10-QPeriod: Q3 FY2012

WELLTOWER INC. Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 7, 2012For Securities:WELL

Summary

Health Care REIT, Inc. (WELL) reported its third-quarter and nine-month results for the period ending September 30, 2012. The company demonstrated significant growth in its real estate portfolio, marked by substantial acquisitions across its seniors housing triple-net, seniors housing operating, and medical facilities segments. Total assets grew from $14.9 billion at the end of 2011 to $18.3 billion by September 30, 2012, driven by strategic investments. Revenues from rental income and resident fees and services saw a notable increase year-over-year, reflecting the expanded operational base. Financially, the company maintained a strong liquidity position with substantial cash and cash equivalents and available borrowing capacity. The company also successfully raised significant capital through equity and debt issuances to fund its growth initiatives. Despite a slight increase in interest expenses due to increased borrowings, the company's coverage ratios remained healthy, indicating its ability to service its debt obligations. Management expressed confidence in the company's ongoing strategy to capitalize on demographic trends favoring healthcare real estate, particularly within the growing seniors housing sector.

Financial Highlights

34 data points
Beta

Revenue

$461.83M

Net Income

$53.51M

11.6% Net Margin

EPS (Diluted)

$0.16

Total Assets

$18.28B

Cash & Equivalents

$1.38B

Free Cash Flow

$212.43M

Financial Statements
Beta
Revenue$461.83M
SG&A Expenses$23.68M
Operating Expenses$423.75M
Interest Expense$91.92M
Net Income$53.51M
EPS (Basic)$0.17
EPS (Diluted)$0.16
Shares Outstanding (Basic)224.39M
Shares Outstanding (Diluted)226.26M

Key Highlights

  • 1Total assets increased to $18.3 billion as of September 30, 2012, from $14.9 billion at December 31, 2011, driven by significant real estate acquisitions.
  • 2Revenues for the nine months ended September 30, 2012, increased to $1.35 billion from $977 million in the same period of 2011, primarily due to growth in rental income and resident fees.
  • 3The company raised approximately $4.8 billion in gross proceeds through various capital transactions, including equity and debt issuances, to support its investment strategy.
  • 4Net income attributable to common stockholders was $131.3 million for the nine months ended September 30, 2012, compared to $129.8 million for the same period in 2011.
  • 5The company completed the acquisition of 49 seniors housing triple-net properties, 53 seniors housing operating properties, and 22 medical office buildings, one hospital, and one parcel of land during the nine months ended September 30, 2012.
  • 6Debt to book capitalization ratio improved to 41% as of September 30, 2012, from 50% at December 31, 2011, indicating a stronger balance sheet.
  • 7The company announced a pending acquisition of Sunrise Senior Living, Inc. for an estimated purchase price of approximately $1.92 billion, expected to close in early 2013.

Frequently Asked Questions

For the nine months ended September 30, 2012, Health Care REIT, Inc. reported total revenues of $1.35 billion, an increase from $977 million in the prior year period. Net income attributable to common stockholders was $131.3 million, a slight increase from $129.8 million in the same period of 2011. The company also saw a significant increase in total assets to $18.3 billion, reflecting its active acquisition strategy.

Health Care REIT, Inc. actively managed its capital structure, raising approximately $4.8 billion in gross proceeds year-to-date through a combination of common and preferred stock issuances, senior unsecured notes, and a Canadian denominated term loan. This capital, along with existing cash and borrowing capacity, funded approximately $2.9 billion in gross new investments.

The primary drivers of revenue growth are rental income and resident fees and services. The substantial increase in these revenue streams for the nine months ended September 30, 2012, compared to the prior year, is directly attributable to the significant number of property acquisitions across its seniors housing and medical facilities segments.

Management believes the healthcare property market is well-positioned to benefit from strong demographic trends, particularly the aging population, which drives demand for seniors housing and healthcare services. They see continued investment opportunities due to this demand, the specialized nature of the industry, and ongoing merger and acquisition activity.

Yes, Health Care REIT, Inc. entered into an Agreement and Plan of Merger in August 2012 to acquire Sunrise Senior Living, Inc. for an estimated purchase price of approximately $1.92 billion, with an expected closing in early 2013. This transaction is subject to customary closing conditions.