10-KPeriod: FY2011

WELLTOWER INC. Annual Report, Year Ended Dec 31, 2011

Filed February 17, 2012For Securities:WELL

Summary

Health Care REIT, Inc. (WELL) reported strong growth in its 2011 fiscal year, driven by significant investments across its seniors housing and healthcare real estate portfolio. The company's total investments reached $14.3 billion, with key growth areas including seniors housing triple-net properties and medical office buildings. The company's strategy focuses on protecting stockholder capital and enhancing value through consistent cash dividends and portfolio expansion, leveraging its diversified property types and customer base. Despite a challenging economic environment, WELL's strategic acquisitions and capital programs positioned it favorably for continued growth in the health care real estate sector, benefiting from favorable demographic trends. The company's robust financial performance was underscored by substantial increases in revenues and a strategic focus on expanding its seniors housing operating segment through RIDEA partnerships. Management highlighted its proactive asset management and capital allocation strategies as key drivers of success, aiming to mitigate risks and optimize returns. WELL's access to capital through public offerings and credit facilities was instrumental in funding its aggressive investment strategy, further solidifying its market position as a leading healthcare REIT.

Financial Highlights

36 data points
Beta

Revenue

$1.31B

Net Income

$217.61M

16.6% Net Margin

EPS (Diluted)

$0.90

Total Assets

$14.92B

Cash & Equivalents

$163.48M

Free Cash Flow

$588.22M

Financial Statements
Beta
Revenue$1.31B
SG&A Expenses$77.20M
Operating Expenses$1.20B
Interest Expense$290.98M
Net Income$217.61M
EPS (Basic)$0.90
EPS (Diluted)$0.90
Shares Outstanding (Basic)173.74M
Shares Outstanding (Diluted)174.40M

Key Highlights

  • 1Total investments reached $14.3 billion as of December 31, 2011, with a diversified portfolio spanning seniors housing and healthcare real estate.
  • 2Seniors housing triple-net properties represented 28.1% of total investments, followed by skilled nursing/post-acute facilities (24.6%) and medical office buildings (19.0%).
  • 3The company completed significant investments in 2011, including the acquisition of Genesis HealthCare properties and expansion of seniors housing operating partnerships.
  • 4Revenues increased substantially, driven by rental income and growth in the seniors housing operating segment, with a total of $1.42 billion reported for the year.
  • 5The company successfully raised significant capital through public offerings of common and preferred stock and senior unsecured notes, enhancing its liquidity and funding capacity.
  • 6Health Care REIT maintained a strong focus on stockholder returns, increasing its quarterly cash dividend to $0.74 per share.
  • 7The company demonstrated robust stockholder return performance, outperforming the S&P 500 and FTSE NAREIT Equity Index over a five-year period.

Frequently Asked Questions

Health Care REIT, Inc. presented a financially healthy picture in its 2011 10-K, characterized by significant portfolio growth and strategic investments in seniors housing and healthcare real estate. The company's strategy is focused on protecting stockholder capital and enhancing value through consistent dividends and portfolio expansion, capitalizing on favorable demographic trends in the healthcare sector. Despite economic headwinds, their proactive asset management, strong capital access, and diversification across property types and customers position them for continued success.

Revenue growth in 2011 was primarily driven by an increase in rental income, particularly from the seniors housing triple-net segment, which benefited from new property acquisitions and rent escalations. Additionally, the expansion of the seniors housing operating segment through RIDEA partnerships contributed significantly to the revenue uplift. The company also benefited from interest income on its real estate loans receivable.

In 2011, Health Care REIT actively managed its capital and liquidity by raising substantial capital through multiple public offerings of common stock, preferred stock, and senior unsecured notes. They also extended and expanded their unsecured line of credit, increasing their borrowing capacity. These actions provided the necessary liquidity to fund their significant investment activities, including acquisitions and development projects, while also supporting dividend payments to stockholders.

Key risks and uncertainties highlighted include dependence on operators' financial health and ability to meet rent and loan obligations, potential impacts of government regulations on reimbursement rates (Medicare and Medicaid), increased competition affecting operators, and risks associated with obligor bankruptcies or insolvencies. Other risks include regulatory approval delays for facility transfers, environmental liabilities, the illiquidity of real estate investments, and the potential failure to qualify or remain qualified as a REIT, which would have significant tax consequences.