TOLEDO, Ohio, Feb. 22, 2018 /PRNewswire/ -- Welltower Inc.
(NYSE:HCN) today announced results for the quarter ended
December 31, 2017. For the quarter,
we generated net loss attributable to common stockholders of
$0.30 per share and normalized FFO
attributable to common stockholders of $1.02 per share. For the year, we generated net
income attributable to common stockholders of $1.26 per share and normalized FFO attributable
to common stockholders of $4.21 per
share.
Quarterly Highlights
- Total portfolio SSNOI grew 2.1%, driven by consistent growth
across all of our segments
- $334 million of high quality
investments with 80% sourced through existing relationships
- Announced an innovative outpatient medical joint venture
development in Orange County with
Providence St. Joseph's, adjacent to Mission Hospital on the land
of Simon Property Group's The Shops at Mission Viejo
- Expanded relationship with Sunrise Senior Living through an
off-market acquisition of a $368
million rental CCRC portfolio located in strategic markets
that is expected to close in the first quarter of 2018 at a 7.0%
initial yield
Annual Highlights
- Grew total portfolio average SSNOI by 2.7%, driven by 2.5%
growth in our seniors housing operating segment
- Delivered $548 million of
development projects with a 7.3% expected yield
- Completed $1.5 billion of
property sales and loan payoffs at a blended 7.0% yield on
sale
- Extinguished $1.4 billion of debt
and preferred securities
- Net debt to undepreciated book capitalization declined to 36.3%
from 37.4% at 12/31/16
"Welltower continues to redefine the role of a health care REIT
as an active partner in driving the next generation of health care
real estate," commented CEO Tom
DeRosa. "This is evident in our innovative outpatient
collaboration with the third largest U.S. health system, Providence
St. Joseph, in Mission Viejo, CA,
and throughout our seniors housing portfolio, which has seen the
Welltower platform deliver consistent growth through changing
market environments. These settings will drive health care delivery
to effective and technologically advanced real estate that is
accessible, consumer friendly, and able to produce better health
outcomes."
Capital Activity On December
31, 2017, we had $244 million
of cash and cash equivalents and $2.3
billion of available borrowing capacity under our primary
unsecured credit facility. During the fourth quarter, we generated
approximately $89 million in proceeds
under our ATM and DRIP programs at an average price of $67.06, bringing year-to-date proceeds to
$611 million at an average price of
$71.01. In addition, we extinguished
$137 million of secured debt,
bringing our full year retirement of debt and preferred securities
to $1.4 billion at a blended average
rate of 5.4%.
Outlook for 2018 We are introducing our 2018 earnings
guidance and expect to report net income attributable to common
stockholders in a range of $2.38 to
$2.48 per diluted share and
normalized FFO attributable to common stockholders in a range of
$3.95 to $4.05 per diluted share. As previously
disclosed, we no longer report FAD, primarily because it could be
considered a liquidity metric, but we do provide relevant data
components. In preparing our guidance, we have adjusted our blended
and long-term/post-acute care SSNOI
retroactively for the $35 million Genesis Master Lease
restructuring that is effective January 1,
2018 and have made the following assumptions:
- Same Store NOI: We expect average blended SSNOI growth of
approximately 1.0%-2.0% in 2018 which is comprised of the following
components:
-
- Seniors housing operating approximately 0.0%-1.5%
- Seniors housing triple-net approximately 2.5%-3.0%
- Long-term/post-acute care approximately 2.0%-2.5%
- Outpatient medical approximately 2.0%-2.5%
- Acquisitions: 2018 earnings guidance excludes any additional
potential acquisitions beyond what has been announced.
- Development: We anticipate funding development of approximately
$297 million in 2018 relating to
projects underway on December 31,
2017. We expect development conversions during 2018 of
approximately $413 million, which are
currently expected to generate stabilized yields of approximately
8.0%.
- Dispositions: We anticipate approximately $1.3 billion of disposition proceeds at a blended
yield of 7.2% in 2018. This includes approximately $0.6 billion of proceeds from dispositions
previously expected to close in 2017 and $0.7 billion of incremental proceeds from other
potential loan payoffs and property sales.
- G&A Expenses: We anticipate annual general and
administrative expenses of approximately $130 million in 2018, including $22 million of stock-based compensation.
Our guidance does not include any additional investments,
dispositions or capital transactions beyond what we have announced,
nor any transaction costs, impairments, unanticipated additions to
the loan loss reserve or other additional normalizing items.
Please see 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 2018 outlook and assumptions on the
fourth quarter 2017 conference call.
Dividend As previously announced, the Board of Directors
declared a cash dividend for the quarter ended December 31, 2017 of $0.87 per share. On February 21, 2018, we paid our 187th
consecutive quarterly cash dividend. The declaration and
payment of future quarterly dividends remains subject to review and
approval by the Board of Directors.
Quarterly Investment and Disposition Activity We
completed $334 million of pro rata
gross investments for the quarter including $223 million in acquisitions/JVs, $108 million in development funding and
$3 million in loans. 80% of
these investments were completed with existing relationships.
Acquisitions/JVs were comprised of six separate transactions at a
blended yield of 6.0%. The development fundings are expected to
yield 7.9% upon stabilization and the loans were made at a blended
rate of 8.8%. We also placed into service three development
projects totaling $41 million at a
blended stabilized yield of 9.6%. Also during the quarter, we
completed total dispositions of $142
million consisting of loan payoffs of $28 million at an average yield of 7.1% and
property sales of $114 million at a
blended yield on proceeds of 6.2%.
