Fourth Quarter Highlights
- Reported net income attributable to common stockholders of
$0.55 per diluted share compared to$0.27 per diluted share in 2018 - Reported normalized FFO attributable to common stockholders of
$1.05 per diluted share, compared to$1.01 per diluted share in 2018, representing 4% normalized FFO growth - Grew total portfolio same store NOI by 2.2%, driven by consistent performance across all property types
- Achieved same store REVPOR growth rate of 3.5% within the Seniors Housing Operating segment, led by the
U.K. and U.S. portfolios - Completed over
$1.4 billion of pro rata gross investments comprised of$1.1 billion of high-quality acquisitions at a blended year one yield of 5.3% and expected stabilized yield of 5.6%. Additionally, completed$308 million of development funding with an expected stabilized yield of 7.9% - Successfully closed our first green bond offering of
$500 million of 2.7% senior unsecured notes due 2027, with proceeds to be used to fund renewable energy, water conservation, energy efficiency and green building projects
"
Fourth Quarter Capital Activity On December 31, 2019, we had
Dividend The Board of Directors declared a cash dividend for the quarter ended December 31, 2019 of
Quarterly Investment and Disposition Activity We continue to leverage our extensive industry relationships to drive acquisition volume and recycle non-core real estate into new investments that are accretive to the quality of our operator and real estate portfolios and will drive future cash flow growth. In the fourth quarter, we completed
Notable Fourth Quarter Investments and Development Activity
Oakmont Senior Living As previously announced, we acquired six newly built, Class-A seniors housing communities in
Discovery Senior Living As previously announced, we closed on an expansion of our relationship with Discovery via an off-market acquisition of three recently opened combination seniors housing communities in in-fill locations within the
Notable Pending Transactions
Prominent Seniors Housing Disposition In
Invesco Outpatient Medical Joint Venture As previously announced, we entered into a definitive agreement with
ProMedica Disposition During the fourth quarter, we reached a definitive agreement to sell three skilled nursing facilities with an average age of 49 years, for a gross sale price of
Outpatient Medical Acquisition In
Full Year 2019 Highlights
- Reported net income attributable to common stockholders of
$3.05 per diluted share compared to$2.02 per diluted share in 2018 - Reported normalized FFO attributable to common stockholders of
$4.16 per diluted share, compared to$4.03 per diluted share in 2018, representing 3% normalized FFO growth - Completed
$4.8 billion of pro rata gross investments, including$4.1 billion in acquisitions at a blended year one 5.4% yield and expected stabilized yield of 6.0%. Additionally, we completed$682 million in development funding with a 7.8% expected stabilized yield, property dispositions of$2.7 billion at a blended yield of 6.3% and loan payoffs of$192 million at an average yield of 8.7% - Completed
$2.4 billion in pro rata gross outpatient medical investments at a 5.6% yield and$155 million in development funding with a 6.4% yield - Initiated new relationships with Related/Atria, Balfour Senior Living, Clover Management,
Frontier Management and LCB Senior Living - Grew total portfolio average same store NOI by 2.8%, driven by our best-in-class seniors housing portfolio
- Experienced a capstone year for ESG initiatives with the following significant announcements:
- Named to top quintile of Newsweek's inaugural America's Most Responsible Companies 2020 list
- Named to 2019 Dow Jones Sustainability World Index for second consecutive year
Received GRESB Green Star for sustainability performance for fifth consecutive year
2019 Leadership Team Expansion As previously announced,
Ayesha Menon , Senior Vice President -Strategic Investments Edward Cheung , Senior Vice President - InvestmentsNicholas Rumanes , Vice President - Head of DevelopmentRyan Rothacker , Vice President - Portfolio Management & Operations
Full Year 2019 Newly Formed Seniors Housing Relationships
Related/Atria
Balfour Senior Living We formed a new RIDEA relationship with
Clover Management We formed a new joint venture partnership with
LCB Senior Living We formed a new RIDEA relationship with
Full Year 2019 Notable Disposition Activity
Benchmark Senior Living As previously disclosed, we sold our Benchmark Senior Living portfolio for a gross
Long-Term/Post-Acute Care Dispositions We completed the disposition of 48 properties for
Outlook for 2020 We are introducing our 2020 earnings guidance and expect to report net income attributable to common stockholders in a range of
- Same Store NOI: We expect average blended SSNOI growth of 1.5% to 2.5% which is comprised of the following components:
- Seniors housing operating approximately 1.00% to 2.50%
- Seniors housing triple-net approximately 2.25% to 2.75%
- Outpatient medical approximately 2.25% to 2.75%
- Health system approximately 1.95%
- Long-term/post-acute care approximately 2.0% to 2.5%
- General and administrative expenses: We anticipate annual general and administrative expenses of approximately
$140 million , including$30 million of stock-based compensation. Acquisitions/Joint Ventures : 2020 earnings guidance includes only acquisitions and joint ventures closed or announced year to date of$1.1 billion at a year 1 blended yield of 5.6%.- Development: We anticipate funding approximately
$468 million of development in 2020 relating to projects underway on December 31, 2019. - Dispositions: We expect pro rata disposition proceeds of
$1.7 billion at a blended yield of 5.1% in 2020.
