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Welltower Reports Third Quarter 2024 Results

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Welltower (NYSE:WELL) reported strong Q3 2024 results with net income of $0.73 per diluted share and normalized FFO of $1.11 per share, up 20.7% year-over-year. The company achieved total portfolio same-store NOI growth of 12.6%, driven by 23.0% growth in Seniors Housing Operating portfolio. Key highlights include 8.9% year-over-year same-store revenue growth in SHO portfolio, with 310 basis points occupancy improvement and 4.9% RevPOR growth. During Q3, Welltower completed $2.4 billion in investments and improved net debt to Adjusted EBITDA to 3.73x. The company increased its quarterly dividend by 10% and raised its full-year 2024 normalized FFO guidance to $4.27-$4.33 per share.

Welltower (NYSE:WELL) ha riportato risultati solidi per il terzo trimestre del 2024, con un utile netto di $0,73 per azione diluita e un FFO normalizzato di $1,11 per azione, in aumento del 20,7% rispetto all'anno precedente. L'azienda ha registrato una crescita del NOI totale del portafoglio in stessa sede del 12,6%, trainata da una crescita del 23,0% nel portafoglio Operativo di Housing per Anziani. Tra i punti salienti figurano una crescita del fatturato del 8,9% anno su anno nel portafoglio SHO, con un miglioramento dell'occupazione di 310 punti base e una crescita del RevPOR del 4,9%. Durante il terzo trimestre, Welltower ha completato investimenti per $2,4 miliardi e ha migliorato il rapporto debito netto su EBITDA regolato a 3,73x. L'azienda ha aumentato il suo dividendo trimestrale del 10% e ha rivisto al rialzo le stime per l'FFO normalizzato per l'intero anno 2024, portandole a $4,27-$4,33 per azione.

Welltower (NYSE:WELL) reportó resultados sólidos para el tercer trimestre de 2024, con un ingreso neto de $0.73 por acción diluida y un FFO normalizado de $1.11 por acción, un aumento del 20.7% en comparación con el año anterior. La compañía logró un crecimiento del NOI de portafolio de misma tienda del 12.6%, impulsado por un crecimiento del 23.0% en el portafolio de Viviendas para Ancianos. Los aspectos destacados incluyen un crecimiento del ingreso del 8.9% interanual en el portafolio de SHO, con una mejora en la ocupación de 310 puntos base y un crecimiento del RevPOR del 4.9%. Durante el tercer trimestre, Welltower completó inversiones por $2.4 mil millones y mejoró la relación de deuda neta a EBITDA ajustado a 3.73x. La empresa aumentó su dividendo trimestral en un 10% y elevó su guía de FFO normalizado para todo el año 2024 a $4.27-$4.33 por acción.

웰타워 (NYSE:WELL)는 2024년 3분기 강력한 실적을 발표했으며, 희석 주당 순이익은 $0.73, 정상화된 FFO는 주당 $1.11로 전년 대비 20.7% 증가했습니다. 회사는 동일 매장 NOI 포트폴리오에서 12.6%의 성장을 달성했으며, 이는 노인 주택 운영 포트폴리오에서 23.0%의 성장이 이끌었습니다. 주요 하이라이트로는 SHO 포트폴리오에서 전년 대비 8.9%의 동일 매장 매출 성장률, 310 베이시스 포인트 증가한 점유율, 그리고 4.9%의 RevPOR 성장이 포함됩니다. 3분기 동안 웰타워는 24억 달러의 투자를 완료하고 순 부채를 조정 EBITDA 대비 3.73배로 개선했습니다. 회사는 분기 배당금을 10% 인상했으며 2024년 전체 연도 정상화된 FFO 가이던스를 주당 $4.27-$4.33으로 상향 조정했습니다.

Welltower (NYSE:WELL) a annoncé de solides résultats pour le troisième trimestre 2024, avec un bénéfice net de 0,73 $ par action diluée et un FFO normalisé de 1,11 $ par action, soit une augmentation de 20,7 % par rapport à l'année précédente. L'entreprise a réalisé une croissance du NOI des mêmes magasins du portefeuille total de 12,6 %, soutenue par une croissance de 23,0 % du portefeuille d'Hébergement pour Personnes Âgées. Les points forts incluent une croissance du chiffre d'affaires de 8,9 % d'une année sur l'autre dans le portefeuille SHO, avec une amélioration de l'occupation de 310 points de base et une croissance du RevPOR de 4,9 %. Au cours du troisième trimestre, Welltower a réalisé 2,4 milliards de dollars d'investissements et a amélioré le rapport de la dette nette par rapport à l'EBITDA ajusté à 3,73x. L'entreprise a augmenté son dividende trimestriel de 10 % et a relevé ses prévisions de FFO normalisé pour l'année 2024 à 4,27 $ - 4,33 $ par action.