Notable Investments with Existing Operating Partners
Sunrise Senior Living As previously announced, we expanded our
relationship with Sunrise by entering into a definitive agreement
to acquire a portfolio of four rental continuing care retirement
communities located in the Washington
D.C. (2), Miami, and
Charlottesville MSAs. The properties are currently operated by
Sunrise under triple-net leases. Welltower will acquire 100% of the
landlord's ownership interest for $368
million and will transition the communities to a RIDEA
structure with Sunrise continuing to manage the communities under
an incentive-based management contract. The year one cap rate
is 7.0%. We closed on one community in December 2017 with the remaining three to follow
in the first quarter of 2018. Since our initial $243 million acquisition in 2012, we have
completed $5.3 billion of follow-on
pro rata investments with Sunrise.
New Perspective We expanded our relationship with New
Perspective by acquiring a 100% ownership interest in a 121-unit
private pay seniors housing property owned by a third party and
located in the Green Bay MSA for $33
million. The property opened in 2016 and was added to an
existing master lease which has a corporate guarantee and expires
in 2030. The initial lease yield is 6.25% with 25 basis point
annual increasers. Since closing our initial $17 million acquisition/leaseback in 2009, we
have completed $330 million of
follow-on pro rata investments with New Perspective.
Sagora Senior Living We expanded our relationship with Sagora by
acquiring a 38-unit private pay seniors housing property located in
the Tulsa MSA. The property was acquired through our existing 94/6
joint venture with Sagora and the purchase price based on a 100%
ownership interest was $10 million.
The property was added to an existing master lease at an initial
lease yield of 6.25% which escalates 4.00% annually for the first
two years and then 3.00% annually thereafter. Since completing our
initial $8.5 million acquisition in
2010, we have completed $626 million
of follow-on investments with Sagora.
Florida Medical Clinic We acquired a 100% interest in three
off-campus, affiliated outpatient medical buildings in the Tampa
MSA. The purchase price was $46
million, which represents a year one cap rate of 6.1%. The
properties combined are 109,785 rentable square feet, have an
average age of seven years and are 100% master leased to Florida
Medical Clinic, a physician's group with over 200 doctors and 25
specialties in 49 patient care sites throughout the Tampa MSA.
Florida Medical Clinic leases over 300,000 square feet of space in
Welltower properties.
Ascension We acquired a 100% interest in an off-campus,
affiliated outpatient medical office building in the Austin MSA.
The purchase price was $11 million,
which represents a year one cap rate of 5.1%. The property is
20,577 rentable square feet, was built in 2017 and is 100% master
leased to Seton Healthcare, a subsidiary of Ascension Health.
Ascension Health is the largest non-profit health system in the
U.S. and the world's largest Catholic health system, encompasses
15,700 staffed beds across 131 hospitals and generates $17.6 billion of annual net patient revenues.
Ascension leases over 200,000 square feet of space in Welltower
properties.
Notable Investments with New Operating Partners
Summit Medical Group We acquired a 100% interest in an
off-campus, affiliated outpatient medical building in the New York
MSA. The purchase price was $68
million, which represents a year one cap rate of 5.0%. The
property is 130,000 rentable square feet, was built in 2017 and is
100% master leased to Summit Medical Group, the largest and oldest
physician-owned multispecialty medical practice in New Jersey with over 700 doctors in over 70
patient care sites.
Notable Development Conversions
Sunrise Senior Living We expanded our relationships with Sunrise
and Revera by completing the development of a private pay Gracewell
brand seniors housing property located in the Greater London area for £12 million based on
100% ownership interest. Revera is a 25% joint venture partner. The
purchase price represents an 11.4% stabilized return on cost. Since
closing our initial $243 million
acquisition in 2012, we have completed $5.3
billion of follow-on pro rata investments with Sunrise.
Notable Dispositions
LifeCare Health Partners We completed the disposition of one
long-term acute care hospital for $31
million. The property was purchased by Froedtert Health and
it will continue to be leased to LifeCare, the operator of the
long-term acute care hospital. We realized a gain on sale of
$13 million and an unlevered IRR of
12.5%.
Genesis Healthcare We received $28
million in repayments from Genesis on loans that had an
average yield of 7%.
Revera Inc We completed the disposition of a seniors housing
property with 187 units located on a 5.6 acre site in Vancouver, British Columbia, Canada. The
property was owned 75% by Welltower and 25% by Revera, and the real
estate was sold to a developer who intends to redevelop the site.
The developer has agreed to construct a 190,000 square foot seniors
housing property for the Welltower/Revera JV on a portion of the
existing site at cost plus a development fee. The real estate was
sold for $76 million representing a
4.6% cap on in-place NOI, and we realized an unlevered IRR of
18.3%.
Investments Subsequent to Year-end
Cogir Management Corporation We initiated a relationship with
Cogir Management Corporation in Canada through the acquisition of six
independent living communities with 1,466 units located in
Montreal (4) and Quebec City (2), two of Canada's top 10 MSAs. The communities were
acquired through the formation of a new 95/5 RIDEA joint venture
with Cogir and the purchase price, based on a 100% interest, was
$248 million CAD. The year one cap
rate is 6.5%. Cogir is the third largest seniors housing operator
in Canada with over 8,100 units,
and currently manages seven properties in Quebec on behalf of the Welltower / Revera
joint venture.
Genesis Recapitalization Led by Midcap Financial Trust
("Midcap"), an Apollo Global Management ("Apollo") Company
Genesis HealthCare (NYSE:GEN) ("Genesis") has solidified its
corporate recapitalization efforts by securing financing
commitments for a new asset based lending facility ("ABL") and an
agreement for an amended and expanded term loan, as well as master
lease and loan restructurings. This significant accomplishment
substantially strengthens Genesis's balance sheet and liquidity
position through the cooperative efforts of Genesis and their new
and existing credit parties.
