Recent Highlights
- Reported net income attributable to common stockholders of
$0.14 per diluted share - Reported normalized FFO attributable to common stockholders of
$0.82 per diluted share, exceeding the midpoint of guidance range - Reported normalized FFO growth attributable to common stockholders per diluted share, excluding Provider Relief Funds, of 15% over the prior year
- Seniors Housing Operating ("SHO") portfolio average same store occupancy increased approximately 460 basis points ("bps") year-over-year to 78.0%. Guidance assumed approximately 420 bps of year-over-year occupancy growth
- Reported total portfolio same store NOI ("SSNOI") growth of 8.9%, driven by year-over-year SSNOI growth in our SHO portfolio of 18.4%. Guidance assumed SSNOI growth of 7.0% and 15.0% for the total portfolio and SHO portfolio, respectively
- Achieved same store REVPOR growth of 4.6% within the SHO portfolio during the first quarter as compared to the prior year, which represents an acceleration from 3.4% in the fourth quarter 2021
- Completed
$787 million in acquisitions and loan funding during the first quarter. Year-to-date, completed$1.2 billion of pro rata gross investments exclusive of development funding, representing one of the most active starts to the year for investment activity inWelltower's history - Named to the Bloomberg Gender-Equality Index for the fourth consecutive year in recognition of our ongoing efforts to support gender equality through policy development, representation and transparency
COVID-19 Update
Our share of property-level expenses associated with the COVID-19 pandemic relating to our total SHO portfolio, net of reimbursements including Provider Relief Funds and similar programs in the
Capital Activity and Liquidity Inclusive of available borrowings under our line of credit, cash and cash equivalents, and restricted cash, as of
Effective
Investment and Disposition Activity In the first quarter, we completed
Notable Investment Activity Completed During the Quarter
Outpatient Medical Acquisition We acquired a portfolio of four medical office buildings totaling 510,000 rentable square feet in
Related Companies and Atria Senior Living In 2019, we began a long-term strategic partnership with Related Companies and Atria Senior Living to develop, own and operate modern urban communities catering to seniors living in major metropolitan areas. During the quarter, we delivered Coterie Cathedral Hill at 1001 Van Ness in
Additionally during the quarter, we expanded our partnership with Related and Atria through an agreement to develop the third and fourth locations for the partnership's series of modern urban senior living communities in
Unitranche Loan During the quarter, we closed on a loan for a pro rata investment amount of
Genesis Dispositions We continued to execute on our planned exit of the Genesis relationship; during the quarter, we closed on the sale of seven properties for a gross purchase price of
Other Transactions Additionally during the first quarter, we acquired two seniors housing communities for pro rata investment of
Investment Activity Subsequent to Quarter End
StoryPoint Senior Living As previously announced, we entered into an agreement to expand our relationship with StoryPoint Senior Living, a preeminent senior living operator based in
Treplus Communities Subsequent to quarter end, we expanded our relationship with Treplus Communities through the acquisition of a portfolio of three class-A wellness housing communities in the Midwest. The communities feature unique environments with individual cottage style units, clubhouses, 24/7 concierge services, and offer residents a wellness-oriented social lifestyle.
Dividend On
Outlook for Second Quarter 2022 The degree to which the COVID-19 pandemic continues to impact our operations and those of our operators and tenants, including the variability in the timing of recovery, is dependent on a variety of factors and remains highly uncertain. Accordingly, we are only introducing earnings guidance for the quarter ended
- Same Store NOI: We expect average blended SSNOI growth of 8.0% to 10.0%, which is comprised of the following components:
- Seniors Housing Operating approximately 15.0% to 20.0%
- Seniors Housing Triple-net approximately 7.0% to 8.0%
- Outpatient Medical approximately 2.0% to 3.0%
- Health System approximately 2.75%
- Long-Term/Post-Acute Care approximately 2.0% to 3.0%
- Provider Relief Funds: Our second quarter guidance includes approximately
$6 million of Provider Relief Funds, which are expected to be received during the quarter. - General and Administrative Expenses: We anticipate second quarter general and administrative expenses to be approximately
$35 million to$37 million and stock-based compensation expense to be approximately$6 million . - Investments: Our earnings guidance includes only those acquisitions closed or announced to date. Furthermore, no transitions or restructures beyond those announced to date are included.
