Core Insights - Welltower Inc. (WELL) reported a fourth-quarter 2024 normalized funds from operations (FFO) per share of $1.13, exceeding the Zacks Consensus Estimate by a penny and reflecting a year-over-year improvement of 17.7% [1] - The company achieved total revenues of $2.25 billion in the quarter, surpassing the Zacks Consensus Estimate of $2.12 billion, and marking a year-over-year increase of 28.6% [2] - For the full year 2024, normalized FFO per share was reported at $4.32, up from $3.64 in the previous year, although total revenues of $7.79 billion fell short of the consensus estimate of $7.91 billion, despite a year-over-year growth of 20.4% [3] Financial Performance - The same-store net operating income (SSNOI) for the total portfolio increased year over year, driven by a 23.9% growth in the seniors housing operating (SHO) portfolio [5] - The SHO portfolio's same-store revenues rose by 8.8% year over year, supported by a 310-basis point increase in average occupancy and a 5.0% growth in Revenue per Occupied Room (RevPOR) [5] - Pro-rata gross investments in the fourth quarter totaled $2.4 billion, including $2.19 billion in acquisitions and loan funding, and $233.4 million in development funding [6] Strategic Initiatives - In January 2025, the company launched a private funds management business, forming its first fund capable of sourcing up to $2 billion for investment in stable or near-stable senior housing properties in the U.S. [4] - Welltower plans to fund an additional $461 million in development for projects underway as of December 31, 2024 [10] Guidance and Outlook - For 2025, Welltower projects normalized FFO per share in the range of $4.79 to $4.95, aligning with the Zacks Consensus Estimate of $4.79 [9] - The guidance assumes an average blended SSNOI growth of 9.25-13.00%, with specific growth expectations for various segments including 15.0-21.0% in Seniors Housing Operating [9] Dividend Information - Welltower announced a cash dividend of 67 cents per share for the fourth quarter of 2024, marking the company's 215th consecutive quarterly cash dividend payout [8] Balance Sheet Position - As of December 31, 2024, Welltower had $8.7 billion in available liquidity, which includes $3.7 billion in available cash and restricted cash, along with full capacity under its $5 billion line of credit [7]

Financial Data and Key Metrics Changes - The company reported a normalized FFO per share increase of 18% year over year, driven by the senior housing operating portfolio [4][10] - Total portfolio same store NOI growth was 12.8%, with the senior housing operating portfolio achieving 23.9% growth [21][41] - The company ended the quarter with a net debt to adjusted EBITDA ratio of 3.49 times, a decrease of 1.5 turns from the end of 2023 [45] Business Line Data and Key Metrics Changes - The senior housing operating business experienced nearly 24% same store NOI growth, marking the ninth consecutive quarter of growth exceeding 20% [5][21] - The outpatient medical business showed stable performance with a year-over-year same store NOI growth of 2% [21] - The senior housing triple net portfolio had a same store NOI increase of 5.1% year over year, with EBITDAR coverage reaching a post-COVID high of 1.12 times [42] Market Data and Key Metrics Changes - The U.S. commercial real estate debt market faces significant challenges, with $1 trillion of loans maturing in 2025 [31][32] - Regional banks, which hold a significant portion of CRE debt, are experiencing difficulties due to high long-term interest rates [32][34] - The company capitalized on market dislocations, acquiring properties at attractive valuations due to other industry participants being compelled to divest assets [35][36] Company Strategy and Development Direction - The company is focused on capital deployment, having closed $7 billion in transactions in 2024, with a strong start to 2025 already seeing $2 billion in acquisitions under contract [9][14] - The company emphasizes a capital light strategy, transitioning properties to stronger operating partners to enhance cash flow [15][44] - A sixth growth pillar was introduced with the launch of a private funds management business, expected to create significant revenue opportunities [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued growth in 2025, citing strong fundamentals in the senior housing sector and favorable demographic trends [4][12] - The company anticipates sustained improvement in margins due to high operating leverage and the benefits of its operating platform build-out [8][26] - Management highlighted the importance of retaining talent and fostering a strong company culture as key to long-term success [70][72] Other Important Information - The company achieved 23% revenue growth, 26% EBITDA growth, and nearly 