- Corporate Recapitalization:
-
- New $555 million MidCap
ABL: On February 2, 2018 Genesis
entered into a commitment letter with MidCap, a wholly owned
subsidiary of Apollo, one of the most preeminent alternative asset
managers in the world with nearly $250
billion in assets under management. Pursuant to this
agreement, MidCap will provide Genesis with a $555 million credit facility comprised of a
$325 million first lien term loan
facility, $200 million first lien
revolving credit facility, and a $30
million overline facility (collectively, the "New ABL Credit
Facilities"). The New ABL Credit Facilities will have five-year
terms and proceeds will be used to replace and repay in full the
company's existing $525 million
revolving credit facilities that are scheduled to mature on
February 2, 2020. Subject to the
satisfaction of customary closing conditions, Genesis and MidCap
expect to close the New ABL Credit Facilities by March 9, 2018.
- $40 million Term Loan
Expansion: Welltower and Omega Healthcare Investors, Inc.
("Omega") have entered into an agreement with Genesis to amend and
expand the existing Genesis $120
million term loan agreement. Welltower will fund a
$24 million tranche and will receive
priority of repayment among lenders. Effective February 15, 2018, the loan will bear an interest
rate equal to LIBOR (subject to a LIBOR floor of 1%) plus an
applicable margin of 13%, of which 5% will be paid in cash and the
remainder paid-in-kind. Subject to the satisfaction of closing
conditions, Welltower and Omega expect to close the amended term
loan facility concurrently with the New ABL Credit Facilities by
March 9, 2018.
- Welltower Real Estate Loans: As of December 31, 2017, Welltower currently has
approximately $275 million of
outstanding real estate loans ("Bridge Loans") due January 1, 2022, currently carrying an annual
cash interest rate of 10.25% through November 2017, at which point Welltower stopped
recognizing interest income. Welltower and Genesis have entered
into a definitive agreement to amend the annual interest rate
beginning February 15, 2018 to 12%,
of which 7% will be paid in cash and 5% will be paid-in-kind, and
Welltower will have recommenced interest income recognition on a
cash-basis. Genesis continues to make progress on refinancing and
asset sale transactions to secure commitments to repay no less than
$105 million of obligations. If
Genesis is unsuccessful in securing such commitments or otherwise
reducing the outstanding obligation on or before April 1, 2018, the cash pay component of the
interest rate will increase by approximately $2 million annually.
- Welltower Convertible Note: In November 2017, Welltower exercised its right to
convert approximately $12 million of
unsecured debt to three million shares of Genesis Class A common
stock. The convertible note was provided to Welltower by Genesis in
consideration for reduced rent and escalators that Genesis received
as part of Welltower's sale of Genesis properties to Cindat and
Union Life on November 2, 2016.
- Welltower Master Lease Restructuring: Effective
January 1, 2018 the Genesis annual
cash rent obligation under the Master Lease will be reduced by
$35 million and the term will be
extended by 5 years. Additionally, lease escalators will be set to
2.5% in year one and 2% thereafter, and rent will be reset on
January 31, 2023 in such fashion to
permit the rent payable to Welltower to increase up to $35 million subject to increases in EBITDAR
relative to the trailing twelve months ended December 31, 2017, generated by the properties
comprising the master lease portfolio.
- Sabra Master Lease:
Effective January 1, 2018, Genesis
has realized permanent and unconditional annual cash rent savings
of $19 million pursuant to a
definitive agreement between Genesis and Sabra Health Care REIT,
Inc.
- Disposition Guidance Update: Since 2016, Welltower has received
over $1.9 billion in proceeds from
loan payoffs and property sales related to Genesis resulting in an
IRR of 10.3%. In 2018 we anticipate approximately $275 million of proceeds from potential loan
payoffs and property sales related to Genesis, which are included
in our disposition guidance.
- Welltower As-Adjusted Portfolio: As-adjusted for the
restructuring summarized above, Welltower's Genesis concentration
will decrease from 6.8% to 5.2% and long-term/post-post acute
exposure will decrease from 12.6% to 11.0%. Private pay revenue mix
will increase from 94.2% to 94.7%. Additionally, post Genesis's
wider restructuring, coverage after management fee will increase to
1.34x and coverage before management fee will increase to 1.73x on
an as-adjusted basis. Through the above restructuring efforts,
Genesis's improved balance sheet and liquidity profile will result
in a significantly stronger corporate credit guarantee to
Welltower. Through the cooperative efforts of Genesis management
and all credit partners, Welltower's ongoing partnership with
Genesis is substantially improved.
Conference Call Information We have scheduled a
conference call on Thursday, February 22,
2018 at 10:00 a.m. Eastern
Time to discuss our fourth quarter 2017 results, industry
trends, portfolio performance and outlook for 2018. Telephone
access will be available by dialing 888-346-2469 or 706-758-4923
(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 March 8,
2018. To access the rebroadcast, dial 855-859-2056 or
404-537-3406 (international). The conference ID number is
2249568. 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 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 funds from operations (FFO), net operating
income (NOI), In-Place Net Operating Income (IPNOI), same store net
operating income (SSNOI), and Adjusted EBITDA (A-EBITDA) to be
useful supplemental measures of our operating performance.
Excluding A-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 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 1. 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 the company 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 seniors housing operating
and outpatient medical 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. IPNOI represents NOI excluding interest
income, other income and non-IPNOI and adjusted for timing of
current quarter portfolio changes such as acquisitions, development
conversions, segment transitions, dispositions and investments held
for sale.
SSNOI is used to evaluate the operating performance of our
properties under a consistent population which eliminates 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, sub-leases and major capital
restructurings as well as any properties acquired,
developed/redeveloped, transitioned, sold or classified as held for
sale during that period are 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 exceed
0.50% of SSNOI growth per property type) are separately disclosed
and explained in the relevant supplemental information package. We
believe SSNOI provides investors relevant and useful information
because it measures the operating performance of our properties at
the property level on an unleveraged basis. No reconciliation of
the forecasted range for SSNOI on a combined or segment basis 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.
