10-QPeriod: Q3 FY2009

WELLTOWER INC. Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 5, 2009For Securities:WELL

Summary

Health Care REIT, Inc. (WELL) reported its third-quarter and nine-month results for the period ending September 30, 2009. The company, a REIT focused on senior housing and health care real estate, navigated a challenging economic environment characterized by limited capital availability and increased costs. For the nine months ended September 30, 2009, net income attributable to common stockholders decreased significantly to $139.5 million from $238.2 million in the prior year. This decline was influenced by a decrease in gains from property sales and an increase in debt extinguishment losses. Despite the decrease in net income, the company demonstrated resilience in its core operations, with Funds From Operations (FFO) showing a slight increase, and Net Operating Income (NOI) growing by 3%. Management highlighted efforts to strengthen liquidity and manage the portfolio effectively amidst economic uncertainty. The company also successfully raised substantial capital through equity offerings and maintained compliance with debt covenants.

Financial Highlights

23 data points
Beta

Revenue

$140.14M

Net Income

$24.68M

17.6% Net Margin

EPS (Diluted)

$0.17

Cash & Equivalents

$102.35M

Free Cash Flow

$106.12M

Financial Statements
Beta
Revenue$140.14M
SG&A Expenses$10.36M
Operating Expenses$115.67M
Interest Expense$27.59M
Net Income$24.68M
EPS (Basic)$0.17
EPS (Diluted)$0.17
Shares Outstanding (Basic)114.87M
Shares Outstanding (Diluted)115.29M

Key Highlights

  • 1Net income attributable to common stockholders decreased by 41% to $139.5 million for the nine months ended September 30, 2009, compared to $238.2 million in the prior year.
  • 2Funds From Operations (FFO) saw a modest increase of 3% to $235.5 million for the nine-month period.
  • 3Net Operating Income (NOI) grew by 3% to $402.0 million for the nine months ended September 30, 2009.
  • 4The company raised approximately $683.9 million in net proceeds from common stock issuances during the first nine months of 2009.
  • 5Total liabilities decreased by approximately $409 million from $2,954.8 million at December 31, 2008, to $2,545.3 million at September 30, 2009.
  • 6The company maintained compliance with all debt covenants as of September 30, 2009.
  • 7Significant debt extinguishment losses were recognized: $24.7 million for the nine months ended September 30, 2009.

Frequently Asked Questions

For the nine months ended September 30, 2009, net income attributable to common stockholders decreased by 41% to $139.5 million from $238.2 million in the same period of 2008. This was largely due to a significant decrease in gains from property sales and an increase in debt extinguishment losses. However, Funds From Operations (FFO) increased slightly by 3% to $235.5 million, and Net Operating Income (NOI) also grew by 3% to $402.0 million, indicating operational stability.

Health Care REIT successfully raised substantial capital through equity offerings. For the nine months ended September 30, 2009, the company generated approximately $683.9 million in net proceeds from common stock issuances, including two public offerings and issuances under its equity shelf plan and dividend reinvestment plan. This capital was utilized for investments and to manage debt.

Total liabilities decreased by approximately $409 million from December 31, 2008, to September 30, 2009, primarily due to a reduction in borrowings under unsecured lines of credit and senior unsecured notes. The company also reported significant debt extinguishment losses of $24.7 million for the nine months ended September 30, 2009, as it actively managed its debt structure. Despite these extinguishments, the company remained in compliance with all debt covenants.

Management acknowledges the challenging economic environment characterized by limited capital availability and increased costs. The company's strategy has focused on liquidity, portfolio management, and selective investments. The demand for healthcare services and related real estate is projected to remain strong due to demographic trends, which provides a degree of resilience. The company believes its diversified portfolio and access to capital position it to navigate current conditions and capitalize on future opportunities.