10-QPeriod: Q3 FY2010

WELLTOWER INC. Quarterly Report for Q3 Ended Sep 30, 2010

Filed November 8, 2010For Securities:WELL

Summary

Health Care REIT, Inc. (WELL) reported its financial results for the quarter and nine months ended September 30, 2010. The company, an equity real estate investment trust (REIT) focused on senior housing and health care real estate, demonstrated robust growth in its portfolio and revenues compared to the prior year period. Significant investment activity, including acquisitions and development projects, contributed to the expansion of its real estate assets. Despite a challenging economic environment, WELL maintained a strong financial position with increased total assets and a well-managed debt structure. The company's strategic focus on the growing healthcare sector, driven by demographic trends, positions it favorably for future growth. Investors should note the company's consistent dividend payments and its proactive management of capital resources.

Financial Highlights

30 data points
Beta

Revenue

$168.94M

Net Income

$94K

0.1% Net Margin

EPS (Diluted)

$-0.04

Total Assets

$7.89B

Cash & Equivalents

$181.15M

Free Cash Flow

$97.10M

Financial Statements
Beta
Revenue$168.94M
SG&A Expenses$11.63M
Operating Expenses$183.10M
Interest Expense$42.94M
Net Income$94K
EPS (Basic)$-0.04
EPS (Diluted)$-0.04
Shares Outstanding (Basic)125.30M
Shares Outstanding (Diluted)125.30M

Key Highlights

  • 1Total assets increased to $7.89 billion as of September 30, 2010, up from $6.37 billion at December 31, 2009, reflecting significant portfolio growth.
  • 2Rental income for the nine months ended September 30, 2010, increased to $441.3 million, a substantial rise from $379.3 million in the same period last year, indicating strong operational performance.
  • 3The company made significant real estate acquisitions totaling $1.04 billion for the nine months ended September 30, 2010, compared to no new acquisitions in the prior year period, showcasing aggressive expansion.
  • 4Cash provided from operating activities remained strong at $291 million for the nine months ended September 30, 2010, largely consistent with the prior year's $290.4 million.
  • 5The company executed several key financing transactions in 2010, including issuing convertible senior unsecured notes and new senior unsecured notes, strengthening its capital structure.
  • 6The Merrill Gardens partnership, a significant RIDEA transaction, was completed, adding 38 senior housing and care communities to its portfolio.
  • 7Net income attributable to common stockholders saw a significant decrease to $1.12 million for the three months ended September 30, 2010, compared to $19.13 million in the prior year, largely due to a substantial increase in expenses, including transaction costs and interest expense.

Frequently Asked Questions

The company has significantly expanded its real estate portfolio. For the nine months ended September 30, 2010, real property acquisitions totaled $1.04 billion, a substantial increase from zero in the same period of 2009. This growth is also reflected in the increase of total assets from $6.37 billion to $7.89 billion.

As of September 30, 2010, the company had total liabilities of $3.67 billion and total equity of $4.22 billion, resulting in a debt-to-book capitalization ratio of 45%. The company also maintained a healthy cash position with $181.1 million in cash and cash equivalents and had $1.15 billion in available borrowing capacity under its unsecured line of credit.

Net income attributable to common stockholders decreased significantly to $1.12 million for the three months ended September 30, 2010, compared to $19.13 million in the same period of 2009. This decrease was primarily driven by increased expenses, including transaction costs related to acquisitions and a rise in interest expenses.

The company is closely monitoring the PPACA and its potential impact. While some provisions may increase coverage and benefit operators, others, such as reductions in market basket adjustments and productivity adjustments for certain facility types, could negatively affect reimbursement rates for operators and tenants, potentially impacting the company's revenues. The company is evaluating these and other reform changes.