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 IRC section 1031 deposits. We expect to maintain
capitalization ratios and coverage ratios sufficient to maintain a
capital structure consistent with our current profile. The coverage
ratios are based on EBITDA which stands for earnings (net income
per income statement) before interest expense, income taxes,
depreciation and amortization. Covenants in our senior unsecured
notes contain financial ratios based on a definition of EBITDA that
is specific to those agreements. Failure to satisfy these
covenants could result in an event of default that could have a
material adverse impact on our cost and availability of capital,
which could in turn have a material adverse impact on our
consolidated results of operations, liquidity and/or financial
condition. Due to the materiality of these debt agreements
and the financial covenants, we have defined A-EBITDA to exclude
unconsolidated entities and to include adjustments for stock-based
compensation expense, provision for loan losses, gains/losses on
extinguishment of debt, transactions costs,
gains/losses/impairments on properties, gains/losses on derivatives
and other non-recurring and/or non-cash income/charges. We believe
that A-EBITDA, along with net income and cash flow provided from
operating activities, is an important supplemental measure because
it provides additional information to assess and evaluate the
performance of our operations. Our leverage ratios include net debt
to undepreciated book capitalization and net debt to A-EBITDA.
Undepreciated book capitalization represents book capitalization
adjusted for accumulated depreciation and amortization. Book
capitalization represents the sum of net debt (defined as total
long-term debt less cash and cash equivalents and any IRC section
1031 deposits), total equity and redeemable 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 December 31,
2017, which is available on the company's website
(www.welltower.com), for information and reconciliations of
additional supplemental reporting measures.
About Welltower Welltower Inc. (NYSE:HCN), an S&P 500
company headquartered in Toledo,
Ohio, is driving the transformation of health care
infrastructure. The company 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™, a real estate investment trust
("REIT"), 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 the company's 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 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; 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 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 our properties; changes
in rules or practices governing our financial reporting; the
movement of U.S. and foreign currency exchange rates; our ability
to maintain our qualification as a REIT; key management personnel
recruitment and retention; and other risks described in our reports
filed from time to time with the Securities and Exchange
Commission. Finally, we undertake 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)
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
|
Real estate
investments:
|
|
|
|
|
|
|
|
|
|
Land and land
improvements
|
|
$
|
2,734,467
|
|
$
|
2,591,071
|
|
|
|
Buildings and
improvements
|
|
|
25,373,117
|
|
|
24,496,153
|
|
|
|
Acquired lease
intangibles
|
|
|
1,502,471
|
|
|
1,402,884
|
|
|
|
Real property held
for sale, net of accumulated depreciation
|
|
|
734,147
|
|
|
1,044,859
|
|
|
|
Construction in
progress
|
|
|
237,746
|
|
|
506,091
|
|
|
|
|
|
|
30,581,948
|
|
|
30,041,058
|
|
|
|
Less accumulated
depreciation and intangible amortization
|
|
|
(4,838,370)
|
|
|
(4,093,494)
|
|
|
|
|
Net real property
owned
|
|
|
25,743,578
|
|
|
25,947,564
|
|
|
|
Real estate loans
receivable
|
|
|
495,871
|
|
|
622,628
|
|
|
|
Less allowance for
losses on loans receivable
|
|
|
(68,372)
|
|
|
(6,563)
|
|
|
|
|
Net real estate loans
receivable
|
|
|
427,499
|
|
|
616,065
|
|
|
|
Net real estate
investments
|
|
|
26,171,077
|
|
|
26,563,629
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
|
Investments in
unconsolidated entities
|
|
|
445,585
|
|
|
457,138
|
|
|
|
Goodwill
|
|
|
68,321
|
|
|
68,321
|
|
|
|
Cash and cash
equivalents
|
|
|
243,777
|
|
|
419,378
|
|
|
|
Restricted
cash
|
|
|
65,526
|
|
|
187,842
|
|
|
|
Straight-line rent
receivable
|
|
|
389,168
|
|
|
342,578
|
|
|
|
Receivables and other
assets
|
|
|
560,991
|
|
|
826,298
|
|
|
|
|
|
|
1,773,368
|
|
|
2,301,555
|
|
Total
assets
|
|
$
|
27,944,445
|
|
$
|
28,865,184
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Borrowings under
primary unsecured credit facility
|
|
$
|
719,000
|
|
$
|
645,000
|
|
|
|
Senior unsecured
notes
|
|
|
8,331,722
|
|
|
8,161,619
|
|
|
|
Secured
debt
|
|
|
2,608,976
|
|
|
3,477,699
|
|
|
|
Capital lease
obligations
|
|
|
72,238
|
|
|
73,927
|
|
|
|
Accrued expenses and
other liabilities
|
|
|
911,863
|
|
|
827,034
|
|
Total
liabilities
|
|
|
12,643,799
|
|
|
13,185,279
|
|
Redeemable
noncontrolling interests
|
|
|
375,194
|
|
|
398,433
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
718,503
|
|
|
1,006,250
|
|
|
|
Common
stock
|
|
|
372,449
|
|
|
363,071
|
|
|
|
Capital in excess of
par value
|
|
|
17,662,681
|
|
|
16,999,691
|
|
|
|
Treasury
stock
|
|
|
(64,559)
|
|
|
(54,741)
|
|
|
|
Cumulative net
income
|
|
|
5,316,580
|
|
|
4,803,575
|
|
|
|
Cumulative
dividends
|
|
|
(9,471,712)
|
|
|
(8,144,981)
|
|
|
|
Accumulated other
comprehensive income
|
|
|
(111,465)
|
|
|
(169,531)
|
|
|
|
Other
equity
|
|
|
670
|
|
|
3,059
|
|
|
|
|
Total Welltower Inc.