20% FFO per share growth for the full year of 2024 while deleveraging its balance sheet [10][45] - The company is actively working on digital transformation initiatives to enhance operational efficiency and improve resident and employee experiences [16][29] Q&A Session Summary Question: Can you provide insights on pricing power across occupancy bands within the Shaw portfolio and details on the $2 billion acquisitions pipeline? - The $2 billion acquisitions involve assets with low 80s occupancy, generally newer vintage assets [61] - For assets over 90% occupied, RevPAR growth has been in the sixes, while those below 70% are roughly flat [62][63] Question: With fewer deliveries in the development cycle, does this make acquiring lease-up properties more challenging? - The company maintains a long-term track record of success in finding underperforming buildings, indicating a continued ability to optimize NOI [66][68] Question: How does the company approach talent retention? - Retaining talent is a top priority, with a strong emphasis on creating a culture of trust and shared purpose [70][72] Question: Can you discuss the targeted IRRs for stabilized versus non-stabilized assets in the private funds management business? - No specific details were provided on targeted IRRs, but the company emphasizes its focus on growth investments rather than yield investments [77] Question: How large will the same store bucket of assets be this year versus the total pool? - By the fourth quarter, over 90% of the current portfolio is expected to be in the same store pool, with non-same store assets showing potential for better NOI growth as occupancy increases [80][83]

Revenue Segments - The Seniors Housing Operating segment accounted for 76% of total revenues for the year ended December 31, 2024, with key partners contributing 13%, 11%, and 11% of segment revenues [34]. - The Triple-net segment represented 10% of total revenues for the year ended December 31, 2024, with revenues from Integra Healthcare Properties accounting for approximately 27% of this segment [39]. - The Outpatient Medical segment contributed 10% of total revenues for the year ended December 31, 2024, with no single tenant exceeding 20% of segment revenues [42]. Investments and Financials - As of December 31, 2024, the company had outstanding construction investments of $1,219,720,000 and was committed to provide an additional $540,297,000 to complete construction for consolidated investment properties [45]. - The company had outstanding loans, net of allowances, of $2,027,586,000 with an interest yield of approximately 10.3% per annum as of December 31, 2024 [46]. - Investments in unconsolidated entities amounted to $1,768,772,000 as of December 31, 2024, representing interests ranging from 10% to 95% in real estate assets [47]. Portfolio Composition - The outpatient medical portfolio primarily consists of multi-tenant properties leased to healthcare providers, with 63% of leases including full pass-through expense reimbursement [41]. - Approximately 96% of the company's triple-net properties were subject to master leases as of December 31, 2024, which helps spread risk among the entire group of properties [38]. - The company focuses on diversifying its investment portfolio by property type, relationship, and geographic location to enhance operational efficiency [43]. Employee and Workplace Initiatives - The company had 685 employees as of December 31, 2024, with 653 located in the U.S., 20 in the U.K., and 12 in Canada [63]. - The company has implemented a four-day in-office workweek to enhance collaboration while supporting a geographically dispersed workforce [71]. - The company has invested in career-pathing tools and workforce planning systems to align individual goals with broader business objectives [64]. - The company has launched an AI-based manager development program to enhance leadership decision-making capabilities [66]. - The company supports employee charitable contributions with a 100% match up to $2,500 per employee per calendar year [61]. Sustainability and ESG Initiatives - The company achieved a MSCI ESG rating of AA and was recognized as an ENERGY STAR Partner of the Year for the sixth consecutive year [60]. - The company has maintained top 30% ISS Quality Score ranking for both Environment and Social categories [60]. - The company is focused on reducing greenhouse gas emissions, energy consumption, water usage, and waste production as part of its sustainability initiatives [57]. Regulatory and Compliance Challenges - The company has faced competition from various entities including real estate investment trusts, private equity, and healthcare operators in the acquisition and development of properties [53]. - The majority of revenues for U.S. seniors housing facilities