10-QPeriod: Q3 FY2017

WELLTOWER INC. Quarterly Report for Q3 Ended Sep 30, 2017

Filed November 7, 2017For Securities:WELL

Summary

Welltower Inc. (WELL) reported its third-quarter 2017 financial results, demonstrating resilience in its diversified healthcare real estate portfolio. While total revenues remained relatively stable year-over-year, driven by a significant increase in resident fees and services, rental income experienced a decline. The company successfully managed its expenses, leading to a decrease in net income primarily due to lower gains on property dispositions compared to the prior year's strong performance in that area. Key financial highlights indicate a prudent approach to capital management, with strategic debt reduction and ongoing investments in its core segments: triple-net, seniors housing operating, and outpatient medical properties. Looking ahead, Welltower remains focused on its strategy of investing in leading seniors housing operators, post-acute providers, and health systems. The company's strong liquidity position and access to capital markets provide a solid foundation for continued growth and value creation for shareholders. Investors should note the slight decrease in net income attributable to common stockholders, largely influenced by the comparison to a strong prior year quarter for property dispositions, while recognizing the underlying operational stability and strategic capital allocation.

Financial Highlights

36 data points
Beta

Revenue

$1.09B

Net Income

$89.30M

8.2% Net Margin

EPS (Diluted)

$0.20

Total Assets

$28.18B

Cash & Equivalents

$236.25M

Free Cash Flow

$318.36M

Financial Statements
Beta
Revenue$1.09B
SG&A Expenses$29.91M
Operating Expenses$1.01B
Interest Expense$122.58M
Net Income$89.30M
EPS (Basic)$0.20
EPS (Diluted)$0.20
Shares Outstanding (Basic)369.09M
Shares Outstanding (Diluted)370.74M

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2017, were $3.21 billion, a slight increase from $3.20 billion in the same period of 2016, driven by growth in resident fees and services.
  • 2Net income attributable to common stockholders decreased to $575.1 million for the nine months ended September 30, 2017, from $679.4 million in the prior year, primarily due to lower gains on real estate dispositions.
  • 3Consolidated Net Operating Income (NOI) for the nine months ended September 30, 2017, was $1.68 billion, a decrease of 8% from $1.82 billion in the prior year, reflecting a strategic shift and property dispositions.
  • 4Same Store NOI (SSNOI) showed positive growth, increasing by 1% to $1.37 billion for the nine months ended September 30, 2017, indicating underlying portfolio health.
  • 5The company maintained a strong liquidity position, with $236.2 million in cash and cash equivalents and $2.55 billion in available borrowing capacity under its primary unsecured credit facility as of September 30, 2017.
  • 6Welltower actively managed its capital structure, repaying $1.003 billion of secured debt and redeeming all Series J preferred stock during the nine months ended September 30, 2017.
  • 7The company increased its quarterly cash dividend to $0.87 per common share, marking the 186th consecutive quarterly dividend payment.

Frequently Asked Questions

For the nine months ended September 30, 2017, Welltower reported total revenues of $3.21 billion, a slight increase from the prior year. Net income attributable to common stockholders was $575.1 million, a decrease compared to $679.4 million in the same period of 2016, largely due to lower gains from property dispositions. Consolidated Net Operating Income (NOI) was $1.68 billion, down 8% year-over-year, though Same Store NOI (SSNOI) saw a modest increase of 1%.

Welltower actively managed its capital structure by repaying $1.003 billion of secured debt and redeeming all of its Series J preferred stock during the nine months ended September 30, 2017. The company maintained a strong liquidity position with $236.2 million in cash and cash equivalents and significant availability under its credit facilities.

Welltower operates in three main segments: triple-net, seniors housing operating, and outpatient medical. While rental income in the triple-net segment decreased, driven by property dispositions, the seniors housing operating segment saw an 11% increase in revenues from resident fees and services. The outpatient medical segment also experienced revenue growth. Same Store NOI, which excludes the impact of acquisitions and dispositions, showed positive performance across all segments, indicating underlying operational strength.

Welltower's strategy remains focused on investing in high-growth markets with leading seniors housing operators, post-acute providers, and health systems. The company aims to fund innovative care delivery models and improve health outcomes. With a solid liquidity position and access to capital, Welltower is positioned for continued growth, with a focus on protecting shareholder capital and enhancing shareholder value through consistent cash dividends and portfolio expansion.