stockholders' equity
|
|
|
14,423,147
|
|
|
14,806,393
|
|
|
|
Noncontrolling
interests
|
|
|
502,305
|
|
|
475,079
|
|
Total
equity
|
|
|
14,925,452
|
|
|
15,281,472
|
|
Total liabilities
and equity
|
|
$
|
27,944,445
|
|
$
|
28,865,184
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Income (unaudited)
|
(in thousands,
except per share data)
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
360,249
|
|
$
|
389,372
|
|
$
|
1,445,871
|
|
$
|
1,648,815
|
|
|
Resident fees and
service
|
|
|
729,666
|
|
|
657,345
|
|
|
2,779,423
|
|
|
2,504,731
|
|
|
Interest
income
|
|
|
11,975
|
|
|
23,688
|
|
|
73,811
|
|
|
97,963
|
|
|
Other
income
|
|
|
2,367
|
|
|
7,916
|
|
|
17,536
|
|
|
29,651
|
Gross
revenues
|
|
|
1,104,257
|
|
|
1,078,321
|
|
|
4,316,641
|
|
|
4,281,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
127,217
|
|
|
126,360
|
|
|
484,622
|
|
|
521,345
|
|
|
Property operating
expenses
|
|
|
547,904
|
|
|
494,835
|
|
|
2,083,925
|
|
|
1,876,983
|
|
|
Depreciation and
amortization
|
|
|
238,458
|
|
|
227,916
|
|
|
921,720
|
|
|
901,242
|
|
|
General and
administrative expenses
|
|
|
28,365
|
|
|
32,807
|
|
|
122,008
|
|
|
155,241
|
|
|
Transaction
costs
|
|
|
-
|
|
|
9,704
|
|
|
-
|
|
|
42,910
|
|
|
Loss (gain) on
derivatives, net
|
|
|
-
|
|
|
68
|
|
|
2,284
|
|
|
(2,448)
|
|
|
Loss (gain) on
extinguishment of debt, net
|
|
|
371
|
|
|
17,204
|
|
|
37,241
|
|
|
17,214
|
|
|
Provision for loan
losses
|
|
|
62,966
|
|
|
10,215
|
|
|
62,966
|
|
|
10,215
|
|
|
Impairment of
assets
|
|
|
99,821
|
|
|
13,187
|
|
|
124,483
|
|
|
37,207
|
|
|
Other
expenses
|
|
|
60,167
|
|
|
8,838
|
|
|
177,776
|
|
|
11,998
|
|
Total
expenses
|
|
|
1,165,269
|
|
|
941,134
|
|
|
4,017,025
|
|
|
3,571,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and income from
unconsolidated entities
|
|
|
(61,012)
|
|
|
137,187
|
|
|
299,616
|
|
|
709,253
|
Income tax (expense)
benefit
|
|
|
(25,663)
|
|
|
16,585
|
|
|
(20,128)
|
|
|
19,128
|
Income (loss) from
unconsolidated entities
|
|
|
(59,449)
|
|
|
(2,829)
|
|
|
(83,125)
|
|
|
(10,357)
|
Income (loss) from
continuing operations
|
|
|
(146,124)
|
|
|
150,943
|
|
|
196,363
|
|
|
718,024
|
Gain (loss) on real
estate dispositions, net
|
|
|
56,381
|
|
|
200,165
|
|
|
344,250
|
|
|
364,046
|
Net income
(loss)
|
|
|
(89,743)
|
|
|
351,108
|
|
|
540,613
|
|
|
1,082,070
|
Less:
|
Preferred
dividends
|
|
|
11,676
|
|
|
16,352
|
|
|
49,410
|
|
|
65,406
|
|
|
|
Preferred stock
redemption charge
|
|
|
-
|
|
|
-
|
|
|
9,769
|
|
|
-
|
|
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
10,104
|
|
|
1,714
|
|
|
17,839
|
|
|
4,267
|
Net income (loss)
attributable to common stockholders
|
|
$
|
(111,523)
|
|
$
|
333,042
|
|
$
|
463,595
|
|
$
|
1,012,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
370,485
|
|
|
362,088
|
|
|
367,237
|
|
|
358,275
|
|
|
Diluted
|
|
|
370,485
|
|
|
364,369
|
|
|
369,001
|
|
|
360,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.30)
|
|
$
|
0.92
|
|
$
|
1.26
|
|
$
|
2.83
|
|
|
Diluted
|
|
$
|
(0.30)
|
|
$
|
0.91
|
|
$
|
1.26
|
|
$
|
2.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common dividends per
share
|
|
$
|
0.87
|
|
$
|
0.86
|
|
$
|
3.48
|
|
$
|
3.44
|
|
Outlook
Reconciliations: Year Ended December 31, 2018
|
|
Exhibit 1
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Current
Outlook
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
FFO
Reconciliation:
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
|
892
|
|
$
|
930
|
|
|
Losses/impairments
(gains) on properties, net(1,2)
|
|
(338)
|
|
|
(338)
|
|
|
Depreciation and
amortization(1)
|
|
927
|
|
|
927
|
|
|
Normalized FFO
attributable to common stockholders
|
$
|
1,481
|
|
$
|
1,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data
attributable to common stockholders:
|
|
|
|
|
|
|
|
Net income
|
$
|
2.38
|
|
$
|
2.48
|
|
|
Normalized
FFO
|
|
3.95
|
|
|
4.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Items(1)
|
|
|
|
|
|
|
|
Net straight-line
rent and above/below market rent amortization
|
$
|
(62)
|
|
$
|
(62)
|
|
|
Non-cash interest
expenses
|
|
15
|
|
|
15
|
|
|
Recurring cap-ex,
tenant improvements, and lease commissions
|
|
(72)
|
|
|
(72)
|
|
|
Stock-based
compensation
|
|
22
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(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,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
Loss (gain) on
derivatives, net
|
$
|
-
|
|
$
|
68
|
|
|
$
|
2,284
|
|
$
|
(2,448)
|
|
|
Loss (gain) on
extinguishment of debt, net
|
|
371
(2)
|
|
|
17,204
|
|
|
|
37,241
