Aid, Relief, and Economic Security Act of |
|
||||||||||||||||
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 |
|
Year Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net income (loss) attributable to common shareholders |
|
$ |
365,585 |
|
|
$ |
(16,228 |
) |
|
$ |
174,515 |
|
|
$ |
(139,453 |
) |
Depreciation and amortization |
|
|
68,388 |
|
|
|
65,681 |
|
|
|
271,131 |
|
|
|
270,147 |
|
Gain on sale of properties |
|
|
(461,434 |
) |
|
|
(4,084 |
) |
|
|
(492,272 |
) |
|
|
(6,487 |
) |
Impairment of assets |
|
|
— |
|
|
|
361 |
|
|
|
(174 |
) |
|
|
106,972 |
|
Losses (gains) on equity securities, net |
|
|
15,289 |
|
|
|
(19,565 |
) |
|
|
42,232 |
|
|
|
(34,106 |
) |
FFO adjustments attributable to noncontrolling interest |
|
|
(4,763 |
) |
|
|
(5,275 |
) |
|
|
(20,584 |
) |
|
|
(21,100 |
) |
Share of FFO from unconsolidated joint venture |
|
|
273 |
|
|
|
— |
|
|
|
273 |
|
|
|
— |
|
Adjustments to reflect DHC's share of FFO attributable to an equity method investment |
|
|
(2,608 |
) |
|
|
1,743 |
|
|
|
(6,017 |
) |
|
|
839 |
|
FFO attributable to common shareholders |
|
|
(19,270 |
) |
|
|
22,633 |
|
|
|
(30,896 |
) |
|
|
176,812 |
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition and certain other transaction related costs |
|
|
2,327 |
|
|
|
11 |
|
|
|
17,506 |
|
|
|
814 |
|
Costs and payment obligations related to compliance assessment at one of DHC's senior living communities |
|
|
— |
|
|
|
(402 |
) |
|
|
— |
|
|
|
5,770 |
|
Gain on lease termination |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22,896 |
) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
2,410 |
|
|
|
427 |
|
Adjustments to reflect DHC's share of Normalized FFO attributable to an equity method investment |
|
|
448 |
|
|
|
12 |
|
|
|
3,074 |
|
|
|
9,187 |
|
Normalized FFO attributable to common shareholders |
|
$ |
(16,495 |
) |
|
$ |
22,254 |
|
|
$ |
(7,906 |
) |
|
$ |
170,114 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding (basic) |
|
|
238,149 |
|
|
|
237,834 |
|
|
|
237,967 |
|
|
|
237,739 |
|
Weighted average common shares outstanding (diluted) |
|
|
238,149 |
|
|
|
237,834 |
|
|
|
237,967 |
|
|
|
237,739 |
|
|
|
|
|
|
|
|
|
|
||||||||
Per common share data (basic and diluted): |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders |
|
$ |
1.54 |
|
|
$ |
(0.07 |
) |
|
$ |
0.73 |
|
|
$ |
(0.59 |
) |
FFO attributable to common shareholders |
|
$ |
(0.08 |
) |
|
$ |
0.10 |
|
|
$ |
(0.13 |
) |
|
$ |
0.74 |
|
Normalized FFO attributable to common shareholders |
|
$ |
(0.07 |
) |
|
$ |
0.09 |
|
|
$ |
(0.03 |
) |
|
$ |
0.72 |
|
Distributions declared |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
0.18 |
|
(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 |
|
||||||||||||||||
CALCULATION AND RECONCILIATION OF NOI AND CASH BASIS NOI (1) |
||||||||||||||||
(dollars in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Calculation of NOI and Cash Basis NOI: |
|
|
|
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Rental income |
|
$ |
102,034 |
|
|
$ |
106,272 |
|
|
$ |
408,589 |
|
|
$ |
427,215 |
|
Residents fees and services |
|
|
234,697 |
|
|
|
278,637 |
|
|
|
974,623 |
|
|
|
1,204,811 |
|
Total revenues |
|
|
336,731 |
|
|
|
384,909 |
|
|
|
1,383,212 |
|
|
|
1,632,026 |
|
Property operating expenses |
|
|
(273,716 |
) |
|
|
(302,207 |
) |
|
|
(1,091,812 |
) |
|
|
(1,236,357 |
) |
NOI |
|
|
63,015 |
|
|
|
82,702 |
|
|
|
291,400 |
|
|
|
395,669 |
|
Non-cash straight line rent adjustments included in rental income |
|
|
(2,042 |
) |
|
|
(3,040 |
) |
|
|
(5,846 |
) |
|
|
(6,069 |
) |
Lease value amortization included in rental income |
|
|
(1,648 |
) |
|
|
(1,846 |