Our guidance does not include any additional investments, dispositions or capital transactions beyond those we have announced, nor any other expenses, impairments, unanticipated additions to the loan loss reserve or other additional normalizing items. Please see the Supplemental Reporting Measures section for further discussion and our definition of normalized FFO and SSNOI and the Exhibits for a reconciliation of the outlook for net income available to common stockholders to normalized FFO attributable to common stockholders. We will provide additional detail regarding our 2020 outlook and assumptions on the fourth quarter 2019 conference call.
Conference Call Information We have scheduled a conference call on Thursday, February 13, 2020 at
Supplemental Reporting Measures We believe that net income and net income attributable to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), are the most appropriate earnings measurements. However, we consider funds from operations (FFO), normalized FFO, REVPOR, same store REVPOR (SS REVPOR), net operating income (NOI) and same store NOI (SSNOI) to be useful supplemental measures of our operating performance. These supplemental measures are disclosed on our pro rata ownership basis. Pro rata amounts are derived by reducing consolidated amounts for minority partners' noncontrolling ownership interests and adding our minority ownership share of unconsolidated amounts. We do not control unconsolidated investments. While we consider pro rata disclosures useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution.
Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the
We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. SSNOI is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Land parcels, loans, and sub-leases as well as any properties acquired, developed/redeveloped (including major refurbishments where 20% or more of units are simultaneously taken out of commission for 30 days or more), sold or classified as held for sale during that period are excluded from the same store amounts. Properties undergoing operator transitions and/or segment transitions (except Seniors Housing Triple-net to Seniors Housing Operating with the same operator) are also excluded from the same store amounts. Normalizers include adjustments that in management's opinion are appropriate in considering SSNOI, a supplemental, non-GAAP performance measure. None of these adjustments, which may increase or decrease SSNOI, are reflected in our financial statements prepared in accordance with U.S. GAAP. Significant normalizers (defined as any that individually exceeds 0.50% of SSNOI growth per property type) are separately disclosed and explained. We believe NOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties. No reconciliation of the forecasted range for SSNOI on a combined basis or by property type is included in this release because we are unable to quantify certain amounts that would be required to be included in the comparable GAAP financial measure without unreasonable efforts, and we believe such reconciliation would imply a degree of precision that could be confusing or misleading to investors.
REVPOR represents the average revenues generated per occupied room per month at our Seniors Housing Operating properties. It is calculated as our pro rata version of total resident fees and services revenues from the income statement divided by average monthly occupied room days. SS REVPOR is used to evaluate the REVPOR performance of our properties under a consistent population which eliminates changes in the composition of our portfolio. It is based on the same pool of properties used for SSNOI and includes any revenue normalizations used for SSNOI. We use REVPOR and SS REVPOR to evaluate the revenue-generating capacity and profit potential of our Seniors Housing Operating portfolio independent of fluctuating occupancy rates. They are also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our Seniors Housing Operating portfolio.
Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and ratings agencies in the valuation, comparison, rating and investment recommendations of companies. Our management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see the exhibits for reconciliations of supplemental reporting measures and the supplemental information package for the quarter ended December 31, 2019, which is available on the Company's website (www.welltower.com), for information and reconciliations of additional supplemental reporting measures.
