Document

The recovery of our SHOP segment continues to progress, with average occupancy increasing 110 basis points from the second quarter. However, SHOP results were negatively impacted in part by the effects of Hurricane Ian, which increased operating expenses by over $4.1 million during the quarter, and by cost increases related to labor, utilities and food. Despite these setbacks, we are seeing strengthening demand for senior living and expect continued occupancy and rate growth in our SHOP segment, leading to future stabilization. With over $800 million of cash at quarter-end and no significant debt maturities until 2024, we believe that we have sufficient liquidity to execute on our business plan and position the company for long-term, sustainable growth."

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 September 30, 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 September 30, 2022, June 30, 2022 and September 30, 2021, as applicable, also appear later in this press release.

•Same property Cash Basis NOI decreased compared to the third quarter of 2021 primarily resulting from increases in operating expenses due to cost increases related to labor, utilities, food and sales and marketing, and the impact of Hurricane Ian at certain of DHC’s senior living communities located in Florida. These increases in operating expenses were partially offset by higher rates and occupancy.

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 third 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, November 10, 2022. To access the replay, dial (412) 317-0088. The replay pass code is 2402366.

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 third quarter conference call are strictly prohibited without the prior written consent of DHC.

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 September 30, 2022, DHC’s approximately $7.0 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 September 30, 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.

DHC presents certain "non-GAAP financial measures" within the meaning of applicable rules of the Securities and Exchange Commission, or 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 and nine months ended September 30, 2022 and 2021, as well as certain of these measures for the three quarters prior to the quarter ended September 30, 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 condensed 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

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.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Rental income	$	63,960	$	101,403	$	191,767	$	306,555
Residents fees and services	258,960		236,013		754,914		739,926
Total revenues	322,920		337,416		946,681		1,046,481

Expenses:
Property operating expenses	289,096		266,073		823,904		818,096
Depreciation and amortization	60,407		68,702		175,927		202,743
General and administrative	6,179		8,870		20,671		25,538
Acquisition and certain other transaction related costs	289		3,108		1,826		15,179
Impairment of assets	—		—		—		(174)
Total expenses	355,971		346,753		1,022,328		1,061,382

(Loss) gain on sale of properties	(5,044)		200		322,064		30,838
Losses on equity securities, net	(2,674)		(14,755)		(21,384)		(26,943)
Interest and other income (1)	4,099		976		6,760		19,849
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $1,908, $3,948, $6,698 and $9,777, respectively)	(46,936)		(64,493)		(160,042)		(192,241)

Loss on modification or early extinguishment of debt	—		—		(30,043)		(2,410)
(Loss) income from continuing operations before income tax expense and equity in earnings of investees	(83,606)		(87,409)		41,708		(185,808)
Income tax expense	(13)		(595)		(845)		(1,024)
Equity in earnings of investees	2,127		—		8,685		—
Net (loss) income	(81,492)		(88,004)		49,548		(186,832)
Net income attributable to noncontrolling interest	—		(1,339)		—		(4,238)
Net (loss) income attributable to common shareholders	$	(81,492)	$	(89,343)	$	49,548	$	(191,070)

Weighted average common shares outstanding (basic and diluted)	238,344		238,008		238,231		237,905


Per common share amounts (basic and diluted):
Net (loss) income attributable to common shareholders	$	(0.34)	$	(0.38)	$	0.21	$	(0.80)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net (loss) income attributable to common shareholders	$	(81,492)	$	(89,343)	$	49,548	$	(191,070)
Depreciation and amortization	60,407		68,702		175,927		202,743
Loss (gain) on sale of properties	5,044		(200)		(322,064)		(30,838)
Impairment of assets	—		—		—		(174)
Losses on equity securities, net	2,674		14,755		21,384		26,943
FFO adjustments attributable to noncontrolling interest	—		(5,273)		—		(15,821)
Equity in earnings of unconsolidated joint ventures	(2,127)		—		(8,685)		—
Share of FFO from unconsolidated joint ventures	2,137		—		9,516		—
Adjustments to reflect DHC's share of FFO attributable to an equity method investment	(1,639)		(2,440)		(5,037)		(3,409)
FFO attributable to common shareholders	(14,996)		(13,799)		(79,411)		(11,626)


Acquisition and certain other transaction related costs	289		3,108		1,826		15,179


