Welltower(US:WELL)2020-05-08 02:21Financial Data and Key Metrics Changes - Welltower reported normalized FFO of $1.02 per diluted share for Q1 2020, which included $7 million or approximately $0.02 per diluted share of unanticipated property level costs related to COVID-19 [20] - The company withdrew its 2020 guidance on April 17 due to the impact of COVID-19 on occupancy and expenses [12][19] - The company expects occupancy declines to continue throughout Q2, projecting a decrease of 500 to 600 basis points by June 30 [25] Business Line Data and Key Metrics Changes - The Seniors Housing Triple-Net portfolio delivered 3% year-over-year same-store growth, with occupancy and EBITDAR coverages flat sequentially [21] - The long-term post-acute portfolio generated 2.6% year-over-year same-store growth, with EBITDAR coverage declining by three basis points sequentially [21] - The Seniors Housing operating portfolio experienced a year-over-year same-store NOI decline of 1.6% due to COVID-19 impacts [24] Market Data and Key Metrics Changes - Rent collection across Triple-Net segments was consistent with historical norms in Q1, with 97% of total rents due collected in April [22] - The outpatient medical portfolio delivered 2.1% same-store growth, with 95% of rent due either collected or approved for deferral [23] - Total portfolio occupancy fell 240 basis points in April compared to a 70 basis point decline in March, primarily due to admission bans [25] Company Strategy and Development Direction - The company remains committed to its long-term strategy of being a key real estate partner in the healthcare continuum, focusing on the health and wellness needs of vulnerable seniors [15][17] - Welltower is taking steps to manage uncertainty, including reducing G&A expenses by approximately $10 million to $15 million on an annualized basis [13] - The company plans to pay 70% of its pre-COVID dividend, reflecting a data-driven decision to preserve liquidity [14][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of COVID-19 on business operations and expressed hope for stabilization as infection curves flatten [49][92] - The company is focused on maintaining financial flexibility and liquidity during this uncertain period, with approximately $3.7 billion in liquidity available [30][31] - Management emphasized the importance of adapting to changes in the operating environment and maintaining a long-term perspective on value creation [57][58] Other Important Information - The company completed $398 million of acquisitions in Q1 at a blended yield of 5.6% and anticipates $386 million of property sales for the remainder of the year [32][33] - Welltower's corporate overhead expectations for the full year have been lowered to between $125 million to $130 million, down from prior guidance of $140 million [37] - The Board recognized Shankh Mitra as Vice Chairman and COO, and Tim McHugh as Executive Vice President, reflecting their leadership during challenging times [61] Q&A Session Summary Question: Clarification on occupancy trends and move-in restrictions - Management indicated that while occupancy is expected to decline by 500 to 600 basis points in Q2, some communities are beginning to open for new admissions, but uncertainty remains [66][68] Question: Understanding the dividend reset - The dividend cut to $0.61 per share is tied to taxable net income expectations and short-term cash flow considerations [71][73] Question: Performance of the Triple-Net portfolio relative to the SHO portfolio - Management expects the performance of the Triple-Net portfolio to be similar to the SHO portfolio, with strong rent collections so far [75][77] Question: Future of hospital investments and potential consolidation - Management believes there are still too many hospitals in the U.S. and anticipates continued consolidation in the sector [109]