) |
|
|
(7,211 |
) |
|
|
(7,405 |
) |
Non-cash amortization included in property operating expenses |
|
|
(200 |
) |
|
|
(200 |
) |
|
|
(797 |
) |
|
|
(797 |
) |
Cash Basis NOI |
|
$ |
59,125 |
|
|
$ |
77,616 |
|
|
$ |
277,546 |
|
|
$ |
381,398 |
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Net Income (Loss) Attributable to Common Shareholders to NOI and Cash Basis NOI: |
||||||||||||||||
Net income (loss) attributable to common shareholders |
|
$ |
365,585 |
|
|
$ |
(16,228 |
) |
|
$ |
174,515 |
|
|
$ |
(139,453 |
) |
Net income attributable to noncontrolling interest |
|
|
1,173 |
|
|
|
1,308 |
|
|
|
5,411 |
|
|
|
5,146 |
|
Net income (loss) |
|
|
366,758 |
|
|
|
(14,920 |
) |
|
|
179,926 |
|
|
|
(134,307 |
) |
Income tax expense |
|
|
406 |
|
|
|
202 |
|
|
|
1,430 |
|
|
|
1,250 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
2,410 |
|
|
|
427 |
|
Gain on lease termination |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22,896 |
) |
Interest expense |
|
|
63,518 |
|
|
|
57,768 |
|
|
|
255,759 |
|
|
|
201,483 |
|
Interest and other income |
|
|
(786 |
) |
|
|
(10,213 |
) |
|
|
(20,635 |
) |
|
|
(18,221 |
) |
Losses (gains) on equity securities, net |
|
|
15,289 |
|
|
|
(19,565 |
) |
|
|
42,232 |
|
|
|
(34,106 |
) |
Gain on sale of properties |
|
|
(461,434 |
) |
|
|
(4,084 |
) |
|
|
(492,272 |
) |
|
|
(6,487 |
) |
Impairment of assets |
|
|
— |
|
|
|
361 |
|
|
|
(174 |
) |
|
|
106,972 |
|
Acquisition and certain other transaction related costs |
|
|
2,327 |
|
|
|
11 |
|
|
|
17,506 |
|
|
|
814 |
|
General and administrative |
|
|
8,549 |
|
|
|
7,461 |
|
|
|
34,087 |
|
|
|
30,593 |
|
Depreciation and amortization |
|
|
68,388 |
|
|
|
65,681 |
|
|
|
271,131 |
|
|
|
270,147 |
|
NOI |
|
|
63,015 |
|
|
|
82,702 |
|
|
|
291,400 |
|
|
|
395,669 |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-cash straight line rent adjustments included in rental income |
|
|
(2,042 |
) |
|
|
(3,040 |
) |
|
|
(5,846 |
) |
|
|
(6,069 |
) |
Lease value amortization included in rental income |
|
|
(1,648 |
) |
|
|
(1,846 |
) |
|
|
(7,211 |
) |
|
|
(7,405 |
) |
Non-cash amortization included in property operating expenses |
|
|
(200 |
) |
|
|
(200 |
) |
|
|
(797 |
) |
|
|
(797 |
) |
Cash Basis NOI |
|
$ |
59,125 |
|
|
$ |
77,616 |
|
|
$ |
277,546 |
|
|
$ |
381,398 |
|
(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. |
|
||||||||||||||||||||
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: |
|
|
|
|
|
|
|
|
|
|||||||||||
Rental income |
$ |
89,950 |
|
|
$ |
91,520 |
|
|
$ |
92,804 |
|
|
$ |
93,323 |
|
|
$ |
94,850 |
|
|
Property operating expenses |
|
(32,313 |
) |
|
|
(32,386 |
) |
|
|
(31,321 |
) |
|
|
(31,293 |
) |
|
|
(32,709 |
) |
|
NOI |
$ |
57,637 |
|
|
$ |
59,134 |
|
|
$ |
61,483 |
|
|
$ |
62,030 |
|
|
$ |
62,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI |
$ |
57,637 |
|
|
$ |
59,134 |
|
|
$ |
61,483 |
|
|
$ |
62,030 |
|
|
$ |
62,141 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||||||
Non-cash straight line rent adjustments included in rental income |
|
1,827 |
|
|
|
1,800 |
|
|
|
1,597 |
|
|
|
1,083 |
|
|
|
1,114 |
|
|
Lease value amortization included in rental income |
|
1,631 |
|
|
|
1,830 |
|
|
|
1,833 |
|
|
|
1,822 |
|
|
|
1,790 |
|
|
Non-cash amortization included in property operating expenses |
|
200 |
|
|
|
199 |
|
|
|
199 |
|
|
|
199 |
|
|
|
200 |
|
|
Cash Basis NOI |
$ |
53,979 |
|
|
$ |
55,305 |
|
|
$ |
57,854 |
|
|
$ |
58,926 |
|
|
$ |
59,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of NOI to Same Property NOI: |
|
|
|
|
|
|
|
|
|
|||||||||||
NOI |
$ |
57,637 |
|
|
$ |
59,134 |
|
|
$ |
61,483 |
|
|
$ |
62,030 |
|
|
$ |