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	540		1,242		1,079		2,626
Normalized FFO attributable to common shareholders	$	(14,167)	$	(9,449)	$	(46,463)	$	8,589

Weighted average common shares outstanding (basic and diluted)	238,344		238,008		238,231		237,905


Per common share data (basic and diluted):
Net (loss) income attributable to common shareholders	$	(0.34)	$	(0.38)	$	0.21	$	(0.80)
FFO attributable to common shareholders	$	(0.06)	$	(0.06)	$	(0.33)	$	(0.05)
Normalized FFO attributable to common shareholders	$	(0.06)	$	(0.04)	$	(0.20)	$	0.04
Distributions declared	$	0.01	$	0.01	$	0.03	$	0.03

(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 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.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Calculation of NOI and Cash Basis NOI:
Revenues:
Rental income	$	63,960	$	101,403	$	191,767	$	306,555
Residents fees and services	258,960		236,013		754,914		739,926
Total revenues	322,920		337,416		946,681		1,046,481
Property operating expenses	(289,096)		(266,073)		(823,904)		(818,096)
NOI	33,824		71,343		122,777		228,385
Non-cash straight line rent adjustments included in rental income	(2,738)		(1,679)		(7,193)		(3,804)
Lease value amortization included in rental income	42		(1,848)		204		(5,563)
Non-cash amortization included in property operating expenses	(199)		(199)		(597)		(597)
Cash Basis NOI	$	30,929	$	67,617	$	115,191	$	218,421

Reconciliation of Net Income (Loss) Attributable to Common Shareholders to NOI and Cash Basis NOI:
Net (loss) income attributable to common shareholders	$	(81,492)	$	(89,343)	$	49,548	$	(191,070)
Net income attributable to noncontrolling interest	—		1,339		—		4,238
Net (loss) income	(81,492)		(88,004)		49,548		(186,832)
Equity in earnings of investees	(2,127)		—		(8,685)		—
Income tax expense	13		595		845		1,024
Loss on modification or early extinguishment of debt	—		—		30,043		2,410

Interest expense	46,936		64,493		160,042		192,241
Interest and other income	(4,099)		(976)		(6,760)		(19,849)
Losses on equity securities, net	2,674		14,755		21,384		26,943
Loss (gain) on sale of properties	5,044		(200)		(322,064)		(30,838)
Impairment of assets	—		—		—		(174)
Acquisition and certain other transaction related costs	289		3,108		1,826		15,179
General and administrative	6,179		8,870		20,671		25,538
Depreciation and amortization	60,407		68,702		175,927		202,743
NOI	33,824		71,343		122,777		228,385

Non-cash straight line rent adjustments included in rental income	(2,738)		(1,679)		(7,193)		(3,804)
Lease value amortization included in rental income	42		(1,848)		204		(5,563)
Non-cash amortization included in property operating expenses	(199)		(199)		(597)		(597)
Cash Basis NOI	$	30,929	$	67,617	$	115,191	$	218,421

(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.


Office Portfolio	For the Three Months Ended
Calculation of NOI and Cash Basis NOI:	9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
Rental income	$	55,254	$	52,610	$	54,997	$	89,950	$	91,520
Property operating expenses	(24,179)		(22,026)		(23,447)		(32,313)		(32,386)
NOI	$	31,075	$	30,584	$	31,550	$	57,637	$	59,134


NOI	$	31,075	$	30,584	$	31,550	$	57,637	$	59,134
Less:
Non-cash straight line rent adjustments included in rental income	2,573		2,532		1,511		1,827		1,800
Lease value amortization included in rental income	(59)		(74)		(122)		1,631		1,830
Non-cash amortization included in property operating expenses	199		199		199		200		199
Cash Basis NOI	$	28,362	$	27,927	$	29,962	$	53,979	$	55,305


Reconciliation of NOI to Same Property NOI:
NOI	$	31,075	$	30,584	$	31,550	$	57,637	$	59,134
Less:
NOI of properties not included in same property results	2,440		2,080		3,334		29,236		31,518
Same Property NOI (2)	$	28,635	$	28,504	$	28,216	$	28,401	$	27,616


Reconciliation of Same Property NOI to Same Property Cash Basis NOI:
Same Property NOI (2)	$	28,635	$	28,504	$	28,216	$	28,401	$	27,616
Less:
Non-cash straight line rent adjustments included in rental income	514		793		1,187		1,230		941
Lease value amortization included in rental income	(59)		(74)		(132)		(144)		(137)
Non-cash amortization included in property operating expenses	209		135		172		98		98
Same Property Cash Basis NOI (2)	$	27,971	$	27,650	$	26,989	$	27,217	$	26,714

(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 3 for a description of why management believes they are appropriate supplemental measures and a description of how management uses these measures.