come from private pay sources, with Medicaid being a secondary source, which may vary by state and affect revenue stability [78]. - Long-term/post-acute care facilities primarily rely on Medicare and Medicaid reimbursements, with potential adverse effects from changes in federal or state reimbursement policies [78]. - The implementation of the Final Rule by CMS in April 2024 is estimated to cost long-term care facilities a total of $43 billion over the next ten years due to new staffing requirements [79]. - The OIG published compliance program guidance for Skilled Nursing Facilities in November 2024, focusing on risk areas and compliance with federal regulations [80]. - The U.S. Supreme Court's ruling on agency interpretations may lead to increased litigation and scrutiny of healthcare regulations, potentially impacting operators' business [79]. - Changes in Medicare reimbursement for physicians and outpatient facilities may result in lower net pay increases, affecting operators' financial health [79]. - The costs associated with compliance to data privacy laws, including HIPAA, can significantly impact operators' financial obligations [82]. - In Canada, senior living residences are subject to varying provincial regulations, with significant penalties for privacy law violations, including up to CAD $25 million for certain breaches [85]. - The company faces potential financial penalties and operational impacts due to increased enforcement actions and compliance requirements in the healthcare sector [81]. REIT Compliance and Taxation - The company intends to continue operating as a REIT, but there is no assurance it will maintain this status [89]. - The company is subject to a 100% tax on certain transactions involving taxable REIT subsidiaries not conducted at arm's length [91]. - The company must distribute at least 90% of its REIT taxable income to avoid federal income tax on undistributed amounts [90]. - At least 75% of the company's gross income must be derived from rents from real property, dividends, or gains from the sale of REIT shares to meet the 75% gross income test [100]. - The company has undergone a reorganization, changing its name and structure to comply with tax regulations [88]. - The company must comply with various income and asset tests to qualify as a REIT, including the Five or Fewer Requirement [97]. - The company has acquired assets from "C" corporations and may face built-in gains tax if these assets are sold within five years [91]. - The company must ensure that rents received do not exceed 15% of total rent for personal property to qualify as rents from real property [100]. - The company is treated as a continuation of Old Welltower for U.S. federal income tax purposes following the reorganization [88]. - The company will be subject to a 4% excise tax if it fails to distribute required amounts of REIT ordinary income and capital gain net income [90]. - The company must satisfy several asset tests, including that at least 75% of total assets must be represented by real estate assets [103]. - The company is required to make distributions at least equal to 90% of its REIT taxable income to avoid being taxed as a regular corporation [115]. - If the company fails to qualify as a REIT, it will be subject to U.S. federal income tax at regular corporate rates, reducing cash available for distribution [118]. - The company may avoid disqualification as a REIT by disposing of sufficient assets to cure violations of the asset tests within six months [107]. - Taxable REIT subsidiaries are subject to full corporate level U.S. federal taxation on their earnings, which reduces cash available for dividends [109]. - The company may face a 15% Corporate Alternative Minimum Tax if its taxable REIT subsidiaries exceed average adjusted financial statement income of $1 billion [112]. - Statutory relief is available for violations of REIT provisions if the violation is due to reasonable cause and not willful neglect, along with a penalty payment [119]. - The company must file a schedule with the IRS describing non-qualifying assets to avoid disqualification as a REIT [108]. - The company may need to arrange for borrowings or pay dividends in the form of taxable stock dividends to meet distribution requirements [116]. - The IRS may redetermine amounts from transactions between the company and its taxable REIT subsidiaries if there is a lack of arm's-length dealing [110]. Tax Implications for Holders - Distributions from the company will be treated as dividends and taxable as ordinary income for taxable U.S. holders when received [125]. - Distributions exceeding current and accumulated earnings will be treated as a tax-free return of capital to the extent of the U.S. holder's adjusted tax basis [126]. - Capital gain dividends will be