Welltower (NYSE:WELL) hat im dritten Quartal 2024 starke Ergebnisse gemeldet, mit einem Nettogewinn von $0,73 pro verwässerter Aktie und einem normalisierten FFO von $1,11 pro Aktie, was einem Anstieg von 20,7 % im Jahresvergleich entspricht. Das Unternehmen erzielte ein Wachstum des NOI des gesamten Portfolios in gleichen Geschäften von 12,6 %, angetrieben durch ein Wachstum von 23,0 % im Betrieb von Seniorenwohnanlagen. Zu den wichtigsten Punkten gehören ein Umsatzwachstum von 8,9 % im Jahresvergleich im SHO-Portfolio, eine Verbesserung der Auslastung um 310 Basispunkte und ein Wachstum des RevPOR von 4,9 %. Im dritten Quartal hat Welltower Investitionen in Höhe von 2,4 Milliarden Dollar abgeschlossen und das Verhältnis von Nettoverschuldung zu bereinigtem EBITDA auf 3,73x verbessert. Das Unternehmen hat die vierteljährliche Dividende um 10 % erhöht und die Prognose für den normalisierten FFO für das gesamte Jahr 2024 auf $4,27-$4,33 pro Aktie angehoben.

Positive
  • Normalized FFO increased 20.7% year-over-year to $1.11 per share
  • Strong same-store NOI growth of 12.6%, with SHO portfolio up 23.0%
  • SHO portfolio occupancy improved by 310 basis points year-over-year
  • Completed $2.4 billion in investments during Q3
  • Net debt to Adjusted EBITDA improved to 3.73x from 5.14x year-over-year
  • 10% increase in quarterly dividend
  • Raised full-year FFO guidance to $4.27-$4.33 per share
Negative
  • None.

Insights

Strong Q3 2024 results showcase remarkable performance with normalized FFO of $1.11 per share, up 20.7% YoY. The SHO portfolio delivered exceptional SSNOI growth of 23.0%, driven by occupancy improvements and solid RevPOR growth. Key metrics show robust operational execution:

Balance sheet strength improved significantly with net debt to Adjusted EBITDA dropping to 3.73x from 5.14x YoY. The $5.0B expanded credit facility and successful $1.035B note issuance enhance financial flexibility. Total liquidity of $8.8B provides ample dry powder for growth.

Management's increased 2024 guidance (normalized FFO $4.27-$4.33 per share) and 10% dividend hike reflect strong fundamentals and growth trajectory. The $6.1B YTD acquisition pipeline demonstrates aggressive but disciplined capital deployment.

TOLEDO, Ohio, Oct. 28, 2024 /PRNewswire/ -- Welltower Inc. (NYSE:WELL) today announced results for the quarter ended September 30, 2024.

Recent Highlights

  • Reported net income attributable to common stockholders of $0.73 per diluted share
  • Reported quarterly normalized funds from operations attributable to common stockholders of $1.11 per diluted share, an increase of 20.7% over the prior year
  • Reported total portfolio year-over-year same store NOI ("SSNOI") growth of 12.6%, driven by SSNOI growth in our Seniors Housing Operating ("SHO") portfolio of 23.0%
  • SHO portfolio year-over-year same store revenue increased 8.9% in the third quarter, driven by 310 basis points ("bps") of year-over-year average occupancy growth and Revenue Per Occupied Room ("RevPOR") growth of 4.9%
  • SHO portfolio year-over-year SSNOI margin expanded by 300 bps in the third quarter driven primarily by strong RevPOR growth, which continued to meaningfully outpace Expense per Occupied Room ("ExpPOR") growth
  • During the third quarter, we completed $2.4 billion of pro rata gross investments, including $2.2 billion in acquisitions and loan funding and $203 million in development funding
  • Since the beginning of the year, we have closed or have definitive agreements to close $6.1 billion in pro rata acquisitions and loan funding
  • Improved net debt to Adjusted EBITDA to 3.73x at September 30, 2024 from 5.14x at September 30, 2023
  • As of September 30, 2024, we had approximately $8.8 billion of available liquidity inclusive of $3.8 billion of available cash and restricted cash and full capacity under our $5.0 billion line of credit
  • As previously announced, the Board of Directors approved a 10% increase in the quarterly dividend per share, reflecting our solid financial performance, low payout ratio owing to outsized levels of cash flow growth and the Board's confidence in the Company's strong growth prospects going forward