About
Forward-Looking Statements and Risk Factors This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. When we use words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "pro forma," "estimate" or similar expressions that do not relate solely to historical matters, we are making forward-looking statements. In particular, these forward-looking statements include, but are not limited to, those relating to our opportunities to acquire, develop or sell properties; our ability to close anticipated acquisitions, investments or dispositions on currently anticipated terms, or within currently anticipated timeframes; the expected performance of our operators/tenants and properties; our expected occupancy rates; our ability to declare and to make distributions to shareholders; our investment and financing opportunities and plans; our continued qualification as a REIT; our ability to access capital markets or other sources of funds; and our ability to meet our earnings guidance. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause our actual results to differ materially from our expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost of capital; uncertainty from the expected discontinuance of LIBOR and the transition to any other interest rate benchmark; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators'/tenants' difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; our ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting our properties; our ability to re lease space at similar rates as vacancies occur; our ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting
Welltower Inc. |
||||||||
Consolidated Balance Sheets (unaudited) |
||||||||
(in thousands) |
||||||||
December 31, |
||||||||
2019 |
2018 |
|||||||
Assets |
||||||||
Real estate investments: |
||||||||
Land and land improvements |
$ |
3,486,620 |
$ |
3,205,091 |
||||
Buildings and improvements |
29,163,305 |
28,019,502 |
||||||
Acquired lease intangibles |
1,617,051 |
1,581,159 |
||||||
Real property held for sale, net of accumulated depreciation |
1,253,008 |
590,271 |
||||||
Construction in progress |
507,931 |
194,365 |
||||||
Less accumulated depreciation and intangible amortization |
(5,715,459) |
(5,499,958) |
||||||
Net real property owned |
30,312,456 |
28,090,430 |
||||||
Right of use assets, net |
536,433 |
— |
||||||
Real estate loans receivable, net of allowance |
270,382 |
330,339 |
||||||
Net real estate investments |
31,119,271 |
28,420,769 |
||||||
Other assets: |
||||||||
Investments in unconsolidated entities |
583,423 |
482,914 |
||||||
Goodwill |
68,321 |
68,321 |
||||||
Cash and cash equivalents |
284,917 |
215,376 |
||||||
Restricted cash |
100,849 |
100,753 |
||||||
Straight-line rent receivable |
466,222 |
367,093 |
||||||
Receivables and other assets |
757,748 |
686,846 |
||||||
Total other assets |
2,261,480 |
1,921,303 |
||||||
Total assets |
$ |
33,380,751 |
$ |
30,342,072 |
||||
Liabilities and equity |
||||||||
Liabilities: |
||||||||
Unsecured credit facility and commercial paper |
$ |
1,587,597 |
$ |
1,147,000 |
||||
Senior unsecured notes |
10,336,513 |
9,603,299 |
||||||
Secured debt |
2,990,962 |
2,476,177 |
||||||
Lease liabilities |
473,693 |
70,668 |
||||||
Accrued expenses and other liabilities |
1,009,482 |
1,034,283 |
||||||
Total liabilities |
16,398,247 |
14,331,427 |
||||||
Redeemable noncontrolling interests |
475,877 |
424,046 |
||||||
Equity: |
||||||||
Preferred stock |
— |
718,498 |
||||||
