10-QPeriod: Q2 FY2011

WELLTOWER INC. Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 9, 2011For Securities:WELL

Summary

Health Care REIT, Inc. (WELL) reported its second quarter and first half 2011 results, showcasing significant growth driven by strategic acquisitions. Total assets surged to $13.48 billion as of June 30, 2011, a substantial increase from $9.45 billion at the end of 2010, largely due to the transformative acquisition of Genesis HealthCare Corporation's real estate assets, alongside new partnerships with Silverado and Benchmark. Revenue generation also saw a significant uptick, with total revenues reaching $381 million for the quarter and $634 million for the six-month period, driven by robust rental income and resident fees. Net income attributable to common stockholders grew by 53% year-over-year for the quarter to $69.8 million, and by 30% for the six months to $93.2 million. The company's strategic focus on expanding its senior housing and medical facilities portfolio appears to be paying off, positioning it well to capitalize on long-term demographic trends favoring healthcare real estate.

Financial Highlights

35 data points
Beta

Revenue

$369.60M

Net Income

$87.20M

23.6% Net Margin

EPS (Diluted)

$0.39

Total Assets

$13.48B

Cash & Equivalents

$328.76M

Free Cash Flow

$127.81M

Financial Statements
Beta
Revenue$369.60M
SG&A Expenses$19.56M
Operating Expenses$322.01M
Interest Expense$81.48M
Net Income$87.20M
EPS (Basic)$0.40
EPS (Diluted)$0.39
Shares Outstanding (Basic)176.44M
Shares Outstanding (Diluted)177.49M

Key Highlights

  • 1Significant portfolio expansion through major acquisitions, including Genesis HealthCare Corporation, bolstering total assets to $13.48 billion.
  • 2Substantial revenue growth, with Q2 revenues at $381 million and YTD revenues at $634 million, driven by strong rental income and resident fees.
  • 3Robust increase in net income attributable to common stockholders, up 53% quarterly and 30% year-to-date, signaling improved profitability.
  • 4Strategic capital raises in Q1 2011 totaling $3.53 billion in equity and unsecured debt funded aggressive investment activities.
  • 5Expansion and extension of the unsecured revolving credit facility to $2 billion in July 2011, enhancing financial flexibility.
  • 6Strong operational performance indicated by a payment coverage ratio of 2.05x for triple-net customers, demonstrating resilience in rent collection.
  • 7The company continues to meet its debt covenant obligations, maintaining financial stability despite a dynamic economic environment.

Frequently Asked Questions

The primary driver of asset growth was the substantial acquisition of substantially all of the real estate assets of Genesis HealthCare Corporation on April 1, 2011, which included 147 properties. Additionally, the formation of partnerships with Silverado Senior Living and Benchmark Senior Living contributed to the expansion of the company's portfolio and asset base.

Health Care REIT demonstrated strong revenue growth. For the three months ended June 30, 2011, total revenues were $381.1 million, a significant increase from $153.7 million in the same period of 2010. For the six months ended June 30, 2011, total revenues were $634.0 million, up from $296.8 million in the prior year. This growth was primarily fueled by rental income and resident fees and services.

The company believes the healthcare real estate market is poised for significant growth, driven by favorable demographic trends, specifically the increasing elderly population. They anticipate continued demand for health care services and facilities, positioning the company to benefit from these long-term trends. They also note that the healthcare property market may be less susceptible to economic downturns compared to other real estate sectors.

Health Care REIT actively manages its debt and liquidity. They raised substantial capital through equity and debt offerings in the first quarter of 2011. In July 2011, they expanded and extended their unsecured revolving credit facility to $2 billion, increasing financial flexibility. The company reported compliance with all debt covenants as of June 30, 2011, and maintains a healthy cash position.