Capital Activity and Liquidity

Liquidity Update During the third quarter, net debt to consolidated enterprise value improved to 13.1% as of September 30, 2024 from 20.9% as of December 31, 2023. We sourced over $3.6 billion of attractively priced capital, including the assumption of below-market debt, issuance of exchangeable debt, equity and proceeds from dispositions and loan repayments to fund accretive capital deployment opportunities and to further strengthen our already robust liquidity profile. As of September 30, 2024, our share of variable rate debt was approximately 5.6%.

Expanded Senior Unsecured Revolving Credit Facility As previously reported, in July we closed on an expanded $5.0 billion senior unsecured revolving credit facility, which replaced our $4.0 billion existing line of credit. The new facility is comprised of a $3.0 billion revolving line of credit maturing in June 2028 that can be extended for an additional year and a $2.0 billion revolving line of credit maturing in June 2029. The revolving lines of credit will bear interest at a borrowing rate of 72.5 bps over the adjusted SOFR rate and an annual facility fee of 12.5 bps.

Exchangeable Senior Unsecured Notes Issuance In July, Welltower OP issued $1,035,000,000 aggregate principal amount of 3.125% exchangeable senior unsecured notes maturing July 15, 2029 (the "Exchangeable Notes") unless earlier exchanged, purchased or redeemed. The Exchangeable Notes will pay interest semi-annually in arrears on January 15 and July 15 of each year.

Notable Portfolio Activity

In the third quarter, we completed $2.4 billion of pro rata gross investments, including $2.2 billion in acquisitions and loan funding and $203 million in development funding. We opened nine development projects, including partial conversions and expansions, for an aggregate pro rata investment amount of $294 million. Additionally, during the third quarter we completed pro rata property dispositions and loan repayments of $384 million

Affinity Living Communities As previously announced, we entered into a definitive agreement to acquire a portfolio of 25 age-restricted active adult communities for $969 million through a privately negotiated, off-market transaction. During the quarter, we acquired 20 properties for approximately $691 million spread across two tranches, with the last tranche expected to close by the end of the year.

Triple-net to Seniors Housing Operating Transitions During the second and third quarters, we reached agreements to convert 52 triple-net leased properties to Seniors Housing Operating (RIDEA) structures, allowing us to directly participate in the underlying cash flow growth of the communities. The transition to highly-aligned RIDEA 4.0 structures will deepen our partnership with several leading managers, build on success within their existing portfolios, and ensure that both Welltower and our partners benefit from the communities' future growth potential. During the third quarter, we completed the conversion of 41 of these properties.

Environmental, Social and Governance ("ESG") 

We received the GRESB Green Star recognition for the fourth consecutive year, highlighting our achievement of performing above the industry average in energy performance, social commitments and governance practices.

Dividend On October 28, 2024, the Board of Directors declared a cash dividend for the quarter ended September 30, 2024 of $0.67 per share. This dividend, which will be paid on November 21, 2024 to stockholders of record as of November 13, 2024, will be our 214th consecutive quarterly cash dividend. The declaration and payment of future quarterly dividends remains subject to review and approval by the Board of Directors.

Outlook for 2024 Net income attributable to common stockholders guidance has been revised to a range of $1.75 to $1.81 per diluted share from the previous range of $1.52 to $1.60 per diluted share. We increased the guidance range of full year normalized FFO attributable to common stockholders to a range of $4.27 to $4.33 per diluted share from the previous range of $4.13 to $4.21 per diluted share. In preparing our guidance, we have updated or confirmed the following assumptions:

  • Same Store NOI: We expect average blended SSNOI growth of 11.5% to 13.0%, which is comprised of the following components:
    • Seniors Housing Operating approximately 22.0% to 24.0%
    • Seniors Housing Triple-net approximately 4.0% to 5.0%
    • Outpatient Medical approximately 2.0% to 3.0%
    • Long-Term/Post-Acute Care approximately 2.0% to 3.0%
  • Investments: Our earnings guidance includes only those acquisitions announced or closed to date. Furthermore, no transitions or restructures beyond those announced to date are included.
  • General and Administrative Expenses: We anticipate general and administrative expenses to be approximately $205 million to $211 million and stock-based compensation expense to be approximately $40 million, exclusive of approximately $33.5 million of expected expense related to the Special Performance Option Awards and the 2022-2025 OPP Awards.
  • Development: We anticipate funding an additional $247 million of development in 2024 relating to projects underway as of September 30, 2024.
  • Dispositions: We expect pro rata disposition proceeds of $899 million at a blended yield of 8.4% in the next twelve months. This includes approximately $790 million of consideration from expected property sales and $109 million of expected proceeds from loan repayments.
  • Pandemic Relief Funds: Our initial 2024 earnings guidance did not include the recognition of any pandemic relief funds which may be received during the year. During the nine months ended September 30, 2024, we recognized approximately $2 million at our share related to Provider Relief Funds and similar programs in the United Kingdom and Canada. Our updated guidance does not include any additional funds in 2024. In 2023, we recognized approximately $13 million at our share relating to Provider Relief Funds and similar programs in the United Kingdom and Canada.

Our guidance does not include any additional investments, dispositions or capital transactions, nor any other expenses, impairments, unanticipated additions to the loan loss reserve or other additional normalizing items beyond those disclosed. 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 2024 outlook and assumptions on the third quarter 2024 conference call.

Conference Call Information We have scheduled a conference call on Tuesday, October 29, 2024 at 9:00 a.m. Eastern Time to discuss our third quarter 2024 results, industry trends and portfolio performance. Telephone access will be available by dialing (888) 340-5024 or (646) 960-0135 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through November 5, 2024. To access the rebroadcast, dial (800) 770-2030 or (609) 800-9909 (international). The conference ID number is 8230248. To participate in the webcast, log on to www.welltower.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days.

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, net operating income ("NOI"), same store NOI ("SSNOI"), revenue per occupied room ("RevPOR"), same store RevPOR ("SS RevPOR"), expense per occupied room ("ExpPOR"), same store ExpPOR ("SS ExpPOR"), EBITDA and Adjusted EBITDA to be useful supplemental measures of our operating performance. Excluding EBITDA and Adjusted EBITDA, 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 National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO attributable to common stockholders, as defined by NAREIT, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and acquisitions of controlling interests, impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests. Normalized FFO attributable to common stockholders represents FFO attributable to common stockholders adjusted for certain items detailed in Exhibit 2. We believe that normalized FFO attributable to common stockholders is a useful supplemental measure of operating performance because investors and equity analysts may use this measure to compare the operating performance of Welltower between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items.

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 managers, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent general overhead costs that are unrelated to property operations and unallocable to the properties. These expenses include, but are not limited to, payroll and benefits related to corporate employees, 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 UK properties using a consistent exchange rate. 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 exceed 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 and ExpPOR represents the average expenses per occupied room per month at our Seniors Housing Operating properties. These metrics are calculated as our pro rata share of total resident fees and services revenues or property operating expenses from the income statement, divided by average monthly occupied room days. SS RevPOR and SS ExpPOR are used to evaluate the RevPOR and ExpPOR performance of our properties under a consistent population, which eliminates changes in the composition of our portfolio. They are based on the same pool of properties used for SSNOI and include any revenue and expense normalizations used for SSNOI. We use RevPOR, ExpPOR, SS RevPOR and SS ExpPOR 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.

We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt, net of cash and restricted cash. We expect to maintain capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current profile. The ratios are based on EBITDA and Adjusted EBITDA. EBITDA is defined as earnings (net income per income statement) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding unconsolidated entities and including adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses on disposition of properties and acquisitions of controlling interests, impairment of assets, gains/losses on derivatives and financial instruments, other expenses, other impairment charges and other adjustments deemed appropriate in management's opinion. We believe that EBITDA and Adjusted EBITDA, along with net income, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. Our leverage ratios include net debt to Adjusted EBITDA and consolidated enterprise value. Net debt is defined as total long-term debt, excluding operating lease liabilities, less cash and cash equivalents and restricted cash. Consolidated enterprise value represents the sum of net debt, the fair market value of our common stock and noncontrolling interests.

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 September 30, 2024, which is available on Welltower's website (www.welltower.com), for information and reconciliations of additional supplemental reporting measures.

About Welltower Welltower Inc. (NYSE:WELL), a real estate investment trust ("REIT") and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Welltower invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people's wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. More information is available at www.welltower.com. We routinely post important information on our website at www.welltower.com in the "Investors" section, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading "Investors". Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the Securities and Exchange Commission. The information on our website is not incorporated by reference in this press release, and our web address is included as an inactive textual reference only.