62,141 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||||||
NOI of properties not included in same property results |
|
18,630 |
|
|
|
20,795 |
|
|
|
22,104 |
|
|
|
22,995 |
|
|
|
23,838 |
|
|
Same Property NOI (2) |
$ |
39,007 |
|
|
$ |
38,339 |
|
|
$ |
39,379 |
|
|
$ |
39,035 |
|
|
$ |
38,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of Same Property NOI to Same Property Cash Basis NOI: |
|
|
|
|
|
|
|
|
|
|||||||||||
Same Property NOI (2) |
$ |
39,007 |
|
|
$ |
38,339 |
|
|
$ |
39,379 |
|
|
$ |
39,035 |
|
|
$ |
38,303 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||||||
Non-cash straight line rent adjustments included in rental income |
|
1,645 |
|
|
|
1,308 |
|
|
|
884 |
|
|
|
694 |
|
|
|
707 |
|
|
Lease value amortization included in rental income |
|
(178 |
) |
|
|
(172 |
) |
|
|
(170 |
) |
|
|
(170 |
) |
|
|
(203 |
) |
|
Non-cash amortization included in property operating expenses |
|
119 |
|
|
|
119 |
|
|
|
119 |
|
|
|
118 |
|
|
|
116 |
|
|
Same Property Cash Basis NOI (2) |
$ |
37,421 |
|
|
$ |
37,084 |
|
|
$ |
38,546 |
|
|
$ |
38,393 |
|
|
$ |
37,683 |
|
(1) |
See page 7 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 7 of this press release for a definition of NOI, Cash Basis NOI, same property NOI and same property Cash Basis NOI, and page 4 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 |
|
||||||||||||||||||||
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: |
|
|
|
|
|
|
|
|
|
|||||||||||
Residents fees and services |
$ |
234,697 |
|
|
$ |
236,013 |
|
|
$ |
243,947 |
|
|
$ |
259,966 |
|
|
$ |
278,637 |
|
|
Property operating expenses |
|
(241,403 |
) |
|
|
(233,687 |
) |
|
|
(233,311 |
) |
|
|
(256,098 |
) |
|
|
(269,498 |
) |
|
NOI / Cash Basis NOI |
$ |
(6,706 |
) |
|
$ |
2,326 |
|
|
$ |
10,636 |
|
|
$ |
3,868 |
|
|
$ |
9,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of NOI / Cash Basis NOI to Same Property NOI / Same Property Cash Basis NOI: |
|
|
|
|
|
|
|
|
|
|||||||||||
NOI / Cash Basis NOI |
$ |
(6,706 |
) |
|
$ |
2,326 |
|
|
$ |
10,636 |
|
|
$ |
3,868 |
|
|
$ |
9,139 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||||||
NOI / Cash Basis NOI of properties not included in same property results |
|
(9,450 |
) |
|
|
(5,154 |
) |
|
|
(1,873 |
) |
|
|
(6,673 |
) |
|
|
(6,512 |
) |
|
Same Property NOI / Same Property Cash Basis NOI (2) |
$ |
2,744 |
|
|
$ |
7,480 |
|
|
$ |
12,509 |
|
|
$ |
10,541 |
|
|
$ |
15,651 |
|
(1) |
See page 7 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 7 of this press release for a definition of NOI, Cash Basis NOI, same property NOI and same property Cash Basis NOI, and page 4 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 which have been operated by the same operator continuously since |
|
||||||||||||||||||||
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: |
|
|
|
|
|
|
|
|
|
|||||||||||
Rental income / residents fees and services |
$ |
336,731 |
|
|
$ |
337,416 |
|
|
$ |
346,341 |
|
|
$ |
362,724 |
|
|
$ |
384,909 |
|
|
Property operating expenses |
|
(273,716 |
) |
|
|
(266,073 |
) |
|
|
(264,632 |
) |
|
|
(287,391 |
) |
|
|
(302,207 |
) |
|
NOI |
$ |
63,015 |
|
|
$ |
71,343 |
|
|
$ |
81,709 |
|
|
$ |
75,333 |
|
|
$ |
82,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
NOI |
$ |
63,015 |
|
|
$ |
71,343 |
|
|
$ |
81,709 |
|
|
$ |
75,333 |
|
|
$ |
82,702 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||||||
Non-cash straight line rent adjustments included in rental income |
|
2,042 |
|
|
|
1,679 |
|
|
|
1,321 |
|
|
|
804 |
|
|
|
3,040 |
|
|
Lease value amortization included in rental income |
|
1,648 |
|
|
|
1,848 |
|
|
|
1,849 |
|
|
|
1,866 |
|
|
|
1,846 |
|
|
Non-cash amortization included in property operating expenses |
