10-QPeriod: Q1 FY2016

WELLTOWER INC. Quarterly Report for Q1 Ended Mar 31, 2016

Filed May 5, 2016For Securities:WELL

Summary

Welltower Inc. (WELL) reported its first-quarter 2016 financial results, showing steady operational performance. Total revenues increased by 17.1% year-over-year to $1.05 billion, driven by growth in rental income and resident fees. Net income attributable to common stockholders decreased by 22% to $149.0 million, impacted by higher interest expenses and transaction costs compared to the prior year. However, Funds From Operations (FFO) increased by 13.6% to $391.3 million, indicating a healthy operational cash flow generation. The company continues to strategically invest in its core segments: triple-net, seniors housing operating, and outpatient medical. Acquisitions in the first quarter totaled $202.5 million, primarily in seniors housing and outpatient medical properties. The company also strengthened its balance sheet by issuing $700 million in senior unsecured notes. Management remains focused on shareholder value, increasing its quarterly dividend to $0.86 per share.

Financial Highlights

35 data points
Beta

Revenue

$1.05B

Net Income

$165.47M

15.8% Net Margin

EPS (Diluted)

$0.42

Total Assets

$29.09B

Cash & Equivalents

$355.95M

Free Cash Flow

$380.61M

Financial Statements
Beta
Revenue$1.05B
SG&A Expenses$45.69M
Operating Expenses$879.48M
Interest Expense$132.96M
Net Income$165.47M
EPS (Basic)$0.42
EPS (Diluted)$0.42
Shares Outstanding (Basic)355.08M
Shares Outstanding (Diluted)356.05M

Key Highlights

  • 1Total revenues increased 17.1% year-over-year to $1.05 billion.
  • 2Net income attributable to common stockholders decreased 22% to $149.0 million.
  • 3Funds From Operations (FFO) increased 13.6% year-over-year to $391.3 million.
  • 4Acquisitions for the quarter totaled $202.5 million, with a focus on seniors housing and outpatient medical.
  • 5The company issued $700 million in 4.25% senior unsecured notes due 2026, enhancing liquidity and financial flexibility.
  • 6The quarterly cash dividend was increased to $0.86 per common share, marking the 180th consecutive quarterly dividend.
  • 7Net Operating Income (NOI) from continuing operations increased by 15.4% to $597.4 million, demonstrating property-level performance growth.

Frequently Asked Questions

The primary driver for the 17.1% increase in total revenues to $1.05 billion was growth in rental income and resident fees and services, reflecting the company's expanding portfolio and operational performance.

Net income attributable to common stockholders decreased by 22% to $149.0 million. This was primarily due to higher interest expenses and increased transaction costs compared to the same period in the prior year, as well as a gain on derivatives in the prior year that did not recur.

Welltower Inc. raised $700 million in March 2016 by issuing senior unsecured notes due 2026. As of March 31, 2016, the company had $355.9 million in cash and cash equivalents and $1.8 billion in available borrowing capacity under its primary unsecured credit facility, indicating strong liquidity. The company also reported compliance with all debt covenants.

The company continues to focus on its core segments: triple-net, seniors housing operating, and outpatient medical. During the first quarter of 2016, Welltower completed $202.5 million in acquisitions, with a strategic emphasis on seniors housing operating and outpatient medical properties.