|
|
|
17,214
|
|
|
Provision for loan
losses
|
|
62,966
(3)
|
|
|
10,215
|
|
|
|
62,966
|
|
|
10,215
|
|
|
Preferred stock
redemption charge
|
|
-
|
|
|
-
|
|
|
|
9,769
|
|
|
-
|
|
|
Nonrecurring interest
expense
|
|
2,634
(4)
|
|
|
-
|
|
|
|
2,634
|
|
|
-
|
|
|
Nonrecurring income
tax expenses (benefits)
|
|
17,354
(5)
|
|
|
(15,675)
|
|
|
|
9,438
|
|
|
(15,675)
|
|
|
Other expenses and
transaction costs(1)
|
|
60,167
(6)
|
|
|
18,542
|
|
|
|
177,776
|
|
|
54,908
|
|
|
Additional other
income
|
|
-
|
|
|
(4,853)
|
|
|
|
-
|
|
|
(16,664)
|
|
|
Normalizing items
attributable to noncontrolling interests and unconsolidated
entities, net
|
|
57,566
(7)
|
|
|
3,214
|
|
|
|
86,589
|
|
|
7,228
|
|
|
Net normalizing
items
|
$
|
201,058
|
|
$
|
28,715
|
|
|
$
|
388,697
|
|
$
|
54,778
|
|
|
Average diluted
common shares outstanding
|
|
372,145
|
|
|
364,369
|
|
|
|
369,001
|
|
|
360,227
|
|
|
Net normalizing items
per diluted share
|
$
|
0.54
|
|
$
|
0.08
|
|
|
$
|
1.05
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(1) Effective 1/1/17
with the adoption of ASU 2017-01, any non-capitalizable transaction
costs are in Other Expenses.
|
|
|
|
(2) Primarily related
to secured debt extinguishments.
|
|
|
|
(3) Primarily related
to Genesis loan restructurings.
|
|
|
|
(4) Primarily related
to early settlement of cash flow hedges due to changes in income
tax law impacting our UK investments.
|
|
|
|
(5) Primarily related
to deferred taxes and valuation allowances including the impact of
the Tax Cuts and Jobs Act.
|
|
|
|
(6) Primarily related
to $41 million of headquarter donation expenses, $18 million of a
marketable securities impairment and non-capitalizable transaction
costs offset by net severance-related costs/settlements.
|
|
|
|
(7) Primarily related
to impairment of an unconsolidated joint venture investment as well
as non-capitalizable transaction costs and the impact of the Tax
Cuts and Jobs Act in joint ventures.
|
|
|
FFO
Reconciliations
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
3
|
|
|
(in thousands,
except per share data)
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
Net income (loss)
attributable to common stockholders
|
$
|
(111,523)
|
|
$
|
333,042
|
|
|
$
|
463,595
|
|
$
|
1,012,397
|
|
|
Depreciation and
amortization
|
|
238,458
|
|
|
227,916
|
|
|
|
921,720
|
|
|
901,242
|
|
|
Losses/impairments
(gains) on properties, net
|
|
43,440
|
|
|
(186,978)
|
|
|
|
(219,767)
|
|
|
(326,840)
|
|
|
Noncontrolling
interests(1)
|
|
(8,131)
|
|
|
(17,897)
|
|
|
|
(60,018)
|
|
|
(71,527)
|
|
|
Unconsolidated
entities(2)
|
|
16,980
|
|
|
16,746
|
|
|
|
60,046
|
|
|
67,667
|
|
|
NAREIT FFO
attributable to common stockholders
|
|
179,224
|
|
|
372,829
|
|
|
|
1,165,576
|
|
|
1,582,939
|
|
|
Normalizing items,
net(3)
|
|
201,058
|
|
|
28,715
|
|
|
|
388,697
|
|
|
54,778
|
|
|
Normalized FFO
attributable to common stockholders
|
$
|
380,282
|
|
$
|
401,544
|
|
|
$
|
1,554,273
|
|
$
|
1,637,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average diluted
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For net income (loss)
purposes
|
|
370,485
|
|
|
364,369
|
|
|
|
369,001
|
|
|
360,227
|
|
|
|
For FFO
purposes
|
|
372,145
|
|
|
364,369
|
|
|
|
369,001
|
|
|
360,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data
attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(0.30)
|
|
$
|
0.91
|
|
|
$
|
1.26
|
|
$
|
2.81
|
|
|
|
NAREIT FFO
|
|
0.48
|
|
|
1.02
|
|
|
|
3.16
|
|
|
4.39
|
|
|
|
Normalized
FFO
|
|
1.02
|
|
|
1.10
|
|
|
|
4.21
|
|
|
4.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO Payout
Ratio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
$
|
0.87
|
|
$
|
0.86
|
|
|
$
|
3.48
|
|
$
|
3.44
|
|
|
|
Normalized FFO
attributable to common stockholders per share
|
$
|
1.02
|
|
$
|
1.10
|
|
|
$
|
4.21
|
|
$
|
4.55
|
|
|
|
|
Normalized FFO payout
ratio
|
|
85%
|
|
|
78%
|
|
|
|
83%
|
|
|
76%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
items:(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net straight-line
rent and above/below market rent amortization
|
$
|
(18,692)
|
|
$
|
(22,557)
|
|
|
$
|
(72,838)
|
|
$
|
(106,098)
|
|
|
Non-cash interest
expenses
|
|
3,219
|
|
|
771
|
|
|
|
13,042
|
|
|
4,014
|
|
|
Recurring cap-ex,
tenant improvements, and lease commissions
|
|
(22,400)
|
|
|
(19,233)
|
|
|
|
(68,120)
|
|
|
(66,701)
|
|
|
Stock-based
compensation(5)
|
|
2,643
|
|
|
5,395
|
|
|
|
17,721
|
|
|
24,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(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
expenses.