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 Welltower uses 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, Welltower is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower's actual results to differ materially from Welltower's 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; 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; Welltower's ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters, health emergencies (such as the COVID-19 pandemic) and other acts of God affecting Welltower's properties; Welltower's ability to re-lease space at similar rates as vacancies occur; Welltower's 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 Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower's properties; changes in rules or practices governing Welltower's financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower's ability to maintain its qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower's reports filed from time to time with the SEC. Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.

 

Welltower Inc.
Financial Exhibits

 

Consolidated Balance Sheets (unaudited)

(in thousands)



September 30,



2024


2023

Assets





Real estate investments:





Land and land improvements


$                       5,075,391


$                       4,373,058

Buildings and improvements


40,646,767


35,010,855

Acquired lease intangibles


2,268,889


1,961,799

Real property held for sale, net of accumulated depreciation


110,689


355,380

Construction in progress


1,374,996


1,338,076

Less accumulated depreciation and intangible amortization


(10,276,509)


(8,868,627)

Net real property owned


39,200,223


34,170,541

Right of use assets, net


358,160


338,693

Investments in sales-type leases, net


469,260


Real estate loans receivable, net of credit allowance


1,840,453


1,181,265

Net real estate investments


41,868,096


35,690,499

Other assets:





Investments in unconsolidated entities


1,742,836


1,568,096

Goodwill


68,321


68,321

Cash and cash equivalents


3,564,942


2,582,037

Restricted cash


219,466


104,674

Straight-line rent receivable


518,387


405,154

Receivables and other assets


971,650


1,235,921

Total other assets


7,085,602


5,964,203

Total assets


$                     48,953,698


$                     41,654,702






Liabilities and equity





Liabilities:





Unsecured credit facility and commercial paper


$                                   —


$                                   —

Senior unsecured notes


13,295,096


13,453,985

Secured debt


2,468,527


2,380,253

Lease liabilities


392,360


365,115

Accrued expenses and other liabilities


1,733,712


1,636,730

Total liabilities


17,889,695


17,836,083

Redeemable noncontrolling interests


270,182


244,793

Equity:





Common stock


620,107


533,918

Capital in excess of par value


37,949,035


30,056,076

Treasury stock


(114,876)


(112,313)

Cumulative net income


9,976,753


9,061,133

Cumulative dividends


(17,901,600)


(16,435,416)

Accumulated other comprehensive income


(195,138)


(149,362)

Total Welltower Inc. stockholders' equity


30,334,281


22,954,036

Noncontrolling interests


459,540


619,790

Total equity


30,793,821


23,573,826

Total liabilities and equity


$                     48,953,698


$                     41,654,702

 

Consolidated Statements of Income (unaudited)





(in thousands, except per share data)








Three Months Ended


Nine Months Ended




September 30,


September 30,




2024


2023


2024


2023

Revenues:










Resident fees and services


$        1,511,524


$        1,199,808


$        4,265,271


$        3,490,942


Rental income


430,486


384,507


1,183,949


1,152,005


Interest income


69,046


42,220


185,163


117,335


Other income


44,607


35,478


105,905


127,938


Total revenues


2,055,663


1,662,013


5,740,288


4,888,220

Expenses:










Property operating expenses


1,212,701


995,273


3,420,911


2,911,698


Depreciation and amortization


403,779


339,314


1,151,687


1,020,371


Interest expense


139,050


156,532


419,792


453,272


General and administrative expenses


77,901


46,106


186,784


134,764


Loss (gain) on derivatives and financial instruments, net


(9,906)


2,885


(18,785)


5,095


Loss (gain) on extinguishment of debt, net


419


1


2,130


7


Provision for loan losses, net


4,193


4,059


10,370


7,292


Impairment of assets


23,421


7,388


69,146


21,103


Other expenses


20,239


38,220


83,054


72,034


Total expenses


1,871,797


1,589,778


5,325,089


4,625,636

Income (loss) from continuing operations before income taxes










and other items


183,866


72,235


415,199


262,584

Income tax (expense) benefit


4,706


(4,584)


(2,586)


(11,132)

Income (loss) from unconsolidated entities


(4,038)


(4,031)


(6,925)


(51,434)

Gain (loss) on real estate dispositions and acquisitions of controlling interests, net


272,266


71,102


443,416


69,681

Income (loss) from continuing operations


456,800


134,722


849,104


269,699










Net income (loss)