|
200 |
|
|
|
199 |
|
|
|
199 |
|
|
|
199 |
|
|
|
200 |
|
|
Cash Basis NOI |
$ |
59,125 |
|
|
$ |
67,617 |
|
|
$ |
78,340 |
|
|
$ |
72,464 |
|
|
$ |
77,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of NOI to Same Property NOI: |
|
|
|
|
|
|
|
|
|
|||||||||||
NOI |
$ |
63,015 |
|
|
$ |
71,343 |
|
|
$ |
81,709 |
|
|
$ |
75,333 |
|
|
$ |
82,702 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||||||
NOI of properties not included in same property results |
|
9,180 |
|
|
|
15,641 |
|
|
|
20,231 |
|
|
|
16,322 |
|
|
|
17,544 |
|
|
Same Property NOI (2) |
$ |
53,835 |
|
|
$ |
55,702 |
|
|
$ |
61,478 |
|
|
$ |
59,011 |
|
|
$ |
65,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of Same Property NOI to Same Property Cash Basis NOI: |
|
|
|
|
|
|
|
|
|
|||||||||||
Same Property NOI (2) |
$ |
53,835 |
|
|
$ |
55,702 |
|
|
$ |
61,478 |
|
|
$ |
59,011 |
|
|
$ |
65,158 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||||||
Non-cash straight line rent adjustments included in rental income |
|
1,860 |
|
|
|
1,187 |
|
|
|
608 |
|
|
|
415 |
|
|
|
2,635 |
|
|
Lease value amortization included in rental income |
|
(161 |
) |
|
|
(154 |
) |
|
|
(154 |
) |
|
|
(126 |
) |
|
|
(148 |
) |
|
Non-cash amortization included in property operating expenses |
|
119 |
|
|
|
119 |
|
|
|
119 |
|
|
|
118 |
|
|
|
116 |
|
|
Same Property Cash Basis NOI (2) |
$ |
52,017 |
|
|
$ |
54,550 |
|
|
$ |
60,905 |
|
|
$ |
58,604 |
|
|
$ |
62,555 |
|
(1) |
See page 7 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 7 of this press release for a definition of NOI, Cash Basis NOI, same property NOI and same property Cash Basis NOI, and page 4 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 and operated by the same operator continuously since |
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(dollars in thousands) |
||||||||
(unaudited) |
||||||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Real estate properties |
|
$ |
6,813,556 |
|
|
$ |
7,410,730 |
|
Accumulated depreciation |
|
|
(1,737,807 |
) |
|
|
(1,694,901 |
) |
Total real estate properties, net |
|
|
5,075,749 |
|
|
|
5,715,829 |
|
|
|
|
|
|
||||
Investment in unconsolidated joint venture |
|
|
215,127 |
|
|
|
— |
|
Assets of properties held for sale |
|
|
— |
|
|
|
112,437 |
|
Cash and cash equivalents |
|
|
634,848 |
|
|
|
74,417 |
|
Restricted cash |
|
|
382,097 |
|
|
|
16,432 |
|
Acquired real estate leases and other intangible assets, net |
|
|
48,746 |
|
|
|
286,513 |
|
Other assets, net |
|
|
266,947 |
|
|
|
270,796 |
|
Total assets |
|
$ |
6,623,514 |
|
|
$ |
6,476,424 |
|
|
|
|
|
|
||||
Liabilities and Equity |
|
|
|
|
||||
Revolving credit facility |
|
$ |
800,000 |
|
|
$ |
— |
|
Term loan, net |
|
|
— |
|
|
|
199,049 |
|
Senior unsecured notes, net |
|
|
2,806,811 |
|
|
|
2,608,189 |
|
Secured debt and finance leases, net |
|
|
69,713 |
|
|
|
691,573 |
|
Liabilities of properties held for sale |
|
|
— |
|
|
|
3,525 |
|
Accrued interest |
|
|
29,845 |
|
|
|
23,772 |
|
Assumed real estate lease obligations, net |
|
|
2,556 |
|
|
|
67,830 |
|
Other liabilities |
|
|
252,199 |
|
|
|
263,264 |
|
Total liabilities |
|
|
3,961,124 |
|
|
|
3,857,202 |
|
|
|
|
|
|
||||
Total equity |
|
|
2,662,390 |
|
|
|
2,619,222 |
|
Total liabilities and equity |
|
$ |
6,623,514 |
|
|
$ |
6,476,424 |
|
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 DHC's progress in its SHOP segment may imply that DHC's senior living communities will realize increased operating results and returns from its SHOP segment. However, DHC may not realize these increases, -
