SNH Announces Financial Results For The Quarter And Year Ended December 31, 2003

Cautionary Language

The information appearing on DHC ’s website includes statements which constitute forward looking statements. These forward looking statements are based upon DHC ’s present intents, beliefs or expectations, but forward looking statements are not guaranteed to occur and may not occur. DHC ’s actual results may differ materially from those contained in DHC ’s forward looking statements. The information contained in DHC ’s filings with the Securities and Exchange Commission, including under “Risk Factors" and “Warnings Concerning Forward Looking Statements” in DHC ’s periodic reports and other filings, identifies important factors that could cause DHC ’s actual results to differ materially from those stated in DHC ’s forward looking statements. DHC ’s filings with the SEC are available on the SEC’s website at www.sec.gov and are also accessible on DHC ’s website at the following link: SEC Filings. You should not place undue reliance upon forward looking statements.

The documents provided in this archived section are provided for historical purposes only. The information contained in each document is accurate only as of the date each document was originally issued or such earlier date stated in those documents. Diversified Healthcare Trust does not undertake any obligation to update any information contained in these documents. For current information about the company, please refer to our most recent public SEC Filings.

Cautionary Statement Regarding Forward Looking Statements

The information appearing on Diversified Healthcare Trust’s (“DHC”) website contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever DHC uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, it 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 as a result of various factors. For example: (a) Office Properties Income Trust (“OPI”) and DHC have entered into a definitive merger agreement and the proposed merger is expected to close in the third quarter of 2023. However, the closing of the proposed merger is subject to the satisfaction or waiver of closing conditions, including DHC shareholder approval and the financing or any consents or approvals required or contemplated in connection with the proposed merger, some of which are beyond DHC’s control, and DHC cannot be sure that any or all of these conditions will be satisfied or waived. Accordingly, the proposed merger may not close on the contemplated terms or at all or it may be delayed; (b) DHC shareholders are expected to benefit from an annual dividend of $1.00 per share of the combined company. However, the Board of Trustees of the combined company will consider many factors when setting distribution rates, and thus future distribution rates may be increased or decreased and DHC cannot be sure as to the rate at which future distributions will be paid; (c) the transactions contemplated by the merger agreement and the terms thereof were evaluated, negotiated and recommended to DHC’s Board of Trustees by a special committee of DHC’s Board of Trustees, comprised solely of DHC’s disinterested, Independent Trustees, and were separately approved by DHC’s Independent Trustees and by DHC’s Board of Trustees. Despite this process, DHC could be subject to claims challenging the proposed merger or other transactions or DHC’s entry into the merger and related agreements because of the multiple relationships among DHC, OPI and The RMR Group LLC (“RMR”) and their related persons and entities or other reasons, and defending even meritless claims could be expensive and distracting to management; and (d) DHC’s website contains statements regarding the expectations for proposed merger and the combined company which may imply that the combined company will achieve its expected strategic and financial goals and the shareholders will benefit from the growth potential of the combined company. However, the combined company will be subject to various risks, including: the risk that the combined businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated; the risk that cost savings and synergies anticipated to be realized by the merger may not be fully realized or may take longer to realize than expected; risks related to future opportunities, plans and strategy for the combined company, including the uncertainty of expected future financial performance, expected access to cash flows and capital, timing of accretion, distribution rates and results of the combined company following completion of the proposed merger and the challenges facing the industries in which each company currently operates and the combined company will, following the closing of the transaction, operate; risks related to the market value of the OPI common shares of beneficial interest to be issued in the proposed merger; risks associated with indebtedness incurred in connection with the proposed merger, including the potential inability to access, or reduced access to, the capital markets or other capital resources or increased cost of borrowings, including as a result of a credit rating downgrade; risks associated with the level of capital expenditures of each company and the combined company following the proposed merger; and risks associated with the impact of general economic, political and market factors on the combined company. As a result, the combined company may not achieve the long-term growth and value creation for shareholder as expected.

The information contained in DHC's periodic reports filed with the Securities and Exchange Commission (the “SEC”), including under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or incorporated therein, also 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 and are also accessible on DHC ’s website at the following link: SEC Filings.

You should not place undue reliance upon any 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.

The documents provided in this section are provided for historical purposes only. The information contained in each document is accurate only as of the date each document was originally issued or such earlier date stated in those documents. DHC does not undertake any obligation to update any information contained in these documents. For current information about DHC, please refer to DHC’s most recent public SEC Filings.