Common stock |
411,005 |
384,465 |
||||||
Capital in excess of par value |
20,190,107 |
18,424,368 |
||||||
Treasury stock |
(78,955) |
(68,499) |
||||||
Cumulative net income |
7,353,966 |
6,121,534 |
||||||
Cumulative dividends |
(12,223,534) |
(10,818,557) |
||||||
Accumulated other comprehensive income |
(112,157) |
(129,769) |
||||||
Other equity |
12 |
294 |
||||||
Total Welltower Inc. stockholders' equity |
15,540,444 |
14,632,334 |
||||||
Noncontrolling interests |
966,183 |
954,265 |
||||||
Total equity |
16,506,627 |
15,586,599 |
||||||
Total liabilities and equity |
$ |
33,380,751 |
$ |
30,342,072 |
Consolidated Statements of Income (unaudited) |
||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||
December 31, |
December 31, |
|||||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||||
Revenues: |
||||||||||||||||||
Resident fees and services |
$ |
831,684 |
$ |
860,402 |
$ |
3,448,175 |
$ |
3,234,852 |
||||||||||
Rental income |
409,583 |
360,565 |
1,588,400 |
1,380,422 |
||||||||||||||
Interest income |
15,718 |
13,082 |
63,830 |
55,814 |
||||||||||||||
Other income |
5,837 |
7,194 |
20,901 |
29,411 |
||||||||||||||
Total revenues |
1,262,822 |
1,241,243 |
5,121,306 |
4,700,499 |
||||||||||||||
Expenses: |
||||||||||||||||||
Property operating expenses |
662,520 |
650,644 |
2,690,042 |
2,433,017 |
||||||||||||||
Depreciation and amortization |
262,644 |
242,834 |
1,027,073 |
950,459 |
||||||||||||||
Interest expense |
131,648 |
144,369 |
555,559 |
526,592 |
||||||||||||||
General and administrative expenses |
26,507 |
31,101 |
126,549 |
126,383 |
||||||||||||||
Loss (gain) on derivatives and financial instruments, net |
(5,069) |
1,626 |
(4,399) |
(4,016) |
||||||||||||||
Loss (gain) on extinguishment of debt, net |
2,612 |
53 |
84,155 |
16,097 |
||||||||||||||
Provision for loan losses |
— |
— |
18,690 |
— |
||||||||||||||
Impairment of assets |
98 |
76,022 |
28,133 |
115,579 |
||||||||||||||
Other expenses |
16,042 |
10,502 |
52,612 |
112,898 |
||||||||||||||
Total expenses |
1,097,002 |
1,157,151 |
4,578,414 |
4,277,009 |
||||||||||||||
Income (loss) from continuing operations before income taxes |
||||||||||||||||||
and other items |
165,820 |
84,092 |
542,892 |
423,490 |
||||||||||||||
Income tax (expense) benefit |
4,832 |
(1,504) |
(2,957) |
(8,674) |
||||||||||||||
Income (loss) from unconsolidated entities |
57,420 |
195 |
42,434 |
(641) |
||||||||||||||
Gain (loss) on real estate dispositions, net |
12,064 |
41,913 |
748,041 |
415,575 |
||||||||||||||
Income (loss) from continuing operations |
240,136 |
124,696 |
1,330,410 |
829,750 |
||||||||||||||
Net income (loss) |
240,136 |
124,696 |
1,330,410 |
829,750 |
||||||||||||||
Less: |
Preferred dividends |
— |
11,676 |
— |
46,704 |
|||||||||||||
Net income (loss) attributable to noncontrolling interests |
15,812 |
11,257 |
97,978 |
24,796 |
||||||||||||||
Net income (loss) attributable to common stockholders |
$ |
224,324 |
$ |
101,763 |
$ |
1,232,432 |
$ |
758,250 |
||||||||||
Average number of common shares outstanding: |
||||||||||||||||||
Basic |
405,974 |
378,240 |
401,845 |
373,620 |
||||||||||||||
Diluted |
407,904 |
380,002 |
403,808 |
375,250 |
||||||||||||||
Net income (loss) attributable to common stockholders per share: |
||||||||||||||||||
Basic |
$ |
0.55 |
$ |
0.27 |
$ |
3.07 |
$ |
2.03 |
||||||||||
Diluted |
$ |
0.55 |
$ |
0.27 |
$ |
3.05 |
$ |
2.02 |
||||||||||
Common dividends per share |
$ |
0.87 |
$ |
0.87 |
$ |
3.48 |
$ |
3.48 |