|
|
|
Undepreciated Book
Capitalization
|
|
|
|
Exhibit
4
|
|
|
(in
thousands)
|
|
As Of
|
|
|
|
|
|
|
December 31,
2017
|
|
|
December 31,
2016
|
|
|
|
|
Lines of
credit
|
$
|
719,000
|
|
$
|
645,000
|
|
|
|
|
Long-term debt
obligations(1)
|
|
11,012,936
|
|
|
11,713,245
|
|
|
|
|
Cash and cash
equivalents(2)
|
|
(249,620)
|
|
|
(557,659)
|
|
|
|
|
Net debt
|
|
11,482,316
|
|
|
11,800,586
|
|
|
|
|
Accumulated
depreciation and amortization
|
|
4,838,370
|
|
|
4,093,494
|
|
|
|
|
Total
equity(3)
|
|
15,300,646
|
|
|
15,679,906
|
|
|
|
|
Undepreciated book
capitalization
|
$
|
31,621,332
|
|
$
|
31,573,986
|
|
|
|
|
Net debt to
undepreciated book capitalization ratio
|
|
36.3%
|
|
|
37.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(1) Amounts include
unamortized premiums/discounts and other fair value adjustments as
reflected on balance sheet.
|
|
|
|
(2) Inclusive of IRC
section 1031 deposits, if any.
|
|
|
|
(3) Includes all
noncontrolling interests (redeemable and permanent) as reflected on
balance sheet.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSNOI
Reconciliations
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
5
|
|
|
(in
thousands)
|
Three Month
Ended
|
|
|
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
Net income
(loss)
|
$
|
337,610
|
|
$
|
165,474
|
|
$
|
203,441
|
|
$
|
210,749
|
|
$
|
89,299
|
|
$
|
354,741
|
|
$
|
(89,743)
|
|
$
|
351,108
|
|
|
Loss (gain) on real
estate dispositions, net
|
|
(244,092)
|
|
|
-
|
|
|
(42,155)
|
|
|
(1,530)
|
|
|
(1,622)
|
|
|
(162,351)
|
|
|
(56,381)
|
|
|
(200,165)
|
|
|
Loss (income) from
unconsolidated entities
|
|
23,106
|
|
|
3,820
|
|
|
3,978
|
|
|
1,959
|
|
|
(3,408)
|
|
|
1,749
|
|
|
59,449
|
|
|
2,829
|
|
|
Income tax expense
(benefit)
|
|
2,245
|
|
|
(1,725)
|
|
|
(8,448)
|
|
|
(513)
|
|
|
669
|
|
|
(305)
|
|
|
25,663
|
|
|
(16,585)
|
|
|
Other expenses and
transaction costs
|
|
11,675
|
|
|
8,208
|
|
|
6,339
|
|
|
8,318
|
|
|
99,595
|
|
|
19,842
|
|
|
60,167
|
|
|
18,542
|
|
|
Impairment of
assets
|
|
11,031
|
|
|
14,314
|
|
|
13,631
|
|
|
-
|
|
|
-
|
|
|
9,705
|
|
|
99,821
|
|
|
13,187
|
|
|
Provision for loan
losses
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
62,966
|
|
|
10,215
|
|
|
Loss (gain) on
extinguishment of debt, net
|
|
31,356
|
|
|
(24)
|
|
|
5,515
|
|
|
33
|
|
|
-
|
|
|
-
|
|
|
371
|
|
|
17,204
|
|
|
Loss (gain) on
derivatives, net
|
|
1,224
|
|
|
-
|
|
|
736
|
|
|
-
|
|
|
324
|
|
|
(2,516)
|
|
|
-
|
|
|
68
|
|
|
General and
administrative expenses
|
|
31,101
|
|
|
45,691
|
|
|
32,632
|
|
|
39,914
|
|
|
29,913
|
|
|
36,828
|
|
|
28,365
|
|
|
32,807
|
|
|
Depreciation and
amortization
|
|
228,276
|
|
|
228,696
|
|
|
224,847
|
|
|
226,569
|
|
|
230,138
|
|
|
218,061
|
|
|
238,458
|
|
|
227,916
|
|
|
Interest
expense
|
|
118,597
|
|
|
132,960
|
|
|
116,231
|
|
|
132,326
|
|
|
122,578
|
|
|
129,699
|
|
|
127,217
|
|
|
126,360
|
|
|
Consolidated
NOI
|
|
552,129
|
|
|
597,414
|
|
|
556,747
|
|
|
617,825
|
|
|
567,486
|
|
|
605,453
|
|
|
556,353
|
|
|
583,486
|
|
|
NOI attributable to
unconsolidated investments
|
|
21,279
|
|
|
16,006
|
|
|
21,873
|
|
|
16,881
|
|
|
22,431
|
|
|
17,179
|
|
|
21,539
|
|
|
16,467
|
|
|
NOI attributable to
noncontrolling interests
|
|
(27,542)
|
|
|
(24,804)
|
|
|
(29,359)
|
|
|
(27,156)
|
|
|
(30,538)
|
|
|
(27,124)
|
|
|
(29,760)
|
|
|
(28,151)
|
|
|
Pro rata
NOI
|
|
545,866
|
|
|
588,616
|
|
|
549,261
|
|
|
607,550
|
|
|
559,379
|
|
|
595,508
|
|
|
548,132
|
|
|
571,802
|
|
|
|
Non-cash NOI
attributable to same store properties
|
|
(13,711)
|
|
|
(19,826)
|
|
|
(12,702)
|
|
|
(18,162)
|
|
|
(12,839)
|
|
|
(16,670)
|
|
|
(5,386)
|
|
|
(12,549)
|
|
|
|
NOI attributable to
non-same store properties
|
|
(70,572)
|
|
|
(97,242)
|
|
|
(62,013)
|
|
|
(102,276)
|
|
