Welltower Inc. · NYSE:WELL
Welltower — Corporate Update (September 2023)
36 slides from Welltower's corporate update, Sep 11, 2023
Slide 1: Business Update September 11, 2023
Exhibit 99.1 Business Update September 11, 2023
Slide 2: Forward Looking Statements and Risk Factors
Forward Looking Statements and Risk Factors 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,” “estimat
Slide 3: Recent Highlights – Since Previous Business Update on July 31, 2023
Recent Highlights – Since Previous Business Update on July 31, 2023 (1) 2023 Guidance Update Seniors Housing Operating Portfolio – 3Q2023 Update • Strengthening seniors housing fundamentals driving continued momentum during peak leasing season Raised 2023 guidance range for normalized funds from ope
Slide 4: Capital Allocation (Unchanged since prior update)
Capital Allocation (Unchanged since prior update)
Slide 5: Macroeconomic Backdrop Resulting in Acceleration in Motivated Sellers
•Dramatic increase in interest rates over the past 18 months has resulted in prohibitively expense floating rate debt cost for seniors housing owner-operators Macroeconomic Backdrop Resulting in Acceleration in Motivated Sellers Per previous business update issued July 31, 2023 Extraordinary Opportu
Slide 6: Acquisitions Since 4Q2020
Acquisitions Since 4Q2020 Per previous business update issued July 31, 2023 (1) Capital Deployment Volume ✓ Initial yield of 5.9%; Stable yield of approximately 7.9% ✓ Low last-dollar exposure and innovative structure offer downside protection GROSS INVESTMENTS $9.3B✓ Expected to generate high-singl
Slide 7: Senior Housing Trends (Unchanged since prior update)
Senior Housing Trends (Unchanged since prior update)
Slide 8: Favorable Unit Economics Driving Substantial Margin Expansion
Favorable Unit Economics Driving Substantial Margin Expansion Per previous business update issued July 31, 2023 (1) Unit Revenue and Expense Trends Same Store RevPOR Same Store ExpPOR 14.0% RevPOR growth continues to 12.0% outpace ExpPOR growth, driving +290 bps of SS NOI margin (1) RevPOR (Unit Rev
Slide 9: Pre-COVID Occupancy Seasonality
Pre-COVID Occupancy Seasonality Per previous business update issued July 31, 2023 Majority of annual occupancy gains have historically been generated in the second half of the year (1) SHO Portfolio Same Store Sequential Occupancy Change 2014 - 2019 Pre Max -Cov chaing d M eax Pre Mi-Cov n cha idng
Slide 10: Seniors Housing | Compelling Backdrop for Multi-Year Revenue Growth
Seniors Housing | Compelling Backdrop for Multi-Year Revenue Growth Per previous business update issued July 31, 2023 Accelerating 80+ Population Growth Coinciding with Diminishing New Supply & Improved Affordability US 80+ Population Growth Seniors Housing Net Inventory Growth Seniors Housing Affor
Slide 11: Minimal New Supply in Coming Years Sets Stage For Multi-Year Occupancy Gains
Minimal New Supply in Coming Years Sets Stage For Multi-Year Occupancy Gains Per previous business update issued July 31, 2023 Declining Deliveries Amplified by Elevated Level of Units Coming out of Service TTM Deliveries (% Total Inventory) Obsolescence Net Inventory Growth TTM Deletions (% Invento
Slide 12: Supply-Demand Imbalance Expected to Support Sustained Occupancy Growth
Supply-Demand Imbalance Expected to Support Sustained Occupancy Growth in 2023+ Per previous business update issued July 31, 2023 Seniors Housing Demand Remains Robust…. ….While Supply Continues to Decline Rapidly (1) (1) TTM Absorption Construction Pipeline NIC MAP Primary and Secondary Markets NIC
Slide 13: Global Financial Crisis Case Study
Global Financial Crisis Case Study Per previous business update issued July 31, 2023 Resilient Demand During GFC Driven By Needs-Based Nature of Seniors Housing TTM Market Rent Growth Existing Home Sales Seniors Housing Average Occupancy 7.0 4.0% 95% Seniors housing occupancy remained stable 6.5 2.0
Slide 14: SHO Portfolio | Path to Recovery
SHO Portfolio | Path to Recovery Per previous business update issued July 31, 2023 Category NOI ($M) $415 million embedded NOI growth in return to Pre-COVID levels (1) A) 2Q23 Total Portfolio - IPNOI Portfolio 1,043 $1,500M B) Revera JV Ownership Increase 16 $89 $1,400M C) 2Q23 Total Portfolio – Pro
Slide 15: Balance Sheet (Unchanged since prior update)
Balance Sheet (Unchanged since prior update)
Slide 16: Recent Balance Sheet & Liquidity Highlights
Recent Balance Sheet & Liquidity Highlights Per previous business update issued July 31, 2023 Balance Sheet Highlights Liquidity Highlights • Liquidity profile remains exceptional with $7.6 billion in combined near-term • Significantly de-levered the balance sheet over the past 12 months with Net De
Slide 17: Plurality of Capital Sources
Plurality of Capital Sources Per previous business update issued July 31, 2023 Leveraging Efficient & Low-Cost Capital to Execute Investment Strategy ✓ Pivot between multiple sources of capital ✓ Access to secured and unsecured ✓ Recycle capital to improve portfolio quality debt financing based upon