Outlook reconciliations: Year Ending December 31, 2020 |
Exhibit 1 |
||||||||||
(in millions, except per share data) |
|||||||||||
Current Outlook |
|||||||||||
Low |
High |
||||||||||
FFO Reconciliation: |
|||||||||||
Net income attributable to common stockholders |
$ |
1,229 |
$ |
1,270 |
|||||||
Impairments and losses (gains) on real estate dispositions, net(1,2) |
(545) |
(545) |
|||||||||
Depreciation and amortization(1) |
1,061 |
1,061 |
|||||||||
NAREIT and normalized FFO attributable to common stockholders |
$ |
1,745 |
$ |
1,786 |
|||||||
Per share data attributable to common stockholders: |
|||||||||||
Net income |
$ |
2.96 |
$ |
3.06 |
|||||||
NAREIT and normalized FFO |
$ |
4.20 |
$ |
4.30 |
|||||||
Other items:(1) |
|||||||||||
Net straight-line rent and above/below market rent amortization |
$ |
(92) |
$ |
(92) |
|||||||
Non-cash interest expenses |
11 |
11 |
|||||||||
Recurring cap-ex, tenant improvements, and lease commissions |
(142) |
(142) |
|||||||||
Stock-based compensation |
30 |
30 |
|||||||||
Note : (1) Amounts presented net of noncontrolling interests' share and Welltower's share of unconsolidated entities. |
|||||||||||
(2) Includes estimated gains on projected dispositions. |
Normalizing Items |
Exhibit 2 |
||||||||||||||||||
(in thousands, except per share data) |
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||
December 31, |
December 31, |
||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||||||
Loss (gain) on derivatives and financial instruments, net |
$ |
(5,069) |
(1) |
$ |
1,626 |
$ |
(4,399) |
$ |
(4,016) |
||||||||||
Loss (gain) on extinguishment of debt, net |
2,612 |
(2) |
53 |
84,155 |
16,097 |
||||||||||||||
Provision for loan losses |
— |
— |
18,690 |
— |
|||||||||||||||
Incremental stock-based compensation expense |
— |
— |
— |
3,552 |
|||||||||||||||
Nonrecurring income tax benefits |
(8,681) |
(3) |
— |
(8,681) |
— |
||||||||||||||
Other expenses |
16,042 |
(4) |
10,502 |
52,612 |
112,898 |
||||||||||||||
Additional other income |
— |
(4,027) |
— |
(14,832) |
|||||||||||||||
Normalizing items attributable to noncontrolling interests and |
(54,851) |
(5) |
(338) |
(40,741) |
4,595 |
||||||||||||||
Net normalizing items |
$ |
(49,947) |
$ |
7,816 |
$ |
101,636 |
$ |
118,294 |
|||||||||||
Average diluted common shares outstanding |
407,904 |
380,002 |
403,808 |
375,250 |
|||||||||||||||
Net normalizing items per diluted share |
$ |
(0.12) |
$ |
0.02 |
$ |
0.25 |
$ |
0.32 |
|||||||||||
Note: (1) Primarily related to mark-to-market of Genesis HealthCare stock holdings. |
|||||||||||||||||||
(2) Primarily related to the early redemption of the $300 million Canadian-denominated 3.35% senior unsecured notes due 2020. |
|||||||||||||||||||
(3) Primarily related to the reversal of valuation allowances. |
|||||||||||||||||||
(4) Primarily related to non-capitalizable transaction costs. |
|||||||||||||||||||
(5) Primarily related to gain on sale of unconsolidated management company investment. |
FFO Reconciliations |
Exhibit 3 |
|||||||||||||||||||
(in thousands, except per share data) |
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||
December 31, |
December 31, |
|||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||||||
Net income (loss) attributable to common stockholders |
$ |
224,324 |
$ |
101,763 |
$ |
1,232,432 |
$ |
758,250 |
||||||||||||
Depreciation and amortization |
262,644 |
242,834 |
1,027,073 |
950,459 |
||||||||||||||||