IMPORTANT ADDITIONAL INFORMATION ABOUT THE MERGER

The information appearing on DHC ’s website may be deemed to be solicitation material in respect of the proposed merger between DHC and OPI. In connection with the proposed merger, OPI filed a registration statement on Form S-4 with the SEC containing a joint proxy statement/prospectus of DHC and OPI. On July 21, 2023, the registration statement was declared effective by the SEC and DHC and OPI each filed with the SEC and commenced mailing to their respective shareholders the definitive joint proxy statement/prospectus. The proposed transaction involving DHC and OPI will be submitted to DHC’s and OPI’s shareholders for their consideration at special meetings of shareholders to be held on August 30, 2023. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT DHC, OPI AND THE MERGER. Investors are also able to obtain copies of the registration statement and the joint proxy statement/prospectus and other relevant documents (when they become available) free of charge at the SEC’s website (www.sec.gov). Additional copies of documents filed by DHC with the SEC may be obtained for free on DHC’s Investor Relations website at www.dhcreit.com/investors or by contacting the DHC Investor Relations department at 1-617-796-8234. In addition to the registration statement and the joint proxy statement/prospectus, DHC files annual, quarterly and current reports and other information with the SEC. DHC’s filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at www.sec.gov.

NO OFFER OR SOLICITATION

The information appearing on DHC ’s website is for informational purposes only and is not intended to and does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, any securities or a solicitation of any vote or approval in any jurisdiction with respect to the merger or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

PARTICIPANTS IN THE SOLICITATION

DHC and certain of its trustees and executive officers, OPI and certain of its trustees and executive officers, and RMR, the manager of DHC and OPI, and its parent and certain of their respective directors, officers and employees may be deemed to be participants in the solicitation of proxies from DHC’s and OPI’s shareholders in connection with the merger. Certain information regarding these trustees, executive officers, directors, officers and employees and a description of their direct and indirect interests are set forth in the registration statement and the joint proxy statement/prospectus filed with the SEC by DHC and/or OPI. Information about DHC’s trustees and executive officers is also included in the proxy statement for DHC’s 2023 annual meeting of shareholders, which was filed with the SEC on April 20, 2023. Information about OPI’s trustees and executive officers is included in the proxy statement for OPI’s 2023 annual meeting of shareholders, which was filed with the SEC on April 6, 2023. Copies of the foregoing documents may be obtained as provided above.

SNH Announces Financial Results For The Quarter And Year Ended December 31, 2003

NEWTON, Mass.--(BUSINESS WIRE)--Feb. 10, 2004: Senior Housing Properties Trust (NYSE: SNH) today announced its financial results for the quarter and year ended December 31, 2003, as follows (in thousands, except per share data):

                                 Quarter Ended         Year Ended
                                  December 31,        December 31,
                                2003       2002      2003      2002

Total revenues                  $35,855   $32,835  $131,148  $122,297
Net income                       13,565    14,826    45,874    50,184
Funds from operations (FFO)      20,520    20,232    82,762    78,264
Weighted average shares
 outstanding                     58,453    58,437    58,445    56,416
Per share data:
Net income                        $0.23     $0.25     $0.78     $0.89
Funds from operations (FFO)        0.35      0.35      1.42      1.39

Senior Housing Properties Trust is a real estate investment trust headquartered in Newton, MA that owns 150 senior living properties located in 31 states.

(1) One of our leases which began in January 2002 provided that a percentage of revenues at the leased properties be paid to us as additional rent, which was escrowed for future capital expenditures at the leased facilities. This lease was amended October 1, 2002. As a result of this amendment, amounts for capital expenditures are not paid to us, but are deposited into accounts owned by the tenant, Five Star Quality Care, Inc., and we have security and remainder interests in these accounts and in property purchased with funding from these accounts. Accordingly, we no longer record FF&E reserve income.

(2) Includes expenses incurred with respect to litigation with Marriott International, Inc. and with HEALTHSOUTH Corporation aggregating $446,000 ($0.01 per share) during the three months ended December 31, 2003 and $1.2 million ($0.02 per share) during the year ended December 31, 2003. As previously announced, our litigation with Marriott was settled on January 7, 2004. As part of the settlement, Marriott paid to us $1.25 million, which we will recognize as income in the first quarter of 2004.

                    Senior Housing Properties Trust
                              Other Data
          (in thousands, except per share and ratio amounts)


Calculation of Funds From Operations (FFO)(1):

                                      Quarter Ended       Year Ended
                                       December 31,      December 31,
                                      2003     2002     2003     2002

Income from continuing operations  $13,565  $14,164  $47,034  $52,013
Add:   Depreciation expense          9,171    8,381   35,728   31,596
       Deferred percentage rent(2)  (2,216)  (2,313)      --       --
Less:  FF&E reserve income              --       --       --    5,345
FFO                                $20,520  $20,232  $82,762  $78,264

Weighted average shares outstanding 58,453   58,437   58,445   56,416

FFO per share                        $0.35    $0.35    $1.42    $1.39
Distributions declared               $0.31    $0.31    $1.24    $1.24

Leverage Ratios(3):

