What is the company's primary source of revenue and how is it growing?

The company's primary source of revenue is rental income from its health care and senior housing properties. For the six months ended June 30, 2006, rental income increased by 24% to $146.8 million compared to the same period in 2005, driven by property acquisitions and annual rental escalations.

How has the company managed its debt and liquidity?

The company has managed its debt by issuing new senior unsecured notes and renewing its primary credit facility to $700 million. As of June 30, 2006, it had $15.2 million in cash and cash equivalents and $394 million in available borrowing capacity under its unsecured lines of credit, ensuring adequate liquidity. Total liabilities decreased slightly to $1.52 billion.

What are the key trends in the company's real estate portfolio?

The company's real estate portfolio is diversified across independent living/CCRCs, assisted living, skilled nursing, and specialty care facilities. Skilled nursing facilities and assisted living facilities constitute the largest segments, representing 45% and 33% of investments, respectively. The company continues to invest in new properties, with $177.6 million invested in real property during the first six months of 2006.

How is the company addressing potential risks associated with its operators and investments?

The company employs a robust asset management process to monitor its investments and operators. This includes reviewing financial statements, operator credit, conducting facility inspections, and ensuring covenant compliance. Investments are structured to mitigate payment risk, typically limited to 90% of appraised value and often secured by guarantees or letters of credit.

WELL 10-Q Quarterly Report Q2 FY2006 — Revenue, Net Income, EPS

Summary

Health Care REIT, Inc. (WELL) reported solid financial performance for the six months ended June 30, 2006. The company demonstrated significant year-over-year growth in net income available to common stockholders, reaching $42.3 million, a substantial increase from $16.2 million in the prior year. This growth was primarily driven by a 24% increase in rental income, reflecting successful property acquisitions and annual rent escalations. The company also managed its expenses effectively, with total expenses growing by a more modest 3% despite increased investments and higher interest costs. Financially, WELL strengthened its balance sheet by increasing total stockholders' equity to $1.55 billion. While total liabilities saw a slight decrease, the company strategically managed its debt, issuing new senior unsecured notes and increasing its revolving credit facility to $700 million, providing significant financial flexibility. The company's investment strategy remains robust, with substantial investments in real property and ongoing construction projects, supported by a strong asset management process to mitigate payment risk.

Key Highlights

1Net income available to common stockholders increased significantly to $42.3 million for the six months ended June 30, 2006, up from $16.2 million in the prior year.
2Total revenues grew by 21% year-over-year, primarily driven by a 24% increase in rental income from new acquisitions and contractual escalations.
3Total stockholders' equity increased to $1.55 billion, indicating a stronger equity base.
4The company successfully executed a public offering of common stock, raising approximately $109.8 million in net proceeds.
5WELL expanded its primary credit facility to $700 million, enhancing its financial flexibility and borrowing capacity.
6Investments in real property totaled $177.6 million for the six months ended June 30, 2006, demonstrating continued portfolio growth.
7The company declared its 141st consecutive dividend payment, increasing the quarterly dividend to $0.64 per share.

WELLTOWER INC. Quarterly Report for Q2 Ended Jun 30, 2006

Summary

Key Highlights

Frequently Asked Questions