Impairments and losses (gains) on real estate dispositions, net |
(11,966) |
34,109 |
(719,908) |
(299,996) |
||||||||||||||||
Noncontrolling interests(1) |
(14,895) |
(17,650) |
(20,197) |
(69,193) |
||||||||||||||||
Unconsolidated entities(2) |
16,191 |
13,910 |
57,680 |
52,663 |
||||||||||||||||
NAREIT FFO attributable to common stockholders |
476,298 |
374,966 |
1,577,080 |
1,392,183 |
||||||||||||||||
Normalizing items, net(3) |
(49,947) |
7,816 |
101,636 |
118,294 |
||||||||||||||||
Normalized FFO attributable to common stockholders |
$ |
426,351 |
$ |
382,782 |
$ |
1,678,716 |
$ |
1,510,477 |
||||||||||||
Average diluted common shares outstanding |
407,904 |
380,002 |
403,808 |
375,250 |
||||||||||||||||
Per diluted share data attributable to common stockholders: |
||||||||||||||||||||
Net income attributable to common stockholders |
$ |
0.55 |
$ |
0.27 |
$ |
3.05 |
$ |
2.02 |
||||||||||||
NAREIT FFO |
$ |
1.17 |
$ |
0.99 |
$ |
3.91 |
$ |
3.71 |
||||||||||||
Normalized FFO |
$ |
1.05 |
$ |
1.01 |
$ |
4.16 |
$ |
4.03 |
||||||||||||
Normalized FFO Payout Ratio: |
||||||||||||||||||||
Dividends per common share |
$ |
0.87 |
$ |
0.87 |
$ |
3.48 |
$ |
3.48 |
||||||||||||
Normalized FFO attributable to common stockholders per share |
$ |
1.05 |
$ |
1.01 |
$ |
4.16 |
$ |
4.03 |
||||||||||||
Normalized FFO payout ratio |
83 |
% |
86 |
% |
84 |
% |
86 |
% |
||||||||||||
Other items:(4) |
||||||||||||||||||||
Net straight-line rent and above/below market rent amortization |
$ |
(24,584) |
$ |
(23,914) |
$ |
(97,183) |
$ |
(72,854) |
||||||||||||
Non-cash interest expenses |
1,282 |
3,886 |
11,026 |
13,423 |
||||||||||||||||
Recurring cap-ex, tenant improvements, and lease commissions |
(46,550) |
(31,664) |
(131,295) |
(88,408) |
||||||||||||||||
Stock-based compensation(5) |
4,547 |
4,846 |
23,487 |
23,186 |
||||||||||||||||
Note: (1) Represents noncontrolling interests' share of net FFO adjustments. |
||||||||||||||||||||
(2) Represents Welltower's share of net FFO adjustments from unconsolidated entities. |
||||||||||||||||||||
(3) See Exhibit 2. |
||||||||||||||||||||
(4) Amounts presented net of noncontrolling interests' share and Welltower's share of unconsolidated entities. |
||||||||||||||||||||
(5) Excludes certain severance related stock-based compensation recorded in other expense and normalized incremental stock-based compensation expense (see Exhibit 2). |
SSNOI Reconciliations |
Exhibit 4 |
|||||||||||||||||||||||||||||||||
(in thousands) |
Three Months Ended |
|||||||||||||||||||||||||||||||||
March 31, |
June 30, |
September 30, |
December 31, |
|||||||||||||||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
|||||||||||||||||||||||||||
Net income (loss) |
$ |
292,302 |
$ |
453,555 |
$ |
150,040 |
$ |
167,273 |
$ |
647,932 |
$ |
84,226 |
$ |
240,136 |
$ |
124,696 |
||||||||||||||||||
Loss (gain) on real estate dispositions, net |
(167,409) |
(338,184) |
1,682 |
(10,755) |
(570,250) |
(24,723) |
(12,064) |
(41,913) |
||||||||||||||||||||||||||
Loss (income) from unconsolidated entities |
9,199 |
2,429 |
9,049 |
(1,249) |
(3,262) |
(344) |
(57,420) |
(195) |
||||||||||||||||||||||||||
Income tax expense (benefit) |
2,222 |
1,588 |
1,599 |
3,841 |
3,968 |
1,741 |
(4,832) |
1,504 |
||||||||||||||||||||||||||
Other expenses |
8,756 |
3,712 |
21,628 |
10,058 |
6,186 |
88,626 |
16,042 |
10,502 |
||||||||||||||||||||||||||
Impairment of assets |
— |
28,185 |
9,939 |
4,632 |
18,096 |
6,740 |
98 |
76,022 |
||||||||||||||||||||||||||
Provision for loan losses |