                                          At                At
                                  December 31, 2003  December 31, 2002

Total debt / Total assets               40.5%              30.9%
Total debt / Real estate
 properties before depreciation         37.2%              28.9%
Total debt / Total book
 capitalization                         41.1%              31.4%
Secured debt / Total debt                6.0%               9.1%
Secured debt / Total assets              2.4%               2.8%
Variable rate debt / Total debt         21.1%              25.2%

Coverage Ratios(3):

                                   Quarter Ended        Year Ended
                                    December 31,        December 31,
                                   2003     2002      2003      2002
Income from continuing
 operations                      $13,565  $14,164   $47,034   $52,013
Deferred percentage rent          (2,216)  (2,313)        -         -
Interest expense                   9,538    6,971    35,088    27,399
Trust preferred distributions        702      702     2,811     2,811
Depreciation expense               9,171    8,381    35,728    31,596
EBITDA(4)                        $30,760  $27,905  $120,661  $113,819
EBITDA / Interest expense           3.2x     4.0x      3.4x      4.2x
EBITDA / Interest expense +
 trust preferred distributions      3.0x     3.6x      3.2x      3.8x

(1) We compute FFO as shown in the calculation above. Our calculation of FFO differs from the NAREIT definition of FFO because we include deferred percentage rent as discussed in Note 2 below. Also, in order to facilitate comparison of FFO with historical results, the historical FFO presentation for the year ended December 31, 2002, eliminates FF&E reserve income (see Note 1 on page 2). We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical costs, such as depreciation expense and gain or losses on sale of properties, FFO can facilitate comparison of current operating performance among REITs. FFO does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our board of trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving bank credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of our future performance.

(2) We recognize percentage rental income received during the first, second and third quarters in the fourth quarter. Although recognition of revenue is deferred until the fourth quarter for purposes of calculating net income, the calculation of FFO for the first three quarters includes estimated amounts with respect to those periods. The fourth quarter calculation excludes the amounts recognized during the first three quarters.

(3) On January 23, 2004, we issued 5 million common shares in a public offering. The net proceeds of $86.5 million were used to repay borrowings outstanding on our unsecured revolving bank credit facility. The leverage and coverage ratios presented do not include the effect of this issuance.

(4) We compute EBITDA as income from continuing operations plus interest expense, distributions on trust preferred securities, depreciation expense and deferred percentage rent. We consider EBITDA to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. EBITDA does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.

                    Senior Housing Properties Trust
                              Other Data

         The following additional data is intended to respond
                    to frequently asked questions.

                        At December 31, 2003
                        (dollars in thousands)

                                      # of       # of
                                   Properties  Units/Beds Investment
Facility Type

Independent living communities(1)         35      10,191    $868,593
Assisted living facilities                48       3,542     260,257
Skilled nursing facilities                65       6,868     245,838
Hospitals                                  2         364      43,553
Total                                    150      20,965  $1,418,241

Tenant/Operator

Five Star/Sunrise (2)                     31       7,491    $619,942
Marriott/Sunrise (2)                      14       4,030     325,473
NewSeasons                                10       1,019      87,656
HEALTHSOUTH                                2         364      43,553
Five Star #2                              13       1,054      83,471
Five Star #1                              53       4,868     147,072
Alterra Healthcare                        18         894      61,079
Genesis HealthCare Corporation             1         156      13,007
5 private companies (combined)             8       1,089      36,988
Total                                    150      20,965  $1,418,241


                                                               % of
                                                   Current    Current
                                                    Annual     Annual
                                          % of       Rent       Rent
                                        Investment  Revenues  Revenues
Facility Type

Independent living communities(1)            61.2%  $82,403      58.2%
Assisted living facilities                   18.4%   29,826      21.1%
Skilled nursing facilities                   17.3%   20,697      14.6%
Hospitals                                     3.1%    8,700       6.1%
Total                                       100.0% $141,626     100.0%

Tenant/Operator

Five Star/Sunrise (2)                        43.6%  $63,674      45.0%
Marriott/Sunrise (2)                         22.9%   30,975      21.8%
NewSeasons                                    6.2%    9,287       6.6%
HEALTHSOUTH                                   3.1%    8,700       6.1%
Five Star #2                                  5.9%    8,235       5.8%
Five Star #1                                 10.4%    7,646       5.4%
Alterra Healthcare                            4.3%    7,015       5.0%
Genesis HealthCare Corporation                1.0%    1,509       1.1%
5 private companies (combined)                2.6%    4,585       3.2%
Total                                       100.0% $141,626     100.0%


                      Quarter Ended December 31,

Tenant Operating Statistics (3)
                                         Rent Coverage      Occupancy
                                          2003    2002     2003   2002