456,800


134,722


849,104


269,699

Less: Net income (loss) attributable to noncontrolling interests(1)


6,951


7,252


17,395


13,516

Net income (loss) attributable to common stockholders


$           449,849


$           127,470


$           831,709


$           256,183

Average number of common shares outstanding:










Basic


611,290


521,848


595,353


504,420


Diluted


618,306


525,138


600,191


507,353

Net income (loss) attributable to common stockholders per share:










Basic


$                 0.74


$                 0.24


$                 1.40


$                 0.51


Diluted(2)


$                 0.73


$                 0.24


$                 1.39


$                 0.50

Common dividends per share


$                 0.67


$                 0.61


$                 1.89


$                 1.83











(1) Includes amounts attributable to redeemable noncontrolling interests.

(2) Includes adjustment to the numerator for income (loss) attributable to OP Units and DownREIT Units.

 

FFO Reconciliations








Exhibit 1


(in thousands, except per share data)


Three Months Ended


Nine Months Ended





September 30,


September 30,





2024


2023


2024


2023


Net income (loss) attributable to common stockholders


$        449,849


$       127,470


$        831,709


$        256,183


Depreciation and amortization


403,779


339,314


1,151,687


1,020,371


Impairments and losses (gains) on real estate dispositions and acquisitions of controlling interests, net


(248,845)


(63,714)


(374,270)


(48,578)


Noncontrolling interests(1)


(5,801)


(8,789)


(24,145)


(34,957)


Unconsolidated entities(2)


36,835


24,843


101,312


78,349


NAREIT FFO attributable to common stockholders


635,817


419,124


1,686,293


1,271,368


Normalizing items, net(3)


52,285


66,404


224,549


84,557


Normalized FFO attributable to common stockholders


$        688,102


$       485,528


$     1,910,842


$     1,355,925













Average diluted common shares outstanding


618,306


525,138


600,191


507,353













Per diluted share data attributable to common stockholders:











Net income (loss)(4)


$              0.73


$             0.24


$              1.39


$              0.50



NAREIT FFO


$              1.03


$             0.80


$              2.81


$              2.51



Normalized FFO


$              1.11


$             0.92


$              3.18


$              2.67













Normalized FFO Payout Ratio:











Dividends per common share


$              0.67


$             0.61


$              1.89


$              1.83



Normalized FFO attributable to common stockholders per share


$              1.11


$             0.92


$              3.18


$              2.67



Normalized FFO payout ratio


60 %


66 %


59 %


69 %













Other items:(5)










Net straight-line rent and above/below market rent amortization(6)


$        (48,093)


$       (32,340)


$      (120,201)


$        (96,060)


Non-cash interest expenses(7)


11,406


7,191


30,604


19,643


Recurring cap-ex, tenant improvements, and lease commissions


(81,196)


(50,026)


(200,160)


(127,633)


Stock-based compensation(8)


9,918


8,578


31,286


28,193




(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 Units and DownREIT Units.


(5) Amounts presented net of noncontrolling interests' share and including Welltower's share of unconsolidated entities.


(6) Excludes normalized other impairment (see Exhibit 2).


(7) Excludes normalized foreign currency loss (gain) (see Exhibit 2).


(8) Excludes normalized stock compensation expense related to the Special Performance Options and OPP awards (see Exhibit 2).




 

Normalizing Items





Exhibit 2


(in thousands, except per share data)

Three Months Ended


Nine Months Ended



September 30,


September 30,



2024


2023


2024


2023


Loss (gain) on derivatives and financial instruments, net

$             (9,906)

(1)

$               2,885


$           (18,785)


$               5,095


Loss (gain) on extinguishment of debt, net

419

(2)

1


2,130


7


Provision for loan losses, net

4,193

(3)

4,059


10,370


7,292


Income tax benefits




(246)


Other impairment


12,309


97,674


12,309


Other expenses

20,239

(4)

38,220


83,054


72,034


Leasehold interest termination




(65,485)


Special Performance Options and OPP Awards

29,838

(5)


29,838



Casualty losses, net of recoveries

3,224

(6)

1,014


7,335


9,069


Foreign currency loss (gain)

(1,766)

(7)

82


(1,357)


(490)


Normalizing items attributable to noncontrolling interests and unconsolidated entities, net

6,044

(8)

7,834


14,290


44,972


Net normalizing items

$             52,285


$             66,404


$           224,549


$             84,557











Average diluted common shares outstanding

618,306


525,138


600,191


507,353


Net normalizing items per diluted share

$                 0.08


$                 0.13


$                 0.37


$                 0.17











(1) Primarily related to mark-to-market of the equity warrants received as part of the Safanad/HC-One transactions.


