10-QPeriod: Q2 FY2004

WELLTOWER INC. Quarterly Report for Q2 Ended Jun 30, 2004

Filed July 23, 2004For Securities:WELL

Summary

Health Care REIT, Inc. (WELL) reported its financial results for the quarter ended June 30, 2004. The company experienced growth in rental and interest income, contributing to an overall increase in net income available to common stockholders. This growth was driven by strategic acquisitions of healthcare facilities, particularly in the assisted living and skilled nursing sectors, which represented the majority of the company's investment portfolio. Despite an increase in total expenses, primarily due to higher interest expenses and depreciation charges stemming from increased borrowings and property investments, the company maintained solid financial health. WELL also highlighted its proactive risk management strategies, including robust operator monitoring and diversified investments, to mitigate potential payment risks. The company continues to focus on enhancing shareholder value through consistent dividend payments and portfolio expansion.

Key Highlights

  • 1Total assets remained stable at approximately $2.19 billion, with real estate investments forming the largest portion.
  • 2Rental income increased by 39% year-over-year to $106.5 million for the six months ended June 30, 2004, indicating strong portfolio performance.
  • 3Net income available to common stockholders grew to $37.9 million for the six months ended June 30, 2004, from $33.2 million in the prior year.
  • 4The company expanded its primary unsecured line of credit from $225 million to $310 million, increasing its financial flexibility.
  • 5WELL completed $161.5 million in new investments and sold $33.8 million in real property during the first six months of 2004.
  • 6The company declared a quarterly dividend of $0.60 per share, marking the 133rd consecutive dividend payment.
  • 7Interest rate swaps were entered into for a notional amount of $100 million to hedge against changes in LIBOR swap rates.

Frequently Asked Questions

Health Care REIT, Inc. is a self-administered equity real estate investment trust (REIT) that invests primarily in health care facilities, with a focus on skilled nursing and assisted living facilities. These long-term care facilities constitute approximately 93% of its investment portfolio.

The company saw a significant increase in rental income, up 39% year-over-year to $106.5 million for the first six months of 2004. Interest income also grew, contributing to a total revenue increase of 36% to $119.4 million for the same period.

Health Care REIT, Inc. employs a multi-faceted approach to risk management. This includes closely monitoring its operators through financial statement reviews and facility inspections, structuring leases and loans with credit enhancements like guarantees and letters of credit, and cross-defaulting and cross-collateralizing loans and leases. Additionally, the company uses interest rate swap agreements to hedge against fluctuations in interest rates.

The company anticipates making additional investments in health care-related facilities, with projected net investments between $400 million and $500 million for the full year 2004. Future investments are expected to be funded through a combination of existing credit facilities, internally generated cash, proceeds from property sales, and public/private offerings of debt and equity securities.