|
(73,488)
|
|
|
(108,686)
|
|
|
(85,137)
|
|
|
(101,310)
|
|
|
|
Currency and
ownership adjustments(1)
|
|
(1,815)
|
|
|
(17,279)
|
|
|
(584)
|
|
|
(19,897)
|
|
|
(4,455)
|
|
|
(15,908)
|
|
|
(4,243)
|
|
|
(12,327)
|
|
|
|
Other
adjustments(2)
|
|
648
|
|
|
(3,939)
|
|
|
(297)
|
|
|
(7,261)
|
|
|
425
|
|
|
(541)
|
|
|
1,351
|
|
|
(103)
|
|
|
Same store NOI
(SSNOI)
|
$
|
460,416
|
|
$
|
450,330
|
|
$
|
473,665
|
|
$
|
459,954
|
|
$
|
469,022
|
|
$
|
453,703
|
|
$
|
454,717
|
|
$
|
445,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seniors housing
triple-net
|
$
|
128,824
|
|
$
|
124,484
|
|
$
|
129,536
|
|
$
|
125,748
|
|
$
|
121,644
|
|
$
|
118,070
|
|
$
|
115,148
|
|
$
|
111,974
|
|
|
Long-term/post-acute
care
|
|
62,396
|
|
|
60,332
|
|
|
64,163
|
|
|
62,228
|
|
|
65,378
|
|
|
63,425
|
|
|
57,547
|
|
|
55,986
|
|
|
Seniors housing
operating
|
|
186,521
|
|
|
184,807
|
|
|
196,506
|
|
|
189,798
|
|
|
197,922
|
|
|
190,068
|
|
|
203,650
|
|
|
200,702
|
|
|
Outpatient
medical
|
|
82,675
|
|
|
80,707
|
|
|
83,460
|
|
|
82,180
|
|
|
84,078
|
|
|
82,140
|
|
|
78,372
|
|
|
76,851
|
|
|
|
|
Total
SSNOI
|
$
|
460,416
|
|
$
|
450,330
|
|
$
|
473,665
|
|
$
|
459,954
|
|
$
|
469,022
|
|
$
|
453,703
|
|
$
|
454,717
|
|
$
|
445,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Seniors housing
triple-net
|
|
3.5%
|
|
|
|
|
|
3.0%
|
|
|
|
|
|
3.0%
|
|
|
|
|
|
2.8%
|
|
|
3.1%
|
|
|
Long-term/post-acute
care
|
|
3.4%
|
|
|
|
|
|
3.1%
|
|
|
|
|
|
3.1%
|
|
|
|
|
|
2.8%
|
|
|
3.1%
|
|
|
Seniors housing
operating
|
|
0.9%
|
|
|
|
|
|
3.5%
|
|
|
|
|
|
4.1%
|
|
|
|
|
|
1.5%
|
|
|
2.5%
|
|
|
Outpatient
medical
|
|
2.4%
|
|
|
|
|
|
1.6%
|
|
|
|
|
|
2.4%
|
|
|
|
|
|
2.0%
|
|
|
2.1%
|
|
|
|
|
Total SSNOI
growth
|
|
2.2%
|
|
|
|
|
|
3.0%
|
|
|
|
|
|
3.4%
|
|
|
|
|
|
2.1%
|
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(1) Includes
adjustments to reflect consistent property ownership percentages
and foreign currency exchange rates for properties in the UK and
Canada.
|
|
|
|
(2) Includes other
adjustments described in the relevant accompanying
Supplement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As-adjusted
In-Place Net Operating Income (IPNOI) Reconciliation
|
|
|
Exhibit
6
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
4Q17
Actual
|
|
Adjustments(1)
|
|
As-adjusted
|
|
|
Annualized
IPNOI:
|
|
|
|
|
|
|
|
|
|
|
Genesis
long-term/post-acute care
|
$
|
136,257
|
|
$
|
(35,000)
|
|
$
|
101,257
|
|
|
Other
long-term/post-acute care
|
|
115,507
|
|
|
|
|
|
115,507
|
|
|
|
Total
long-term/post-acute care
|
|
251,764
|
|
|
(35,000)
|
|
|
216,764
|
|
|
Seniors housing
triple-net
|
|
523,112
|
|
|
|
|
|
523,112
|
|
|
Seniors housing
operating
|
|
888,084
|
|
|
|
|
|
888,084
|
|
|
Outpatient
medical
|
|
336,544
|
|
|
|
|
|
336,544
|
|
|
|
Total annualized
IPNOI
|
$
|
1,999,504
|
|
$
|
(35,000)
|
|
$
|
1,964,504
|
|
|
Total quarterly
IPNOI
|
|
499,876
|
|
|
|
|
|
|
|
|
IPNOI
adjustments(2)
|
|
48,256
|
|
|
|
|
|
|
|
|
Pro rata
NOI(3)
|
$
|
548,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of annualized
IPNOI:
|
|
|
|
|
|
|
|
|
|
|
Genesis % of
IPNOI
|
|
6.8%
|
|
|
-1.6%
|
|
|
5.2%
|
|
|
Total LTPAC % of
IPNOI
|
|
12.6%
|
|
|
-1.6%
|
|
|
11.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(1) Represents
adjustments to reflect master lease restructuring.
|
|
|
|
|
(2) Includes
adjustments described in accompanying Supplement.
|
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|
|
|
|
|
|
|
|
|
|
|
(3) See Exhibit 5 for
a reconciliation of pro rata NOI to net income (loss).
|
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View original content with
multimedia:http://www.prnewswire.com/news-releases/welltower-reports-fourth-quarter-2017-results-300602686.html
SOURCE Welltower Inc.