Welltower Inc. · NYSE:WELL
Welltower — Q3 2023 Earnings Presentation
22 slides from Welltower's earnings presentation, October 2023
Slide 1: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Quarter Ended September 30, 2023 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This document 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 exp
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES We believe that revenues, 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 Net Operating Income ("NOI"),
Slide 4: FFO and Normalized FFO
FFO and Normalized FFO 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
Slide 5: FFO Quarterly Reconciliations
FFO QUARTERLY RECONCILIATIONS (in thousands, except per share information) Three Months Ended September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Net income (loss) attributable to common stockholders $ (6,767) $ (3,728) $ 25,673 $ 103,040 $ 127,470 Depreciation and a
Slide 6: FFO Year-to-Date Reconciliations
FFO YEAR-TO-DATE RECONCILIATIONS (in thousands, except per share information) Nine Months Ended September 30, 2022 September 30, 2023 Net income (loss) attributable to common stockholders $ 144,942 $ 256,183 Depreciation and amortization 968,082 1,020,371 Impairments and losses (gains) on real estat
Slide 7: Earnings Outlook Reconciliation
Earnings Outlook Reconciliation Outlook Reconciliation: Year Ending December 31, 2023 (in millions, except per share data) Prior Outlook Current Outlook Low High Low High FFO Reconciliation: Net income attributable to common stockholders $ 385 $ 431 $ 468 $ 489 Impairments and losses (gains) on real
Slide 8: NOI, IPNOI, SSNOI, RevPOR, ExpPOR, SS RevPOR & SS ExpPOR
NOI, IPNOI, SSNOI, RevPOR, ExpPOR, SS REVPOR & SS ExpPOR 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 incl
Slide 9: NOI Quarterly Reconciliations
NOI QUARTERLY RECONCILIATIONS (dollars in thousands) Three Months Ended September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Net income (loss) $ (2,653) $ 1,798 $ 28,635 $ 106,342 $ 134,722 Loss (gain) on real estate dispositions, net (1,064) 4,423 (747) 2,168 (71,102
Slide 10: NOI Year-to-Date Reconciliations
NOI YEAR-TO-DATE RECONCILIATIONS (dollars in thousands) Nine Months Ended September 30, 2022 September 30, 2023 Net income $ 158,770 $ 269,699 Loss (gain) on real estate dispositions, net (20,466) (69,681) Loss (income) from unconsolidated entities 16,640 51,434 Income tax expense (benefit) 11,335 1
Slide 11: Current Quarter SSNOI by Segment
CURRENT QUARTER SSNOI BY SEGMENT (dollars in thousands at Welltower pro rata ownership) 3Q22 4Q22 1Q23 2Q23 3Q23 Y/o/Y Seniors Housing Operating NOI $ 230,197 $ 228,664 $ 248,763 $ 276,907 $ 288,290 Non-cash NOI on same store properties (349) (348) (312) (152) 230 NOI attributable to non-same store
Slide 12: IPNOI Reconciliation
IPNOI RECONCILIATION (in thousands at Welltower pro rata ownership) Seniors Housing Seniors Housing Outpatient Long-Term Operating Triple-net Medical /Post-Acute Care Corporate Total Three months ended September 30, 2023 Revenues $ 1,221,753 $ 145,396 $ 195,136 $ 88,812 $ 33,802 $ 1,684,899 Property
Slide 13: Reconciliations of SHO SS RevPOR Growth, SSNOI Growth and SSNOI/Unit
RECONCILIATIONS OF SHO SS RevPOR GROWTH, SSNOI GROWTH AND SSNOI/UNIT (dollars in thousands, except SS REVPOR and SSNOI/unit) United States United Kingdom Canada Total 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 SHO SS RevPOR Growth Consolidated SHO revenues $ 859,429 $ 970,588 $ 99,386 $ 112,267 $ 113,7
Slide 14: Reconciliations of SHO SS ExpPOR Growth
RECONCILIATIONS OF SHO SS ExpPOR GROWTH (dollars in thousands, except SS ExpPOR and units) 1Q22 1Q23 2Q22 2Q23 3Q22 3Q23 SHO SS ExpPOR Growth Consolidated SHO property operating expenses $ 791,975 $ 887,083 $ 789,299 $ 885,187 $ 841,914 $ 918,990 Unconsolidated SHO expenses attributable to WELL(1) 3
Slide 15: Reconciliations of SHO SS ExpPOR Growth (cont.)
RECONCILIATIONS OF SHO SS ExpPOR GROWTH (cont.) (dollars in thousands, except SS ExpPOR and units) 1Q21 1Q22 2Q21 2Q22 3Q21 3Q22 4Q21 4Q22 SHO SS ExpPOR Growth Consolidated SHO property operating expenses $ 555,968 $ 789,928 $ 582,361 $ 789,299 $ 666,610 $ 841,914 $ 724,405 $ 870,904 Unconsolidated
Slide 16: Reconciliations of SHO SS ExpPOR Growth (cont.)
RECONCILIATIONS OF SHO SS ExpPOR GROWTH (cont.) (dollars in thousands, except SS ExpPOR and units) 1Q19 1Q20 2Q19 2Q20 3Q19 3Q20 4Q19 4Q20 SHO SS ExpPOR Growth Consolidated SHO property operating expenses $ 607,686 $ 607,871 $ 637,317 $ 595,513 $ 581,341 $ 567,704 $ 591,005 $ 555,223 Unconsolidated
Slide 17: SHO RevPOR
SHO RevPOR (dollars in thousands, except RevPOR) Three months ended September 30, 2023 United States United Kingdom Canada Total Consolidated SHO revenues $ 970,588 $ 112,267 $ 121,044 $ 1,203,899 Unconsolidated SHO revenues attributable to Welltower(1) 30,953 2,990 25,607 59,550 (2) SHO revenues at
Slide 18: EBITDA and Adjusted EBITDA
EBITDA AND ADJUSTED EBITDA 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 cash equivalents and restricted cash. We expect to maintain capitali
Slide 19: EBITDA and Adjusted EBITDA Quarterly Reconciliations
EBITDA AND ADJUSTED EBITDA QUARTERLY RECONCILIATIONS (dollars in thousands) Three Months Ended September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Net income (loss) $ (2,653) $ 1,798 $ 28,635 $ 106,342 $ 134,722 Interest expense 139,682 140,391 144,403 152,337 156,53
Slide 20: EBITDA and Adjusted EBITDA Year-to-Date Reconciliations
EBITDA AND ADJUSTED EBITDA YEAR-TO- DATE RECONCILIATIONS (dollars in thousands) Nine Months Ended September 30, 2022 September 30, 2023 Net income $ 158,770 $ 269,699 Interest expense 389,128 453,272 Income tax expense (benefit) 11,335 11,132 Depreciation and amortization 968,082 1,020,371 EBITDA 1,
Slide 21: EBITDA and Adjusted EBITDA Trailing Twelve Months Reconciliations
EBITDA AND ADJUSTED EBITDA TRAILING TWELVE MONTHS RECONCILIATIONS (dollars in thousands) Twelve Months Ended September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Net income $ 224,964 $ 160,568 $ 123,452 $ 134,122 $ 271,497 Interest expense 510,976 529,519 552,226 576,
Slide 22: Capitalization Ratios Quarterly
CAPITALIZATION RATIOS QUARTERLY (Amounts in thousands, except share price) As of September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Book capitalization: Unsecured credit facility and commercial paper $ 654,715 $ — $ — $ — $ — Long-term debt obligations(1) 14,555,643