18,690 |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Loss (gain) on extinguishment of debt, net |
15,719 |
11,707 |
— |
299 |
65,824 |
4,038 |
2,612 |
53 |
||||||||||||||||||||||||||
Loss (gain) on derivatives and financial instruments, net |
(2,487) |
(7,173) |
1,913 |
(7,460) |
1,244 |
8,991 |
(5,069) |
1,626 |
||||||||||||||||||||||||||
General and administrative expenses |
35,282 |
33,705 |
33,741 |
32,831 |
31,019 |
28,746 |
26,507 |
31,101 |
||||||||||||||||||||||||||
Depreciation and amortization |
243,932 |
228,201 |
248,052 |
236,275 |
272,445 |
243,149 |
262,644 |
242,834 |
||||||||||||||||||||||||||
Interest expense |
145,232 |
122,775 |
141,336 |
121,416 |
137,343 |
138,032 |
131,648 |
144,369 |
||||||||||||||||||||||||||
Consolidated NOI |
601,438 |
540,500 |
618,979 |
557,161 |
610,545 |
579,222 |
600,302 |
590,599 |
||||||||||||||||||||||||||
NOI attributable to unconsolidated investments(1) |
21,827 |
21,620 |
21,518 |
21,725 |
21,957 |
22,247 |
22,031 |
21,933 |
||||||||||||||||||||||||||
NOI attributable to noncontrolling interests(2) |
(41,574) |
(31,283) |
(42,559) |
(30,962) |
(42,356) |
(37,212) |
(41,035) |
(40,341) |
||||||||||||||||||||||||||
Pro rata NOI |
581,691 |
530,837 |
597,938 |
547,924 |
590,146 |
564,257 |
581,298 |
572,191 |
||||||||||||||||||||||||||
Non-cash NOI attributable to same store properties |
(7,912) |
(12,614) |
(8,566) |
(8,459) |
(12,726) |
(9,668) |
(15,764) |
(15,328) |
||||||||||||||||||||||||||
NOI attributable to non-same store properties |
(123,581) |
(96,522) |
(174,240) |
(143,359) |
(158,388) |
(142,266) |
(125,892) |
(128,569) |
||||||||||||||||||||||||||
Currency and ownership(3) |
603 |
(4,206) |
2,100 |
(2,703) |
2,636 |
154 |
832 |
1,748 |
||||||||||||||||||||||||||
Other adjustments(4) |
(7,420) |
12,644 |
488 |
11,855 |
14 |
(1,580) |
(1,878) |
(860) |
||||||||||||||||||||||||||
Same store NOI (SSNOI) |
$ |
443,381 |
$ |
430,139 |
$ |
417,720 |
$ |
405,258 |
$ |
421,682 |
$ |
410,897 |
$ |
438,596 |
$ |
429,182 |
||||||||||||||||||
Seniors housing operating |
$ |
222,141 |
$ |
215,689 |
$ |
202,852 |
$ |
196,333 |
$ |
205,982 |
$ |
200,325 |
$ |
194,101 |
$ |
191,170 |
||||||||||||||||||
Seniors housing triple-net |
88,856 |
85,405 |
88,230 |
85,070 |
90,443 |
87,446 |
91,091 |
88,530 |
||||||||||||||||||||||||||
Outpatient medical |
84,847 |
82,962 |
85,487 |
83,529 |
84,004 |
82,872 |
74,677 |
73,031 |
||||||||||||||||||||||||||
Health System |
— |
— |
— |
— |
— |
— |
35,795 |
35,307 |
||||||||||||||||||||||||||
Long-term/post-acute care |
47,537 |
46,083 |
41,151 |
40,326 |
41,253 |
40,254 |
42,932 |
41,144 |
||||||||||||||||||||||||||
Total SSNOI |
$ |
443,381 |
$ |
430,139 |
$ |
417,720 |
$ |
405,258 |
$ |
421,682 |
$ |
410,897 |
$ |
438,596 |
$ |
429,182 |
||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||
Seniors Housing Operating |
3.0 |
% |
3.3 |
% |
2.8 |
% |
1.5 |
% |
2.7 |
% |
||||||||||||||||||||||||
Seniors Housing Triple-net |
4.0 |
% |
3.7 |
% |
3.4 |
% |
2.9 |
% |
3.5 |
% |
||||||||||||||||||||||||
Outpatient Medical |
2.3 |
% |
2.3 |
% |
1.4 |
% |
2.3 |
% |
2.1 |
% |
||||||||||||||||||||||||
Hospital System |
n/a |
n/a |
n/a |
1.4 |
% |
1.4 |
% |
|||||||||||||||||||||||||||
Long-Term/Post-Acute Care |
3.2 |
% |
2.0 |
% |
2.5 |
% |
4.3 |
% |
3.0 |
% |
||||||||||||||||||||||||
Total SSNOI growth |
3.1 |
% |
3.1 |
% |
2.6 |
% |
2.2 |
% |
2.8 |
% |
||||||||||||||||||||||||