- Development: We anticipate funding approximately
$673 million of development in 2022 relating to projects underway onMarch 31, 2022 . - Dispositions: In addition to dispositions and loan payoffs completed in the first quarter, we expect pro rata disposition proceeds and loan payoffs of
$352 million at a blended yield of 6.8% in the next twelve months. This includes approximately$265 million of expected proceeds from properties classified as held-for-sale as ofMarch 31, 2022 and$87 million of expected proceeds from loan repayments.
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 Exhibit 3 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 second quarter outlook and assumptions on the first quarter 2022 conference call.
Conference Call Information We have scheduled a conference call on
Supplemental Reporting Measures We believe that net income and net income attributable to common stockholders ("NICS"), as defined by
Historical cost accounting for real estate assets in accordance with
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. Acquisitions and development conversions are included in the same store amounts five full quarters after acquisition or being placed into service. Land parcels, loans and sub-leases, as well as any properties sold or classified as held for sale during the period, are excluded from the same store amounts. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from the same store amounts until five full quarters post completion of the redevelopment. Properties undergoing operator transitions and/or segment transitions are also excluded from the same store amounts until five full quarters post completion of the operator transition or segment transition. In addition, properties significantly impacted by force majeure, acts of God or other extraordinary adverse events are excluded from same store amounts until five full quarters after the properties are placed back into service. SSNOI excludes non-cash NOI and includes adjustments to present consistent property ownership percentages and to translate Canadian properties and
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
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
|
||||
Financial Exhibits |
||||
Consolidated Balance Sheets (unaudited) |
||||
(in thousands) |
||||
|
||||
2022 |
2021 |
|||
Assets |
||||
Real estate investments: |
||||
Land and land improvements |
$ 4,030,150 |
$ 3,397,055 |
||
Buildings and improvements |
31,724,328 |
27,667,188 |
||
Acquired lease intangibles |
1,844,780 |
1,506,823 |
||
Real property held for sale, net of accumulated depreciation |
199,490 |
564,062 |
||
Construction in progress |
717,657 |
542,302 |
||
Less accumulated depreciation and intangible amortization |
(7,215,622) |
(6,212,432) |
||
Net real property owned |
31,300,783 |
27,464,998 |
||
Right of use assets, net |
404,689 |
454,787 |
||
Real estate loans receivable, net of credit allowance |
1,003,136 |
487,674 |
||
Net real estate investments |
32,708,608 |
28,407,459 |
||
Other assets: |
||||
Investments in unconsolidated entities |
1,138,526 |
1,020,010 |
||
|
68,321 |
68,321 |
||
Cash and cash equivalents |
301,089 |
2,131,846 |
||
Restricted cash |
65,954 |
426,976 |
||
Straight-line rent receivable |
385,639 |
312,721 |
||
Receivables and other assets |
804,316 |
624,918 |
||
Total other assets |
2,763,845 |
4,584,792 |
||
Total assets |
$ 35,472,453 |
$ 32,992,251 |
||
Liabilities and equity |
||||
Liabilities: |
||||
Unsecured credit facility and commercial paper |
$ 299,968 |
$ — |
||
Senior unsecured notes |
12,136,760 |
12,183,710 |
||
Secured debt |
2,104,945 |
2,329,474 |
||
Lease liabilities |
548,999 |
408,916 |
||
Accrued expenses and other liabilities |
1,203,755 |
1,023,219 |
||
Total liabilities |
16,294,427 |
15,945,319 |
||
Redeemable noncontrolling interests |
445,960 |
355,915 |
||
Equity: |
||||
Common stock |
455,376 |
418,866 |
||