Five Star/Sunrise (2)(4)                  1.0x    1.1x      90%    92%
Marriott/Sunrise (2)                      1.4x    1.3x      87%    92%
NewSeasons(5)(6)                          1.2x      NA      80%     NA
HEALTHSOUTH(7)                              NA      NA       NA     NA
Five Star #2(5)                           0.9x    1.0x      88%    85%
Five Star #1                              3.5x    3.1x      90%    91%
Alterra Healthcare(5)                     1.6x    1.4x      85%    92%
Genesis HealthCare Corporation            2.4x    1.8x      96%    97%
5 private companies (combined)            2.5x    2.4x      89%    89%

                              Percentage of Operating Revenue Sources

                             Private Pay     Medicare        Medicaid
                             2003   2002    2003   2002    2003   2002

Five Star/Sunrise (2)(4)      86%    87%     11%     9%      3%     4%
Marriott/Sunrise (2)          83%    83%     12%    13%      5%     4%
NewSeasons(5)(6)             100%     NA      0%     NA      0%     NA
HEALTHSOUTH(7)                 NA     NA      NA     NA      NA     NA
Five Star #2(5)              100%   100%      0%     0%      0%     0%
Five Star #1                  21%    22%     22%    19%     57%    59%
Alterra Healthcare(5)         98%    98%      0%     0%      2%     2%
Genesis HealthCare
 Corporation                  25%    25%     34%    33%     41%    42%
5 private companies
 (combined)                   24%    21%     21%    16%     55%    63%


                       Year Ended December 31,

Tenant Operating Statistics (3)
                                          Rent Coverage     Occupancy
                                           2003   2002     2003   2002

Five Star/Sunrise (2)(4)                  1.0x    1.1x      90%    90%
Marriott/Sunrise (2)                      1.3x    1.4x      87%    89%
NewSeasons(5)(6)                          1.1x      NA      79%     NA
HEALTHSOUTH(7)                              NA      NA       NA     NA
Five Star #2(5)                           1.0x    1.1x      87%    88%
Five Star #1                              2.9x    2.6x      90%    91%
Alterra Healthcare(5)                     1.6x    1.5x      86%    89%
Genesis HealthCare Corporation            1.5x    1.8x      97%    96%
5 private companies (combined)            2.4x    2.1x      87%    88%


                              Percentage of Operating Revenue Sources

                             Private Pay      Medicare       Medicaid
                             2003   2002    2003   2002    2003   2002

Five Star/Sunrise (2)(4)      86%    87%     10%    10%      4%     3%
Marriott/Sunrise (2)          83%    84%     13%    13%      4%     3%
NewSeasons(5)(6)             100%    NA       0%     NA      0%     NA
HEALTHSOUTH(7)                NA     NA       NA     NA      NA     NA
Five Star #2(5)              100%   100%      0%     0%      0%     0%
Five Star #1                  21%    22%     21%    20%     58%    58%
Alterra Healthcare(5)         98%    98%      0%     0%      2%     2%
Genesis HealthCare
 Corporation                  23%    26%     34%    38%     43%    36%
5 private companies
 (combined)                   23%    21%     19%    20%     58%    59%

(1) Properties where the majority of units are independent living apartments are classified as independent living communities.

(2) On March 28, 2003, Marriott International, Inc. sold its senior living division, Marriott Senior Living Services, Inc., or MSLS, to Sunrise Senior Living, Inc., or Sunrise. Effective on that date, Sunrise became the manager of the 31 properties leased to Five Star Quality Care, Inc., or Five Star, and the tenant and manager of the 14 properties leased to MSLS. Marriott International continues to guarantee the lease for the 14 properties.

(3) All tenant operating statistics presented are based upon the operating results provided by our tenants for the indicated periods ending December 31 or the most recent prior period tenant operating results available to us from our tenants. Rent coverage is calculated as operating cash flow from our tenants' facility operations, before subordinated charges and capital expenditure reserves, divided by rent payable to us. We have not independently verified our tenants' operating data.

(4) Rent coverage is after non-subordinated management fees of $4.4 million and $4.4 million and $17.1 million and $17.4 million in the quarter and year ended December 31, 2003 and 2002, respectively.

(5) Includes data for periods prior to our ownership of these properties.

(6) We acquired these properties on December 29, 2003.

(7) In March 2003, HEALTHSOUTH issued a press release stating that its historical financial information should not be relied upon. Because we have reason to doubt the financial information we have from HEALTHSOUTH we do not disclose any lease coverage information for this tenant.

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Cautionary Language

Cautionary Statement Regarding Forward Looking Statements

IMPORTANT ADDITIONAL INFORMATION ABOUT THE MERGER

NO OFFER OR SOLICITATION

PARTICIPANTS IN THE SOLICITATION

SNH Announces Financial Results For The Quarter And Year Ended December 31, 2003