10-KPeriod: FY2008

WELLTOWER INC. Annual Report, Year Ended Dec 31, 2008

Filed March 2, 2009For Securities:WELL

Summary

Health Care REIT, Inc. (WELL), operating as Health Care REIT, Inc. at the time, filed its 2008 annual report detailing a robust portfolio of 633 senior housing and health care properties across 39 states. The company's strategy centered on protecting stockholder capital and enhancing value through consistent dividends and portfolio growth, achieved by investing across the senior housing and health care real estate spectrum and diversifying by property type, operator/tenant, and geography. As of December 31, 2008, their total investments amounted to $5.86 billion, with skilled nursing facilities, medical office buildings, and assisted living facilities forming the largest segments of their real estate portfolio. Despite a challenging economic environment marked by the late 2007 and 2008 recession, the company highlighted its focus on liquidity, portfolio management, and selective investment. They successfully raised over $1 billion in capital during 2008 through stock offerings and other means to strengthen their balance sheet. The company's strong dividend history, with an increased quarterly dividend of $0.68 per share, and its inclusion in the S&P 500 index in early 2009, underscore its resilience and strategic positioning within the healthcare real estate sector.

Financial Highlights

25 data points
Beta

Revenue

$504.52M

Net Income

$283.30M

56.2% Net Margin

EPS (Diluted)

$2.76

Cash & Equivalents

$23.37M

Free Cash Flow

$360.68M

Financial Statements
Beta
Revenue$504.52M
SG&A Expenses$47.19M
Operating Expenses$374.63M
Interest Expense$125.28M
Net Income$283.30M
EPS (Basic)$2.77
EPS (Diluted)$2.76
Shares Outstanding (Basic)93.73M
Shares Outstanding (Diluted)94.31M

Key Highlights

  • 1Diversified portfolio of 633 senior housing and health care properties across 39 states as of December 31, 2008.
  • 2Total investments reached $5.86 billion, with skilled nursing facilities (27%), medical office buildings (23.5%), and assisted living facilities (20%) being the largest property types.
  • 3Successfully raised over $1 billion in capital during 2008 to strengthen the balance sheet amidst a challenging economic environment.
  • 4Maintained a consistent dividend policy, increasing the quarterly dividend to $0.68 per share.
  • 5Experienced a significant increase in net income available to common stockholders to $264.9 million in 2008, up from $116.3 million in 2007.
  • 6Included in the S&P 500 Index in early 2009, reflecting its market significance.
  • 7Managed its credit profile, maintaining leverage ratios and coverage ratios indicative of an investment-grade status.

Frequently Asked Questions

Health Care REIT, Inc. (now WELLtower Inc.) is a real estate investment trust (REIT) that invests in senior housing and health care real estate. Their primary objectives are to protect stockholder capital and enhance stockholder value by paying consistent cash dividends and growing them through rental and interest income increases and portfolio growth. They achieve this by diversifying their investments across property types, operators/tenants, and geographic locations within the senior housing and health care sectors.

Despite the economic recession in late 2007 and throughout 2008, the company's management indicated that the healthcare property market is generally less susceptible to economic downturns than other property sectors. The company focused on liquidity, portfolio management, and selective investment, raising significant capital to strengthen its balance sheet. While acknowledging potential impacts on operators/tenants, the company's diversified portfolio and focus on essential services provided a degree of resilience.

For the year ended December 31, 2008, the company reported net income available to common stockholders of $264.9 million, a significant increase from $116.3 million in 2007. Funds from Operations (FFO) were $263.7 million. The company also completed several public offerings of common stock, raising substantial capital, and increased its quarterly dividend to $0.68 per share. The company's total investments in real estate grew to $5.86 billion.

Key risks highlighted include the dependence on the financial health and operational performance of their operators/tenants, the potential impact of changes in government reimbursement policies (Medicare and Medicaid), increased competition within the health care industry, risks associated with potential obligor bankruptcies, and general economic conditions impacting capital markets and tenant ability to meet obligations. Environmental laws and regulatory compliance within the healthcare sector are also noted as potential risks.