Capital in excess of par value |
23,620,112 |
20,814,196 |
||
|
(112,518) |
(106,519) |
||
Cumulative net income |
8,725,661 |
8,399,144 |
||
Cumulative dividends |
(14,654,583) |
(13,598,673) |
||
Accumulated other comprehensive income |
(138,472) |
(128,136) |
||
|
17,895,576 |
15,798,878 |
||
Noncontrolling interests |
836,490 |
892,139 |
||
Total equity |
18,732,066 |
16,691,017 |
||
Total liabilities and equity |
$ 35,472,453 |
$ 32,992,251 |
||
Consolidated Statements of Income (unaudited) |
|||||||
(in thousands, except per share data) |
|||||||
Three Months Ended |
|||||||
|
|||||||
2022 |
2021 |
||||||
Revenues: |
|||||||
Resident fees and services |
$ 994,335 |
$ 723,464 |
|||||
Rental income |
356,390 |
302,843 |
|||||
Interest income |
38,994 |
19,579 |
|||||
Other income |
5,985 |
6,176 |
|||||
Total revenues |
1,395,704 |
1,052,062 |
|||||
Expenses: |
|||||||
Property operating expenses |
853,669 |
617,326 |
|||||
Depreciation and amortization |
304,088 |
244,426 |
|||||
Interest expense |
121,696 |
123,142 |
|||||
General and administrative expenses |
37,706 |
29,926 |
|||||
Loss (gain) on derivatives and financial instruments, net |
2,578 |
1,934 |
|||||
Loss (gain) on extinguishment of debt, net |
(12) |
(4,643) |
|||||
Provision for loan losses, net |
(804) |
1,383 |
|||||
Impairment of assets |
— |
23,568 |
|||||
Other expenses |
26,069 |
10,994 |
|||||
Total expenses |
1,344,990 |
1,048,056 |
|||||
Income (loss) from continuing operations before income taxes and other items |
50,714 |
4,006 |
|||||
Income tax (expense) benefit |
(5,013) |
(3,943) |
|||||
Income (loss) from unconsolidated entities |
(2,884) |
13,049 |
|||||
Gain (loss) on real estate dispositions, net |
22,934 |
59,080 |
|||||
Income (loss) from continuing operations |
65,751 |
72,192 |
|||||
Net income (loss) |
65,751 |
72,192 |
|||||
Less: |
Net income (loss) attributable to noncontrolling interests (1) |
3,826 |
646 |
||||
Net income (loss) attributable to common stockholders |
$ 61,925 |
$ 71,546 |
|||||
Average number of common shares outstanding: |
|||||||
Basic |
447,379 |
417,241 |
|||||
Diluted |
449,802 |
419,079 |
|||||
Net income (loss) attributable to common stockholders per share: |
|||||||
Basic |
$ 0.14 |
$ 0.17 |
|||||
Diluted(2) |
$ 0.14 |
$ 0.17 |
|||||
Common dividends per share |
$ 0.61 |
$ 0.61 |
|||||
(1) Includes amounts attributable to redeemable noncontrolling interests. |
|||||||
(2) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. |
FFO Reconciliations |
Exhibit 1 |
|||||||||
(in thousands, except per share data) |
Three Months Ended |
|||||||||
|
||||||||||
2022 |
2021 |
% growth |
||||||||
Net income (loss) attributable to common stockholders |
$ 61,925 |
$ 71,546 |
||||||||
Depreciation and amortization |
304,088 |
244,426 |
||||||||
Impairments and losses (gains) on real estate dispositions, net |
(22,934) |
(35,512) |
||||||||
Noncontrolling interests(1) |
(14,753) |
(12,516) |
||||||||
Unconsolidated entities(2) |
19,309 |
19,223 |
||||||||
NAREIT FFO attributable to common stockholders |
347,635 |
287,167 |
||||||||
Normalizing items, net(3) |
20,647 |
46,745 |
||||||||
Normalized FFO attributable to common stockholders |
$ 368,282 |
$ 333,912 |
||||||||
Provider Relief Funds received |
(601) |
(35,682) |
||||||||
Provider Relief Funds attributable to noncontrolling interests and unconsolidated entities, net |
19 |
(141) |
||||||||
Normalized FFO attributable to common stockholders, excluding Provider Relief Funds |
$ 367,700 |
$ 298,089 |
||||||||
Average diluted common shares outstanding |
449,802 |
419,079 |
||||||||
Per diluted share data attributable to common stockholders: |
||||||||||
Net income (loss)(4) |
$ 0.14 |
$ 0.17 |
||||||||
NAREIT FFO |
$ 0.77 |
$ 0.69 |
||||||||
Normalized FFO |
$ 0.82 |
$ 0.80 |
||||||||
Normalized FFO, excluding Provider Relief Funds |
$ 0.82 |
$ 0.71 |
15% |
|||||||
Normalized FFO Payout Ratio: |