taxable as a gain from the sale of a capital asset held for more than one year, with U.S. holders required to treat up to 20% of certain capital gain dividends as ordinary income [128]. - The maximum tax rate for non-corporate taxpayers for long-term capital gains is generally 20%, with certain capital gain dividends potentially taxed at a 25% rate [136]. - Tax-exempt U.S. holders may have income from the company treated as unrelated business taxable income (UBTI) if shares are held as "debt-financed property" [137]. - Non-U.S. holders are advised to consult tax advisors regarding the complex rules governing U.S. federal income taxation of the acquisition, ownership, and disposition of the company's stock [140]. - The company may elect to retain net capital gains rather than distribute them as capital gain dividends, which would affect U.S. holders' earnings and profits [129]. - U.S. holders that receive taxable stock distributions must include the full amount as a dividend to the extent of current and accumulated earnings [127]. - The treatment of distributions as a return of capital will reduce the U.S. holder's adjusted tax basis in the shares [126]. - The company does not expect to be classified as a "pension-held REIT," which may affect the tax treatment of dividends for certain trusts [139]. - Distributions to non-U.S. holders are generally subject to a 30% U.S. federal income tax withholding unless a lower treaty rate applies or the distribution is effectively connected with a U.S. trade or business [142]. - Distributions exceeding current and accumulated earnings and profits will not be taxable to non-U.S. holders to the extent they do not exceed the adjusted tax basis of the holder's stock [143]. - Capital gain dividends designated for non-U.S. holders are generally not subject to U.S. federal income taxation unless the investment is effectively connected with a U.S. trade or business [144]. - Under FIRPTA, distributions attributable to gain from sales of U.S. real property interests will be subject to a 21% withholding tax for non-U.S. holders [145]. - Non-U.S. holders may offset their U.S. federal income tax liability with their proportionate share of tax paid on retained net capital gains [146]. - Gain from the sale of stock by non-U.S. holders is generally not subject to U.S. federal income tax unless the stock constitutes a U.S. real property interest [147]. - Non-U.S. holders are exempt from FIRPTA if they are qualified foreign pension funds [149]. - If a non-U.S. holder disposes of stock within 30 days preceding the ex-dividend date, they may be treated as having gain from the sale of a U.S. real property interest [150]. - Interest paid on debt securities to non-U.S. holders is generally not subject to U.S. federal income tax if not effectively connected with a U.S. trade or business [156]. - Non-U.S. holders may be exempt from U.S. federal withholding tax on interest if it is effectively connected with their U.S. trade or business, requiring a valid IRS Form W-8ECI [157]. - Effectively connected interest is subject to U.S. federal income tax at regular rates, and corporations may face a branch profits tax of 30% [158]. - Non-U.S. holders must provide required certifications to the withholding agent prior to interest payment to avoid excess withholding [159]. - Non-U.S. holders are not subject to U.S. federal income tax on gains from the sale of debt securities unless the gain is effectively connected with a U.S. trade or business [160]. - A non-U.S. holder that is a corporation may be subject to a branch profits tax of 30% on effectively connected gains [161]. - Non-U.S. holders may offset U.S. source capital losses against gains realized from the sale of debt securities [162]. - Payments of dividends and interest to non-U.S. holders generally will not be subject to backup withholding if proper certifications are provided [165]. - A 30% withholding tax may apply under FATCA on certain payments to non-U.S. financial institutions unless specific diligence and reporting obligations are met [168]. - Proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds from the sale of stock or debt securities [170]. Financial Risk Management - Welltower OP seeks to mitigate interest rate exposure by matching new investments with long-term fixed-rate borrowings [403]. - A 1% increase in interest rates would result in increased annual interest expense of $14,253,000 for variable-rate debt outstanding at December 31, 2024 [406]. - Currency fluctuations could affect net income from investments in Canada and the U.K., with a potential impact of less than $15,000,000 from a 10% change in exchange rates [407]. - The carrying value of foreign currency exchange contracts as of December 31, 2024, is $99,931, with a change in fair value of $3,077 [407].