Ms. Francis states that DHC focused on the foundational work necessary to position its portfolio for a successful transition out of the global pandemic and notes certain transactions as examples, including DHC's transition of 107 of its senior living communities to new operators, continued investment of capital to improve or reposition many of its communities, recapitalization of an existing joint venture and completion of an additional joint venture. These statements may imply that DHC's operating results and financial position will improve as a result of these transactions. However, DHC's business is subject to various risks, including risks outside its control. As a result, DHC may not realize the benefits it expects from these efforts and transactions, -
Ms. Francis states that, with over of cash, DHC believes it is well-capitalized to continue investing in its portfolio, reduce leverage and maintain liquidity as its portfolio recovers. This may imply that DHC will be able to sustain sufficient liquidity and its portfolio will recover from current levels. However, if the duration and severity of the COVID-19 pandemic and its impacts on DHC and its managers and tenants significantly worsen for a sustained period, DHC may be required to utilize all or a significant portion of its cash and cash equivalents to fund its business and operations, which may reduce or eliminate the financial flexibility DHC believes it has achieved,$1 billion -
Although DHC has obtained a waiver from compliance with certain financial covenants under its credit agreement through
December 31, 2022 , if DHC's operating results and financial condition are further adversely impacted by the COVID-19 pandemic or fail to sufficiently improve, it may fail to comply with the terms of the waiver and other requirements under its credit agreement, and DHC may also fail to satisfy certain financial requirements under the agreements governing its public debt. For example, DHC's ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under its revolving credit facility and its public debt covenants as ofDecember 31, 2021 , and DHC cannot be certain how long this ratio will remain below 1.5x. DHC is currently unable to incur additional debt because this ratio is below 1.5x on a pro forma basis, but is not required to repay outstanding debt as a result of failure to comply with this requirement. DHC is currently fully drawn under its revolving credit facility and could also be required to repay its outstanding debt as a result of non-compliance with certain other requirements of its credit agreement or the agreements governing its public debt. DHC may therefore experience future liquidity constraints, as it is currently unable to incur additional debt under its credit agreement or otherwise for failure to comply with the requirements of its credit agreement or the agreements governing its public debt, and DHC will be limited to its cash on hand or be forced to raise additional sources of capital or take other measures to repay its debt or maintain adequate liquidity, and - DHC may not be successful in redeveloping the senior living community formerly managed by Five Star and recently closed, and any redevelopment DHC may pursue may not achieve anticipated results.
The information contained in DHC's filings with the
A
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220223006235/en/
(617) 796-8234
www.dhcreit.com
Source:
FAQ
What were the financial results of Diversified Healthcare Trust for Q4 2021?
How much cash did Diversified Healthcare Trust raise from joint ventures?
What is the occupancy rate of Diversified Healthcare Trust's Office Portfolio?
What were the cash basis NOI trends for DHC's SHOP segment?