10-QPeriod: Q2 FY2003

WELLTOWER INC. Quarterly Report for Q2 Ended Jun 30, 2003

Filed July 21, 2003For Securities:WELL

Summary

Welltower Inc. (WELL) reported its second-quarter financial results for the period ending June 30, 2003, showcasing significant growth in rental income, which increased by 33% year-over-year for the quarter and 37% for the year-to-date period. This growth was primarily driven by property acquisitions, which have expanded the company's real estate investment portfolio. The company has also been active in capital markets, issuing new senior unsecured notes and preferred stock to fund its growth and refinance existing debt. Despite an increase in interest expenses due to higher average borrowings, Welltower maintained a strong balance sheet with a debt-to-total capitalization ratio of 0.48:1. The company reported solid earnings per diluted share, reflecting its operational performance and effective financial management.

Key Highlights

  • 1Rental income increased by 33% to $42.0 million for the three months ended June 30, 2003, compared to the same period in 2002.
  • 2Net real estate investments grew to $1.67 billion as of June 30, 2003, indicating continued portfolio expansion.
  • 3The company successfully issued $100 million in 8.0% unsecured senior notes in March 2003 and $96.6 million in Series D Preferred Stock in July 2003.
  • 4Borrowings under unsecured lines of credit increased to $156.9 million, supporting operational and investment activities.
  • 5Diluted earnings per share for the six months ended June 30, 2003, were $0.81, up from $0.74 in the prior year period.
  • 6The company announced an amendment and extension of its primary unsecured revolving line of credit, increasing it to $225 million.

Frequently Asked Questions

The primary driver of Welltower's revenue growth is the significant increase in rental income, up 33% year-over-year for the quarter. This growth is attributed to the company's strategic acquisitions of healthcare-related properties.

Welltower is financing its growth and operations through a combination of strategies, including issuing new debt (senior unsecured notes) and equity (preferred stock), utilizing its revolving credit facilities, and internally generated cash flow. They also recently expanded their revolving credit facility.

As of June 30, 2003, Welltower reported a debt-to-total book capitalization ratio of 0.48 to 1.0, indicating a well-managed debt level. The company also has various credit facilities and long-term debt instruments in place.

Yes, the filing mentions potential risks related to tenants filing for bankruptcy protection. Doctors Community Health Care Corporation and Alterra Healthcare Corporation have filed for Chapter 11. While Alterra is current on payments and plans to assume its lease, Doctors has not made an interest payment on a significant loan. Management expects to be repaid in full on the Doctors' loan, as they are considered an oversecured creditor.