(2) Primarily related to the closing of the expanded senior unsecured revolving credit facility.


(3) Primarily related to reserves for loan losses under the current expected credit losses accounting standard.


(4) Primarily related to non-capitalizable transaction costs.


(5) Primarily related to true-up accruals from the one-time 2021 Special Performance Option Awards and 2022-2025 Outperformance Program ("OPP") Awards which were
deemed probable this quarter based upon their respective financial metric hurdles. These accruals will be reversed if their respective hurdles are not eventually met.


(6) Primarily relates to casualty losses net of any insurance recoveries.


(7) Primarily relates to foreign currency gains and losses related to accrued interest on intercompany loans and third party debt denominated in a foreign currency.


(8) Primarily relates to hypothetical liquidation at book value adjustments related to in substance real estate investments.


 

Outlook Reconciliation: Year Ending December 31, 2024

Exhibit 3


(in millions, except per share data)


Prior Outlook


Current Outlook




Low


High


Low


High


FFO Reconciliation:










Net income attributable to common stockholders


$                  918


$                  966


$               1,067


$               1,104


Impairments and losses (gains) on real estate dispositions and acquisitions of controlling interests, net(1,2)


(249)


(249)


(387)


(387)


Depreciation and amortization(1)


1,650


1,650


1,691


1,691


NAREIT FFO attributable to common stockholders


2,319


2,367


2,371


2,408


Normalizing items, net(1,3)


172


172


228


228


Normalized FFO attributable to common stockholders


$               2,491


$               2,539


$               2,599


$               2,636












Diluted per share data attributable to common stockholders:










Net income


$                 1.52


$                 1.60


$                 1.75


$                 1.81


NAREIT FFO


$                 3.84


$                 3.92


$                 3.90


$                 3.96


Normalized FFO


$                 4.13


$                 4.21


$                 4.27


$                 4.33












Other items:(1)










Net straight-line rent and above/below market rent amortization


$                (144)


$                (144)


$                (159)


$                (159)


Non-cash interest expenses


44


44


45


45


Recurring cap-ex, tenant improvements, and lease commissions


(251)


(251)


(257)


(257)


Stock-based compensation


41


41


41


41





(1) Amounts presented net of noncontrolling interests' share and Welltower's share of unconsolidated entities.


(2) Includes estimated gains on projected dispositions.


(3) See Exhibit 2. Also includes estimated stock compensation expense related to the one-time 2021 Special Stock Performance Option Awards
and the 2022-2025 OPP Awards for the fourth quarter assuming the performance-based metrics continue to be probable of achievement.


 

SSNOI Reconciliation






Exhibit 4


(in thousands)


Three Months Ended







September 30,







2024


2023


% growth


Net income (loss)


$                         456,800


$                            134,722




Loss (gain) on real estate dispositions and acquisitions of controlling interests, net


(272,266)


(71,102)




Loss (income) from unconsolidated entities


4,038


4,031




Income tax expense (benefit)


(4,706)


4,584




Other expenses


20,239


38,220




Impairment of assets


23,421


7,388




Provision for loan losses, net


4,193


4,059




Loss (gain) on extinguishment of debt, net


419


1




Loss (gain) on derivatives and financial instruments, net


(9,906)


2,885




General and administrative expenses


77,901


46,106




Depreciation and amortization


403,779


339,314




Interest expense


139,050


156,532




Consolidated NOI


842,962


666,740




NOI attributable to unconsolidated investments(1)


32,043


29,488




NOI attributable to noncontrolling interests(2)


(17,332)


(22,838)




Pro rata NOI


857,673


673,390




Non-cash NOI attributable to same store properties


(24,835)


(26,713)




NOI attributable to non-same store properties


(290,656)


(165,506)




Currency and ownership adjustments(3)


(2,273)


1,027




Normalizing adjustments, net(4)


1,219


(1,749)




Same Store NOI (SSNOI)


$                         541,128


$                            480,449


12.6 %










Seniors Housing Operating


278,849


226,714


23.0 %


Seniors Housing Triple-net


76,591


72,412


5.8 %


Outpatient Medical


127,766


125,068


2.2 %


Long-Term/Post-Acute Care


57,922


56,255


3.0 %


Total SSNOI


$                         541,128


$                            480,449


12.6 %











(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 described in the accompanying Supplement.