Core Insights - Welltower reported $2.25 billion in revenue for Q4 2024, a year-over-year increase of 28.6% [1] - The EPS for the same period was $1.13, compared to $0.15 a year ago, indicating significant growth [1] - The revenue exceeded the Zacks Consensus Estimate of $2.12 billion by 6.02% [1] - The company also delivered an EPS surprise of 0.89%, with the consensus estimate being $1.12 [1] Financial Performance Metrics - Interest income was reported at $71.03 million, surpassing the average estimate of $67.95 million, reflecting a year-over-year change of 39.2% [4] - Resident fees and services revenue reached $1.76 billion, exceeding the $1.55 billion average estimate, with a year-over-year increase of 39.5% [4] - Rental income was reported at $386.33 million, below the estimated $415.47 million, showing a decline of 4.4% year over year [4] - Other income was $31.60 million, compared to the average estimate of $24.23 million, representing a slight decrease of 0.7% year over year [4] - Net Earnings Per Share (Diluted) was $0.19, below the average estimate of $0.40 [4] Stock Performance - Welltower's shares have returned 13.8% over the past month, outperforming the Zacks S&P 500 composite's 4.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Core Insights - Welltower (WELL) reported quarterly funds from operations (FFO) of $1.13 per share, exceeding the Zacks Consensus Estimate of $1.12 per share, and up from $0.96 per share a year ago [1][2] - The company achieved revenues of $2.25 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.02%, compared to $1.75 billion in the same quarter last year [3] - Welltower has consistently outperformed consensus estimates, surpassing FFO estimates in all four of the last quarters and revenue estimates three times in the same period [2][3] Financial Performance - The FFO surprise for the recent quarter was 0.89%, and the company had a previous quarter FFO of $1.11, which was also above expectations by 6.73% [2] - The current consensus FFO estimate for the upcoming quarter is $1.15 on revenues of $2.21 billion, and for the current fiscal year, it is $4.79 on revenues of $8.93 billion [8] Market Position - Welltower shares have increased approximately 13.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 3.1% [4] - The Zacks Rank for Welltower is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [7] Industry Context - The REIT and Equity Trust - Other industry, to which Welltower belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, which may impact stock performance [9] - The performance of Welltower may also be influenced by the overall outlook for the industry, as empirical research indicates a strong correlation between stock movements and estimate revisions [6][9]

Financial Performance - Total NOI for 4Q23 was $509,429,000, projected to increase to $574,859,000 in 4Q24, representing a 12.8% growth[4] - Total revenues for Q4 2023 reached $1,284,698, increasing to $1,808,025 by Q4 2024, representing a growth of approximately 40.7%[10] - Net income for the twelve months ended December 31, 2024, was $972,857,000, with a quarterly net income of $123,753,000[54] - EBITDA for the twelve months ended December 31, 2024, was $3,181,911,000, with a quarterly EBITDA of $758,742,000[54] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $3,151,811,000, with a quarterly adjusted EBITDA of $853,085,000[54] - Consolidated net operating income (NOI) for Q4 2023 was $713,697,000, expected to rise to $841,530,000 by Q4 2024[87] - Same store NOI for Q4 2024 is projected to grow by 12.8% year-over-year, reaching $574,859,000[94] Property Operations - Seniors Housing Operating properties achieved a 4Q23 NOI of $240,443,000, with a projected increase to $297,809,000 in 4Q24, reflecting a 23.9% increase[4] - Outpatient Medical properties reported a 4Q23 NOI of $127,636,000, expected to rise to $130,186,000 in 4Q24, a 2.0% increase[4] - The occupancy rate for Seniors Housing Operating properties was 86.1%, while Outpatient Medical properties had a higher occupancy rate of 94.3%[5] - Total occupancy improved from 82.2% in Q4 2023 to 84.8% in Q4 2024, indicating a growth of 3.2 percentage points[10] - The company operates a total of 2,073 properties, with 1,754 located in the United States, representing 83.6% of the total portfolio[9] Revenue and Expense Trends - Same store revenues increased from $1,016,211 in Q4 2023 to $1,105,708 in Q4 2024, reflecting