10-KPeriod: FY2022

WELLTOWER INC. Annual Report, Year Ended Dec 31, 2022

Filed February 21, 2023For Securities:WELL

Summary

Welltower Inc. (WELL) reported strong performance in its 2022 10-K filing, demonstrating resilience and strategic execution across its diversified healthcare real estate portfolio. The company's primary focus remains on driving stockholder value through consistent cash dividends and portfolio growth, primarily in seniors housing and health care real estate across the U.S., Canada, and the U.K. Despite macroeconomic headwinds, Welltower maintained a robust balance sheet, bolstered by strategic capital raises and effective asset management. The company's business strategy is centered on investing with leading operators and health systems to support innovative care delivery models and enhance the overall healthcare experience. The report highlights the company's commitment to environmental, social, and governance (ESG) principles, evidenced by improved ESG ratings and recognized sustainability initiatives. Key financial performance indicators, such as Net Operating Income (NOI) and Funds From Operations (FFO), showed positive trends, reflecting the strength of its Seniors Housing Operating, Triple-net, and Outpatient Medical segments. The company also addressed operational impacts from the COVID-19 pandemic, noting recovery in occupancy rates and managed elevated operating costs. Welltower's disciplined approach to investment and capital allocation positions it for continued growth and value creation in the evolving healthcare real estate landscape.

Financial Highlights

42 data points
Beta

Revenue

$5.86B

39.3% Gross Margin

Net Income

$141.21M

2.4% Net Margin

EPS (Diluted)

$0.30

Total Assets

$37.89B

Cash & Equivalents

$631.68M

Free Cash Flow

$1.33B

Financial Statements
Beta
Revenue$5.86B
Cost of Revenue$3.56B
Gross Profit$2.30B
SG&A Expenses$150.39M
Operating Expenses$5.69B
Interest Expense$529.52M
Net Income$141.21M
EPS (Basic)$0.31
EPS (Diluted)$0.30
Shares Outstanding (Basic)462.19M
Shares Outstanding (Diluted)465.16M

Key Highlights

  • 1Welltower Inc. (WELL) reported strong financial performance in 2022, with consolidated NOI of $2.3 billion and FFO attributable to common stockholders of $1.48 billion.
  • 2The company maintains a diversified portfolio across Seniors Housing Operating (41% of NOI), Triple-net (38% of NOI), and Outpatient Medical (20.5% of NOI) segments, with significant presence in major U.S. markets, Canada, and the U.K.
  • 3Welltower announced its intent to complete an UPREIT reorganization, which was executed in April 2022, with New Welltower (now Welltower Inc.) becoming the parent entity.
  • 4The company generated $3.7 billion in gross proceeds from equity issuances under its ATM Program, demonstrating strong access to capital markets.
  • 5Welltower reported a net debt to market capitalization ratio of 29.5%, indicating a healthy leverage position.
  • 6The company highlighted its commitment to ESG, achieving an MSCI ESG rating of AAA and receiving recognition for sustainability initiatives.
  • 7Occupancy rates in the Seniors Housing Operating segment saw improvement, with average occupancy reaching 78.3% in Q4 2022, up from 76.3% in Q4 2021.

Frequently Asked Questions

Welltower operates across three primary segments: Seniors Housing Operating, Triple-net, and Outpatient Medical. For the year ended December 31, 2022, Seniors Housing Operating contributed the largest portion of NOI at 41.2%, followed by Triple-net at 38.3%, and Outpatient Medical at 20.5%. This diversification provides stability and multiple avenues for growth.

Welltower maintained a strong capital structure, with a net debt to market capitalization ratio of 29.5%. The company successfully raised approximately $3.7 billion in gross proceeds from equity issuances under its ATM program, enhancing its liquidity. Additionally, Welltower generated significant cash flow from operations, exceeding its dividend distributions, and ended the year with approximately $4.7 billion in available liquidity, including cash and borrowing capacity.

Welltower's strategy is to invest with leading seniors housing operators, post-acute providers, and health systems to fund the real estate and infrastructure needed for innovative care delivery models. The company aims to protect stockholder capital and enhance stockholder value by paying consistent cash dividends and growing its portfolio. It achieves this through strategic acquisitions, developments, and joint venture partnerships, while maintaining a diversified investment portfolio by property type, relationship, and geographic location.

Welltower experienced increased operational costs related to health and safety measures, including higher labor and sanitation expenses, which are expected to remain elevated. However, the company noted a recovery in occupancy rates for its Seniors Housing Operating portfolio, with nearly all communities open for new admissions and allowing visitors by the end of 2022. Welltower also received government grants under the CARES Act and similar programs to offset pandemic-related expenses and lost revenue.