||||||||||
Dividends per common share |
$ 0.61 |
$ 0.61 |
||||||||
Normalized FFO attributable to common stockholders per share |
$ 0.82 |
$ 0.80 |
||||||||
Normalized FFO payout ratio |
74% |
76% |
||||||||
Other items:(5) |
||||||||||
Net straight-line rent and above/below market rent amortization(6) |
$ (20,014) |
$ (18,134) |
||||||||
Non-cash interest expenses |
4,721 |
3,635 |
||||||||
Recurring cap-ex, tenant improvements, and lease commissions |
(32,466) |
(11,433) |
||||||||
Stock-based compensation(7) |
7,441 |
5,381 |
||||||||
(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) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. |
||||||||||
(5) Amounts presented net of noncontrolling interests' share and including |
||||||||||
(6) Excludes normalized other impairment (see Exhibit 2). |
||||||||||
(7) Excludes certain severance related stock-based compensation recorded in other expense (see Exhibit 2). |
Normalizing Items |
Exhibit 2 |
|||||
(in thousands, except per share data) |
Three Months Ended |
|||||
|
||||||
2022 |
2021 |
|||||
Loss (gain) on derivatives and financial instruments, net |
$ 2,578 |
(1) |
$ 1,934 |
|||
Loss (gain) on extinguishment of debt, net |
(12) |
(2) |
(4,643) |
|||
Provision for loan losses, net |
(804) |
(3) |
1,383 |
|||
Other impairment |
— |
49,241 |
||||
Other expenses |
26,069 |
(4) |
10,994 |
|||
Leasehold interest adjustment |
(8,457) |
(5) |
— |
|||
Casualty losses, net of recoveries |
13 |
(6) |
— |
|||
Normalizing items attributable to noncontrolling interests and unconsolidated entities, net |
1,260 |
(7) |
(12,164) |
|||
Net normalizing items |
$ 20,647 |
$ 46,745 |
||||
Average diluted common shares outstanding |
449,802 |
419,079 |
||||
Net normalizing items per diluted share |
$ 0.05 |
$ 0.11 |
||||
(1) Primarily related to mark-to-market of the equity warrants received as part of the Safanad/ |
||||||
(2) Primarily related to the extinguishment of secured debt. |
||||||
(3) Primarily related to reserves for loan losses under the current expected credit losses accounting standard. |
||||||
(4) Primarily related to non-capitalizable transaction costs, including an accrual for non-capitalizable promotes, legal fees and accrued litigation settlements. |
||||||
(5) Represents |
||||||
(6) Primarily relates to casualty losses net of any insurance recoveries. |
||||||
(7) Represents our share of net normalizing adjustments from unconsolidated entities, less noncontrolling interests' share of net normalizing adjustments. |
Outlook Reconciliation: Quarter Ending |
Exhibit 3 |
||||||
(in millions, except per share data) |
Current Outlook |
||||||
Low |
High |
||||||
FFO Reconciliation: |
|||||||
Net income attributable to common stockholders |
$ 94 |
$ 117 |
|||||
Depreciation and amortization(1) |
323 |
323 |
|||||
NAREIT FFO attributable to common stockholders |
417 |
440 |
|||||
Normalizing items, net(1,2) |
(39) |
(39) |
|||||
Normalized FFO attributable to common stockholders |
$ 378 |
$ 401 |
|||||
Diluted per share data attributable to common stockholders: |
|||||||
Net income |
$ 0.20 |
$ 0.25 |
|||||
NAREIT FFO |
$ 0.90 |
$ 0.95 |
|||||
Normalized FFO |
$ 0.82 |
$ 0.87 |
|||||
Other items:(1) |
|||||||
Net straight-line rent and above/below market rent amortization |
$ (25) |
$ (25) |
|||||
Non-cash interest expenses |
5 |
5 |
|||||
Recurring cap-ex, tenant improvements, and lease commissions |
(39) |
(39) |
|||||
Stock-based compensation |
6 |
6 |
|||||
(1) Amounts presented net of noncontrolling interests' share and |
|||||||
(2) Primarily relates to the NHI lease termination in April. |
SSNOI Reconciliation |
Exhibit 4 |
|||||||
(in thousands) |
Three Months Ended |
|||||||
|
|
% growth |
||||||
Net income (loss) |
$ 65,751 |
$ 72,192 |
||||||
Loss (gain) on real estate dispositions, net |
(22,934) |
(59,080) |
||||||
Loss (income) from unconsolidated entities |
2,884 |
(13,049) |
||||||