 

Net Debt to Adjusted EBITDA Reconciliation




Exhibit 5


(in thousands)


Three Months Ended





September 30,





2024


2023


Net income (loss)


$                       456,800


$                     134,722


Interest expense


139,050


156,532


Income tax expense (benefit)


(4,706)


4,584


Depreciation and amortization


403,779


339,314


EBITDA


994,923


635,152


Loss (income) from unconsolidated entities


4,038


4,031


Stock-based compensation


39,756


8,578


Loss (gain) on extinguishment of debt, net


419


1


Loss (gain) on real estate dispositions and acquisitions of controlling interests, net


(272,266)


(71,102)


Impairment of assets


23,421


7,388


Provision for loan losses, net


4,193


4,059


Loss (gain) on derivatives and financial instruments, net


(9,906)


2,885


Other expenses


20,239


38,220


Casualty losses, net of recoveries


3,224


1,014


Other impairment(1)



12,309


Adjusted EBITDA


$                       808,041


$                     642,535








Total debt(2)


$                  15,854,937


$                15,899,420


Cash and cash equivalents and restricted cash


(3,784,408)


(2,686,711)


Net debt


$                  12,070,529


$                13,212,709








Adjusted EBITDA annualized


$                    3,232,164


$                  2,570,140


Net debt to Adjusted EBITDA ratio


3.73x


                             5.14 x









(1)  Represents the write-off of straight-line rent receivable and unamortized lease incentive balances for leases placed on cash recognition.


(2) Amounts include unamortized premiums/discounts, other fair value adjustments and financing lease liabilities. Excludes operating lease liabilities related to ASC 842 of $301,046,000 and
$299,933,000 for the three months ended September 30, 2024 and 2023, respectively.









 

Net Debt to Consolidated Enterprise Value




Exhibit 6


(in thousands, except share price)







September 30, 2024


December 31, 2023


Common shares outstanding


618,396


564,241


Period end share price


$                     128.03


$                       90.17


Common equity market capitalization


$              79,173,240


$              50,877,611








Net debt


$              12,070,529


$              13,739,143









Noncontrolling interests(1)


729,722


967,351


Consolidated enterprise value


$              91,973,491


$              65,584,105


Net debt to consolidated enterprise value


13.1 %


20.9 %









(1) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests as reflected on our consolidated balance sheets.









 

Reconciliation of SHO SS RevPOR Growth



Exhibit 7


(in thousands except SS RevPOR)

Three Months Ended



September 30,



2024


2023


Consolidated SHO revenues

$                1,530,350


$                1,203,899


Unconsolidated SHO revenues attributable to WELL(1)

64,494


59,550


SHO revenues attributable to noncontrolling interests(2)

(21,921)


(41,696)


SHO pro rata revenues(3)

1,572,923


1,221,753


Non-cash and non-RevPOR revenues on same store properties

(2,559)


(2,391)


Revenues attributable to non-same store properties

(513,653)


(254,327)


Currency and ownership adjustments(4)

(5,363)


426


SHO SS RevPOR revenues(5)

$                1,051,348


$                   965,461







Average occupied units/month(6)

55,662


53,598


SHO SS RevPOR(7)

$                       6,245


$                       5,955


SS RevPOR YOY growth

4.9 %














(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 1.36 and to translate UK
properties at a GBP/USD rate of 1.25.


(5) Represents SS SHO RevPOR revenues at Welltower pro rata ownership.


(6) Represents average occupied units for SS properties on a pro rata basis.


(7) Represents pro rata SS average revenues generated per occupied room per month.


 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/welltower-reports-third-quarter-2024-results-302289006.html

SOURCE Welltower Inc.

FAQ

What was Welltower's (WELL) normalized FFO per share in Q3 2024?

Welltower reported normalized FFO of $1.11 per diluted share in Q3 2024, representing a 20.7% increase over the prior year.

How much did Welltower's (WELL) same-store NOI grow in Q3 2024?

Welltower's total portfolio same-store NOI grew by 12.6% year-over-year, driven by 23.0% growth in the Seniors Housing Operating portfolio.

What is Welltower's (WELL) updated FFO guidance for full-year 2024?

Welltower increased its full-year 2024 normalized FFO guidance to a range of $4.27 to $4.33 per diluted share.

How much did Welltower (WELL) invest in acquisitions during Q3 2024?

Welltower completed $2.4 billion of pro rata gross investments in Q3 2024, including $2.2 billion in acquisitions and loan funding and $203 million in development funding.

Welltower Inc.

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