Note : (1) Represents Welltower's interests in joint ventures where Welltower is the minority partner. |
||||||||||||||||||||||||||||||||||
(2) Represents minority partners' interests in joint ventures where Welltower is the majority partner. |
||||||||||||||||||||||||||||||||||
(3) Includes adjustments to reflect consistent property ownership percentages and foreign currency exchange rates for properties in the U.K. and Canada. |
||||||||||||||||||||||||||||||||||
(4) Includes other adjustments as described in the respective Supplements. |
Reconciliation of SHO SS REVPOR Growth |
Exhibit 5 |
|||||||||||||||||||||||||||||||
(dollars in thousands, except SHO SS REVPOR) |
||||||||||||||||||||||||||||||||
United States |
United Kingdom |
Canada |
Total |
|||||||||||||||||||||||||||||
Three Months Ended December 31, |
||||||||||||||||||||||||||||||||
2018 |
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
2019 |
|||||||||||||||||||||||||
Consolidated SHO revenues |
$ |
666,566 |
$ |
635,783 |
$ |
80,470 |
$ |
85,203 |
$ |
114,579 |
$ |
112,472 |
$ |
861,615 |
$ |
833,458 |
||||||||||||||||
Unconsolidated SHO revenues |
23,519 |
22,511 |
— |
— |
20,422 |
21,607 |
43,941 |
44,118 |
||||||||||||||||||||||||
SHO revenues attributable to |
(39,058) |
(40,528) |
(6,568) |
(7,622) |
(25,574) |
(25,023) |
(71,200) |
(73,173) |
||||||||||||||||||||||||
SHO pro rata revenues(3) |
651,027 |
617,766 |
73,902 |
77,581 |
109,427 |
109,056 |
834,356 |
804,403 |
||||||||||||||||||||||||
Non-cash revenues on same store |
(620) |
(659) |
(19) |
— |
— |
— |
(639) |
(659) |
||||||||||||||||||||||||
Revenues attributable to non-same store |
(222,486) |
(168,873) |
(13,278) |
(13,313) |
(4,431) |
(2,759) |
(240,195) |
(184,945) |
||||||||||||||||||||||||
Currency and ownership adjustments(4) |
5,272 |
— |
1,114 |
1,075 |
450 |
322 |
6,836 |
1,397 |
||||||||||||||||||||||||
Other normalizing adjustments(5) |
386 |
(1,800) |
(394) |
4 |
— |
— |
(8) |
(1,796) |
||||||||||||||||||||||||
SHO SS revenues(6) |
$ |
433,579 |
$ |
446,434 |
$ |
61,325 |
$ |
65,347 |
$ |
105,446 |
$ |
106,619 |
$ |
600,350 |
$ |
618,400 |
||||||||||||||||
Avg. occupied units/month(7) |
20,227 |
20,133 |
2,489 |
2,553 |
12,883 |
12,756 |
35,599 |
35,442 |
||||||||||||||||||||||||
SHO SS REVPOR(8) |
$ |
7,087 |
$ |
7,331 |
$ |
8,146 |
$ |
8,462 |
$ |
2,706 |
$ |
2,763 |
$ |
5,576 |
$ |
5,769 |
||||||||||||||||
SS REVPOR YOY growth |
3.4 |
% |
3.9 |
% |
2.1 |
% |
3.5 |
% |
||||||||||||||||||||||||
Note : (1) Represents Welltower's interests in joint ventures where Welltower is the minority partner. |
||||||||||||||||||||||||||||||||
(2) Represents minority partners' interests in joint ventures where Welltower is the majority partner. |
||||||||||||||||||||||||||||||||
(3) Represents SHO revenues at Welltower pro rata ownership. |
||||||||||||||||||||||||||||||||
(4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.32 and to translate UK properties at a GBP/USD rate of 1.31. |
||||||||||||||||||||||||||||||||
(5) Represents aggregate normalizing adjustments which are individually less than .50% of SSNOI growth. |
||||||||||||||||||||||||||||||||
(6) Represents SS SHO revenues at Welltower pro rata ownership. |
||||||||||||||||||||||||||||||||
(7) Represents average occupied units for SS properties on a pro rata basis. |
||||||||||||||||||||||||||||||||
(8) Represents pro rata SS average revenues generated per occupied room per month. |
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SOURCE
Tim McHugh (419) 247-2800