SHOP	For the Three Months Ended
Calculation of NOI and Cash Basis NOI:	9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
Residents fees and services	$	258,960	$	250,506	$	245,448	$	234,697	$	236,013
Property operating expenses	(264,722)		(244,040)		(245,295)		(241,403)		(233,687)
NOI / Cash Basis NOI	$	(5,762)	$	6,466	$	153	$	(6,706)	$	2,326










Reconciliation of NOI / Cash Basis NOI to Same Property NOI / Same Property Cash Basis NOI:
NOI / Cash Basis NOI	$	(5,762)	$	6,466	$	153	$	(6,706)	$	2,326
Less:
NOI / Cash Basis NOI of properties not included in same property results	(11,130)		(6,412)		(9,332)		(9,545)		(5,000)
Same Property NOI / Same Property Cash Basis NOI (2)	$	5,368	$	12,878	$	9,485	$	2,839	$	7,326


Consolidated	For the Three Months Ended
Calculation of NOI and Cash Basis NOI:	9/30/2022		6/30/2022		3/31/2022		12/31/2021		9/30/2021
Rental income / residents fees and services	$	322,920	$	313,028	$	310,733	$	336,731	$	337,416
Property operating expenses	(289,096)		(266,066)		(268,742)		(273,716)		(266,073)
NOI	$	33,824	$	46,962	$	41,991	$	63,015	$	71,343


NOI	$	33,824	$	46,962	$	41,991	$	63,015	$	71,343
Less:
Non-cash straight line rent adjustments included in rental income	2,738		2,710		1,745		2,042		1,679
Lease value amortization included in rental income	(42)		(57)		(105)		1,648		1,848
Non-cash amortization included in property operating expenses	199		199		199		200		199
Cash Basis NOI	$	30,929	$	44,110	$	40,152	$	59,125	$	67,617


Reconciliation of NOI to Same Property NOI:
NOI	$	33,824	$	46,962	$	41,991	$	63,015	$	71,343
Less:
NOI of properties not included in same property results	(8,690)		(4,527)		(5,802)		19,691		26,518
Same Property NOI (2)	$	42,514	$	51,489	$	47,793	$	43,324	$	44,825


Reconciliation of Same Property NOI to Same Property Cash Basis NOI:
Same Property NOI (2)	$	42,514	$	51,489	$	47,793	$	43,324	$	44,825
Less:
Non-cash straight line rent adjustments included in rental income	679		992		1,400		1,445		820
Lease value amortization included in rental income	(42)		(57)		(115)		(127)		(119)
Non-cash amortization included in property operating expenses	209		135		172		98		98
Same Property Cash Basis NOI (2)	$	41,668	$	50,419	$	46,336	$	41,908	$	44,026


	September 30, 2022		December 31, 2021
Assets
Real estate properties	$	6,596,866	$	6,813,556
Accumulated depreciation	(1,784,935)		(1,737,807)
Total real estate properties, net	4,811,931		5,075,749

Investments in unconsolidated joint ventures	159,476		215,127

Cash and cash equivalents	691,040		634,848
Restricted cash	109,765		382,097
Acquired real estate leases and other intangible assets, net	48,432		48,746
Other assets, net	251,842		266,947
Total assets	$	6,072,486	$	6,623,514

Liabilities and Shareholders' Equity
Revolving credit facility	$	700,000	$	800,000

Senior unsecured notes, net	2,316,493		2,806,811
Secured debt and finance leases, net	40,936		69,713

Accrued interest	32,157		29,845
Assumed real estate lease obligations, net	1,205		2,556
Other liabilities	275,640		252,199
Total liabilities	3,366,431		3,961,124

Total shareholders' equity	2,706,055		2,662,390
Total liabilities and shareholders' equity	$	6,072,486	$	6,623,514

