Welltower(US:WELL)2025-10-28 13:03Financial Performance - For the nine months ended September 30, 2025, resident fees and services and rental income represented 77% and 19% of total revenues, respectively [183]. - For the three months ended September 30, 2025, net income was $282,186 thousand, a decrease of 7.3% from $304,618 thousand in the previous quarter [195]. - Funds from Operations (FFO) for the same period was $824,375 thousand, remaining relatively stable compared to $825,717 thousand in the prior quarter [195]. - Net income for the three months ended September 30, 2025, was $282,186,000, a decrease of 38% compared to $456,800,000 in the same period of 2024 [225]. - Funds from Operations (FFO) increased by 30% to $824,375,000 for the three months ended September 30, 2025, compared to $635,817,000 in 2024 [225]. - Consolidated Net Operating Income (NOI) for the nine months ended September 30, 2025, was $3,102,874, up 33.7% from $2,319,377 in 2024 [257]. - Net income attributable to common stockholders for the nine months ended September 30, 2025, was $840,404, compared to $831,709 for the same period in 2024, reflecting a slight increase of 0.83% [256]. Property Acquisitions and Sales - Welltower completed property acquisitions totaling $5.28 billion across 239 properties, with an average capitalization rate of 7.1% [188]. - A definitive agreement was announced to acquire a portfolio of 38 seniors housing communities for C$4.6 billion, expected to close in early 2026 [189]. - Subsequent to September 30, 2025, Welltower entered into agreements to acquire a U.K. portfolio of seniors housing real estate for £5.2 billion and the HC-One Group portfolio for £1.2 billion [190]. - A definitive agreement was made to sell a portfolio of 319 outpatient medical properties for approximately $7.2 billion, with net proceeds expected to be around $6.0 billion [196]. Debt and Liquidity - The company extinguished $288.5 million of secured debt at an average interest rate of 5.37% and assumed $469.1 million of secured debt at an average interest rate of 4.45% during the nine months ended September 30, 2025 [187]. - As of September 30, 2025, Welltower had $6.81 billion in cash and cash equivalents and $5 billion in available borrowing capacity under its unsecured revolving credit facility [186]. - The company maintains sufficient liquidity to fund its cash uses for the next twelve months, supported by various sources including resident fees and investment dispositions [201]. - The company plans to manage its capital structure to maintain compliance with debt covenants and mitigate risks associated with potential downgrades in credit ratings [213]. - The net debt to book capitalization ratio improved to 20% as of September 30, 2025, down from 24% in the previous quarter [197]. Revenue and Income Growth - Total revenues for the Seniors Housing Operating segment increased by 37% to $2,070,115,000 for the three months ended September 30, 2025, compared to $1,514,022,000 in 2024 [226]. - Average occupancy in the Seniors Housing Operating segment increased to 86.9% as of September 30, 2025, up from 83.8% in the same period of 2024 [226]. - Total revenues for the Triple-net segment increased by 25% to $286,637,000 for the three months ended September 30, 2025, compared to $228,649,000 for the same period in 2024 [232]. - Rental income for the Triple-net segment rose by 26% to $286,353,000 for the three months ended September 30, 2025, up from $227,531,000 in the prior year [232]. Operational Metrics - The property mix for Seniors Housing Operating increased to 57% in Q3 2025, compared to 51% in Q3 2024 [198]. - Operating lease expirations indicate that 68.4% of base rent is due thereafter, highlighting long-term revenue stability [199]. - The company recorded impairment charges of $36,922,000 related to nine properties during the nine months ended September 30, 2025, compared to $65,996,000 for 14 properties in the same period of 2024 [227]. - The company completed 22 construction projects with an anticipated remaining funding of $430,287,000 as of September 30, 2025 [229]. Shareholder Returns - The company declared a cash dividend of $0.74 per share for the quarter ended September 30, 2025, marking the 218th consecutive quarterly cash dividend [192]. - The company has a Stock Repurchase Program approved for up to $3,000,000,000 of common stock, with no shares repurchased during the three months ended September 30, 2025 [286]. Market and Economic Factors - The company is exposed to currency fluctuations, with a potential impact of less than $28,000,000 on annualized net income from a 10% change in exchange rates for investments in Canada and the UK [276]. - A 1% increase in interest rates would result in an increased annual interest expense of $20,550,000 for variable rate debt outstanding of $2,055,045,000 as of September 30, 2025 [275].