Income tax expense (benefit) |
5,013 |
3,943 |
||||||
Other expenses |
26,069 |
10,994 |
||||||
Impairment of assets |
— |
23,568 |
||||||
Provision for loan losses |
(804) |
1,383 |
||||||
Loss (gain) on extinguishment of debt, net |
(12) |
(4,643) |
||||||
Loss (gain) on derivatives and financial instruments, net |
2,578 |
1,934 |
||||||
General and administrative expenses |
37,706 |
29,926 |
||||||
Depreciation and amortization |
304,088 |
244,426 |
||||||
Interest expense |
121,696 |
123,142 |
||||||
Consolidated NOI |
542,035 |
434,736 |
||||||
NOI attributable to unconsolidated investments(1) |
20,142 |
21,516 |
||||||
NOI attributable to noncontrolling interests(2) |
(34,999) |
(20,827) |
||||||
Pro rata NOI |
527,178 |
435,425 |
||||||
Non-cash NOI attributable to same store properties |
(13,526) |
(13,662) |
||||||
NOI attributable to non-same store properties |
(123,498) |
(33,467) |
||||||
Currency and ownership adjustments(3) |
1,074 |
668 |
||||||
Normalizing adjustments, net(4) |
(2,303) |
(31,685) |
||||||
Same Store NOI (SSNOI) |
$ 388,925 |
$ 357,279 |
8.9% |
|||||
Seniors Housing Operating |
142,019 |
119,923 |
18.4% |
|||||
Seniors Housing Triple-net |
82,902 |
77,531 |
6.9% |
|||||
Outpatient Medical |
102,631 |
99,885 |
2.7% |
|||||
Health System |
39,069 |
38,023 |
2.8% |
|||||
Long-Term/Post-Acute Care |
22,304 |
21,917 |
1.8% |
|||||
Total SSNOI |
$ 388,925 |
$ 357,279 |
8.9% |
|||||
Notes: |
(1) Represents Welltower's interests in joint ventures where |
|||||||
(2) Represents minority partners' interests in joint ventures where |
||||||||
(3) Includes adjustments to reflect consistent property ownership percentages and foreign currency exchange rates for properties in the |
||||||||
(4) Includes other adjustments described in the accompanying Supplement. |
Reconciliation of SHO SS REVPOR Growth |
Exhibit 5 |
||||||||
(in thousands except SS REVPOR) |
Three Months Ended |
Three Months Ended |
|||||||
|
|
||||||||
2022 |
2021 |
2021 |
2020 |
||||||
Consolidated SHO revenues |
$ 996,612 |
$ 726,402 |
$ 904,780 |
$ 715,020 |
|||||
Unconsolidated SHO revenues attributable to WELL(1) |
49,108 |
43,214 |
47,836 |
43,175 |
|||||
SHO revenues attributable to noncontrolling interests(2) |
(75,741) |
(58,529) |
(75,052) |
(55,155) |
|||||
SHO pro rata revenues(3) |
969,979 |
711,087 |
877,564 |
703,040 |
|||||
Non-cash revenues on same store properties |
(562) |
(849) |
(562) |
(851) |
|||||
Revenues attributable to non-same store properties |
(289,029) |
(98,717) |
(240,544) |
(102,016) |
|||||
Currency and ownership adjustments(4) |
(394) |
(68) |
514 |
3,801 |
|||||
Normalizing adjustment for government grants(5) |
— |
— |
(4,406) |
— |
|||||
Other normalizing adjustments(6) |
— |
— |
(383) |
(549) |
|||||
SHO SS revenues(7) |
$ 679,994 |
$ 611,453 |
$ 632,183 |
$ 603,425 |
|||||
Average occupied units/month(8) |
40,908 |
38,479 |
38,686 |
38,190 |
|||||
SHO SS REVPOR(9) |
$ 5,618 |
$ 5,370 |
$ 5,403 |
$ 5,224 |
|||||
SS REVPOR YOY growth |
4.6% |
3.4% |
|||||||
(1) Represents Welltower's interests in joint ventures where |
|||||||||
(2) Represents minority partners' interests in joint ventures where |
|||||||||
(3) Represents SHO revenues at |
|||||||||
(4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.2739 and to translate |
|||||||||
(5) Represents normalizing adjustment related to amounts recognized related to the Health and |
|||||||||
(6) Represents aggregate normalizing adjustments which are individually less than .50% of SSNOI growth. |
|||||||||
(7) Represents SS SHO revenues at |
|||||||||
(8) Represents average occupied units for SS properties on a pro rata basis. |
|||||||||
(9) Represents pro rata SS average revenues generated per occupied room per month. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/welltower-reports-first-quarter-2022-results-301544407.html
SOURCE
For more information contact: Tim McHugh (419) 247-2800