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 statement regarding the strong leasing results and roll up in rents from 2022 third quarter leasing activity in DHC's Office Portfolio segment may imply that future leasing results in DHC's Office Portfolio segment will continue to be positive and that such positive leasing results will improve the financial performance of DHC's Office Portfolio segment. However, DHC's ability to realize positive leasing activity and occupancy depends on various factors, including market conditions and tenants' demands for DHC's Office Portfolio properties, the timing of lease expirations and DHC's ability to successfully compete for tenants, among other factors. As a result, DHC may not realize positive leasing activity or occupancy in future periods,

•Ms. Francis's statement regarding year-over-year and sequential increases in DHC's same property Office Portfolio segment cash basis NOI may imply that DHC will continue to realize these improvements and that its Office Portfolio segment cash basis NOI will increase in future periods. However, DHC may not be able to maintain these or other improvements with respect to its Office Portfolio segment and Office Portfolio segment cash basis NOI may not improve or may decline,

•Ms. Francis's statements regarding the continuing recovery at DHC's SHOP segment, with occupancy growth in DHC's SHOP segment, and expected future occupancy and rate growth due to strengthening demand for senior living and resulting stabilization, may imply that DHC's senior living communities will continue to recover and realize occupancy and rate growth in future sequential quarters from its SHOP segment. However, the projected future demand for senior living may not be realized and DHC's operators may not successfully compete for any such demand that may occur or otherwise. Further, DHC's SHOP segment is subject to various risks, many of which are beyond its control, including the continued impacts of and market reaction in response to the COVID-19 pandemic, high inflation, rising interest rates, geopolitical risks or other economic, market or industry conditions, including a possible recession. As a result, DHC may not realize any such occupancy or rate growth in future periods, and DHC's occupancy and/or rates may decline, and

•Ms. Francis states that DHC has sufficient liquidity to execute on its business plan and position DHC for long-term, sustainable growth; however, if economic conditions worsen, or if DHC and its managers and tenants otherwise fail to profitably operate their businesses or DHC incurs unexpected capital expenditures, DHC may be required to utilize all or a significant portion of its cash and cash equivalents to fund its business and operations. In addition, pursuant to DHC's credit agreement, the borrowing capacity under its revolving credit facility will be reduced to $586.4 million in January 2023 and, as such, DHC will be required to repay $113.6 million under its revolving credit facility by that time. If DHC is unable to refinance or replace its debt as it matures, its liquidity may decline; therefore, DHC may not be able to maintain sufficient liquidity or execute on its business plan and position itself for long-term, sustainable growth, and DHC's financial results and condition may be adversely impacted as a result.

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.


	As of and For the Three Months Ended
	September 30, 2022	June 30, 2022	September 30, 2021
Occupancy
Office Portfolio (period end)	85.9%	88.1%	91.3%
SHOP (average day for period)	74.7%	73.6%	71.3%

Same Property Occupancy
Office Portfolio (period end)	90.2%	91.1%	91.4%
SHOP (average day for period)	75.3%	74.1%	73.4%


	Three Months Ended
	September 30, 2022	June 30, 2022	Change	September 30, 2021	Change
Same Property Cash Basis NOI (dollars in thousands)
Office Portfolio	$27,971	$27,650	1.2%	$26,714	4.7%
SHOP	$5,368	$12,878	(58.3)%	$7,326	(26.7)%

Total Consolidated Same Property Cash Basis NOI	$41,668	$50,419	(17.4)%	$44,026	(5.4)%


	2021						2022
	Oct		Nov		Dec		Jan		Feb		Mar		Apr		May		Jun		Jul		Aug		Sep
SHOP Same Property Average Occupancy	73.9	%	74.2	%	74.1	%	74.4	%	74.1	%	73.8	%	73.9	%	73.9	%	74.4	%	74.8	%	75.2	%	75.8	%
Sequential Occupancy Change			0.3		(0.1)		0.3		(0.3)		(0.3)		0.1		—		0.5		0.4		0.4		0.6


	2021		2022
	Dec		Jan		Feb		Mar		Apr		May		Jun		Jul		Aug		Sep
SHOP Other Operator Managed Communities Average Occupancy	67.4	%	69.8	%	70.0	%	70.9	%	71.9	%	72.1	%	73.2	%	72.5	%	73.1	%	74.2	%
Sequential Occupancy Change			2.4		0.2		0.9		1.0		0.2		1.1		(0.7)		0.6		1.1


			Contact:
			Michael Kodesch, Director, Investor Relations
			(617) 796-8234
			www.dhcreit.com