a year-over-year growth rate of 8.8%[10] - The NOI margin for the total portfolio is projected to be 24.4% in Q4 2024, down from 23.6% in Q4 2023[10] - Recurring capital expenditures are expected to rise from $49,297 in Q4 2023 to $75,822 in Q4 2024, an increase of 53.9%[10] - The company reported a total of 2,271 properties, with 1,557 classified as same store properties[89] Investment and Development - The total gross investments for the period reached $2,419,409,000, with an acquisition yield of 8.2%[28] - The company completed 62 acquisitions and loan funding transactions, totaling $2,186,059,000 in Q4 2024[28] - The company has committed $1,654,180 for future funding across 33 seniors housing operating projects, with stable yields projected at 7.5%[40] - The company has 60 development projects in progress, including 45 seniors housing operating projects and 15 outpatient medical projects[38] - The estimated conversion for development projects in 2024 is projected at $3,047,717, with stable yields averaging 7.3%[41] Debt and Equity - Total debt stands at $16,702,077,000, with senior unsecured notes accounting for $13,326,465,000[44] - The company reported a total equity of $32,572,586,000, which is 73.25% of consolidated book capitalization[57] - The weighted average interest rate on total debt was 3.86%[60] - Net debt to EBITDA ratio was 3.92x, and net debt to adjusted EBITDA ratio was 3.49x[54] Market Strategy and Future Outlook - Future growth strategies include potential market expansions and new product developments to enhance service offerings[3] - The company anticipates continued market expansion and investment in innovative care delivery models to enhance healthcare infrastructure[107] - The company plans to continue expanding its market presence through strategic acquisitions and development conversions[90] - Welltower operates in major high-growth markets across the United States, Canada, and the United Kingdom, focusing on seniors housing and post-acute communities[107]

TOLEDO, Ohio, Feb. 11, 2025 /PRNewswire/ -- Welltower Inc. (NYSE:WELL) today announced results for the quarter ended December 31, 2024.Fourth Quarter and Other Recent Highlights Reported net income attributable to common stockholders of $0.19 per diluted share Reported quarterly normalized funds from operations attributable to common stockholders of $1.13 per diluted share, an increase of 17.7% over the prior year Reported total portfolio year-over-year same store NOI ("SSNOI") growth of 12.8%, driven by SS ...

Core Insights - Two stocks in the real estate sector, Zillow Group Inc and Welltower Inc, are identified as potentially overbought, which may signal caution for momentum-focused investors [1][2]. Company Summaries - **Zillow Group Inc (ZG)**: - Recently maintained a Buy rating by Benchmark analyst Daniel Kurnos, with a price target increase from $80 to $100 - The stock has appreciated approximately 25% over the past month, reaching a 52-week high of $85.89 - Current RSI value is 75, indicating overbought conditions - Price action shows shares gained 1% to close at $85.29 on the latest trading day [4]. - **Welltower Inc (WELL)**: - Announced the acquisition of NorthStar Healthcare Income, Inc. for $3.03 per share in a $900 million transaction - The stock has increased around 14% over the past month, with a 52-week high of $143.84 - Current RSI value is 70.8, also indicating overbought conditions - Price action shows shares gained 0.4% to close at $143.11 on the latest trading day [4].

Analysts on Wall Street project that Welltower (WELL) will announce quarterly earnings of $1.12 per share in its forthcoming report, representing an increase of 16.7% year over year. Revenues are projected to reach $2.12 billion, increasing 21.3% from the same quarter last year.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 0.2% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this peri ...

Welltower, Inc. (WELL) recently announced that its affiliate plans to acquire NorthStar Healthcare and its portfolio of 40 senior living communities in an all-cash transaction for approximately $900 million.The proposed acquisition, subject to customary closing conditions, is expected to close in the first half of 2025. The acquisition has been unanimously approved by NorthStar Healthcare's board of directors, while shareholders of NorthStar Healthcare will vote on the merger at a special meeting. The merge ...