Slide 18: Well-Laddered Debt Maturity Schedule
(1,2,3) Well-Laddered Debt Maturity Schedule Per previous business update issued July 31, 2023 $7,000 Weighted Average Maturity of 6.0 Years USD Unsecured USD Secured GBP Unsecured CAD Unsecured CAD Secured WAI Weighted average interest rate $6,000 Current liquidity profile includes $2.7 billion of
Slide 19: Welltower Regional Density Strategy
Welltower Regional Density Strategy Deepening Relationships with Best-in-Class Local & Regional Operators Case studies (Unchanged since prior update)
Slide 20: Case Studies | Regional Densification Strategy
Case Studies | Regional Densification Strategy Per previous business update issued July 31, 2023 Data Science Driven Active Portfolio Management and Disciplined Capital Allocation Driving Regional Densification • Welltower continues to take an active approach to portfolio management, deepening relat
Slide 21: Case Study Cogir
Case Study 1 Cogir Case Study Per previous business update issued July 31, 2023 Transition of properties to Cogir has resulted in dramatic NOI growth and margins in excess of 50% • In early 2022, Welltower purchased a portfolio of eight communities from Regency Retirement Resorts for Vernon approxim
Slide 22: Case Study Oakmont Senior Living – History of Success
Case Study 2 Oakmont Senior Living – History of Success Per previous business update issued July 31, 2023 Oakmont meaningfully outperformed during the pandemic; Ivy Living brand created to leverage success across transition properties Relationship Overview | 64 Welltower Communities Same Store Portf
Slide 23: Case Study | Portfolio Transition to Oakmont
Case Study 2 Case Study | Portfolio Transition to Oakmont Per previous business update issued July 31, 2023 Transitioned Six Communities to Oakmont from Sunrise; Meaningful Value Creation Recognized through Improved Performance Predicted Performance Spot occupancy has increased 2,500 bps since the t
Slide 24: Supplemental Financial Measures
Supplemental Financial Measures
Slide 25: 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 Funds from Operations ( FFO ),
Slide 26: 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 27: Earnings Outlook Reconciliation
Earnings Outlook Reconciliation (in millions, except per share data) Year Ended December 31, 2023 Prior Outlook Current Outlook Low High Low High FFO Reconciliation: Net income attributable to common stockholders $ 374 $ 430 $ 385 $ 431 (1,2) Impairments and losses (gains) on real estate disposition
Slide 28: NOI, IPNOI, SSNOI, RevPOR, ExpPOR Definitions
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 29: In-Place NOI Reconciliations
In-Place NOI Reconciliations (dollars in thousands) 2Q23 In-Place NOI by property type 2Q23 % of Total Net income (loss) $ 106,342 Seniors Housing Operating $ 1,072,692 49 % Loss (gain) on real estate dispositions, net 2,168 Seniors Housing Triple-net 396,116 18 % Loss (income) from unconsolidated e
Slide 30: SSNOI Reconciliation
SSNOI Reconciliation ( (d do oll lla ar rs s i in n t th ho ou us sa an nd ds s) ) T Th hr re ee e M Mo on nt th hs s E En nd de ed d J Ju un ne e 3 30 0,, 2022 2022 2023 2023 % % g gr ro ow wtth h Y YO OY Y N Ne ett iin nc co ome me ( (llo os ss s) ) $ $ 9 95 5,,6 67 72 2 $ $ 1 10 06 6,,3 34 42 2 L
Slide 31: SHO RevPOR Growth Reconciliation
SHO RevPOR Growth Reconciliation (dollars in thousands, except SS RevPOR and units) June 30, 2022 June 30, 2023 SHO SS RevPOR Growth Consolidated SHO revenues $ 1,071,210 $ 1,164,439 (1) Unconsolidated SHO revenues attributable to WELL 51,456 63,041 (2) SHO revenues attributable to noncontrolling in
Slide 32: SHO SS ExpPOR Growth Reconciliation
SHO SS ExpPOR Growth Reconciliation (dollars in thousands, except SS ExpPOR and units) June 30, 2022 June 30, 2023 SHO SS ExpPOR Growth Consolidated SHO property operating expenses $ 789,299 $ 885,187 (1) Unconsolidated SHO expenses attributable to WELL 39,657 49,411 (2) SHO expenses attributable to
Slide 33: SHO SSNOI Growth Reconciliation
SHO SSNOI Growth Reconciliation (dollars in thousands) United States United Kingdom Canada Total 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 SHO SSNOI Growth Consolidated SHO NOI $ 237,393 $ 229,006 $ 16,579 $ 17,497 $ 27,939 $ 32,749 $ 281,911 $ 279,252 (1) Unconsolidated SHO NOI attributable to WELL 4
Slide 34: 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 35: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA (dollars in thousands) Three Months Ended Three Months Ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022 (2) Net income $ 106,342 $ 95,672 Total debt $ 16,040,530 $ 15,144,432 Interest expense 152,337 127,750 Cash and cash equivalents and restricted cash (2,29
Slide 36: Net Debt to Consolidated Enterprise Value
Net Debt to Consolidated Enterprise Value (in thousands, except share price) Three Months Ended June 30, 2023 Common shares outstanding 508,159 Period end share price $ 80.89 Common equity market capitalization $ 41,104,982 (1) Total debt $ 16,040,530 Cash and cash equivalents and restricted cash (2