10-QPeriod: Q3 FY2021

WELLTOWER INC. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 5, 2021For Securities:WELL

Summary

For the nine months ended September 30, 2021, Welltower Inc. reported total revenues of $3.43 billion, a slight decrease from $3.48 billion in the same period of 2020. Net income attributable to common stockholders was $277.5 million, significantly down from $815.1 million in the prior year. This decline is largely due to a substantial decrease in gains on real estate dispositions, which fell from $903 million to $224 million year-over-year. Despite the lower net income, the company's operational performance, as indicated by Funds From Operations (FFO), remained robust, increasing to $881.7 million from $876.7 million. The company's balance sheet shows total assets of $33.48 billion as of September 30, 2021, up from $32.48 billion at the end of 2020. This increase is primarily driven by growth in real estate investments and real estate loans receivable. Total liabilities remained relatively stable at $15.31 billion. Welltower actively managed its capital structure, issuing new senior unsecured notes and repaying existing debt, while also expanding its unsecured credit facility. The Seniors Housing Operating segment saw a revenue increase driven by acquisitions and recovering occupancy rates post-COVID-19, though it incurred property operating expenses related to pandemic safety measures. The Triple-net segment experienced strong growth in rental and interest income, partially offset by reserves for straight-line rent receivables. The Outpatient Medical segment showed a decrease in rental income due to dispositions in the prior year but maintained strong rent collection. Overall, the company is navigating the post-pandemic landscape by focusing on strategic investments and capital management.

Financial Highlights

41 data points
Beta

Revenue

$1.24B

41.2% Gross Margin

Net Income

$179.66M

14.5% Net Margin

EPS (Diluted)

$0.42

Total Assets

$33.48B

Cash & Equivalents

$303.98M

Free Cash Flow

$353.08M

Financial Statements
Beta
Revenue$1.24B
Cost of Revenue$729.40M
Gross Profit$510.40M
SG&A Expenses$32.26M
Operating Expenses$1.15B
Interest Expense$122.52M
Net Income$179.66M
EPS (Basic)$0.42
EPS (Diluted)$0.42
Shares Outstanding (Basic)428.03M
Shares Outstanding (Diluted)429.98M

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2021, were $3.43 billion, a slight decrease from $3.48 billion in the prior year.
  • 2Net income attributable to common stockholders decreased to $277.5 million from $815.1 million, largely due to lower gains on real estate dispositions.
  • 3Funds From Operations (FFO) remained strong, increasing to $881.7 million from $876.7 million for the nine-month period.
  • 4Total assets grew to $33.48 billion as of September 30, 2021, driven by investments in real estate and loans receivable.
  • 5The company executed significant capital transactions, including issuing new debt, repaying existing debt, and expanding its credit facility.
  • 6Occupancy rates in the Seniors Housing Operating segment showed recovery, with spot occupancy reaching 76.7% by September 30, 2021.
  • 7Despite pandemic-related operating expenses, Seniors Housing Operating segment revenue increased due to acquisitions and recovering occupancy.

Frequently Asked Questions

For the nine months ended September 30, 2021, Welltower reported total revenues of $3.43 billion, a slight decrease from the prior year. While net income attributable to common stockholders significantly decreased to $277.5 million from $815.1 million, primarily due to lower gains on real estate dispositions, the company's operational performance remained strong, with Funds From Operations (FFO) increasing to $881.7 million.

The COVID-19 pandemic continued to impact Welltower's operations. In the Seniors Housing Operating segment, while occupancy rates showed recovery, reaching 76.7% by September 30, 2021, the company incurred increased property operating expenses related to safety measures. Despite these costs, revenues in this segment grew due to acquisitions and recovering occupancy. The company also benefited from Provider Relief Funds which offset some pandemic-related costs.

Welltower actively managed its capital structure during the nine months ended September 30, 2021. Key activities included the issuance of approximately $1.25 billion in senior unsecured notes, repayment of approximately $1.53 billion in senior unsecured notes and $860 million of term loan debt, and closing on a new $4.7 billion unsecured credit facility. The company also utilized its at-the-market (ATM) program to issue common stock.

The Seniors Housing Operating segment saw revenue growth due to acquisitions and recovering occupancy. The Triple-net segment reported increased rental and interest income. The Outpatient Medical segment experienced a decrease in rental income due to prior year dispositions but maintained strong rent collection. Consolidated Net Operating Income (NOI) for the nine months was $1.44 billion, a slight decrease from $1.51 billion in the prior year, with the Triple-net segment showing strong NOI growth.