Welltower Inc. (NYSE:HCN.PRJ) Q2 2016 Earnings Conference Call - Preliminary Transcript

Aug 02, 2016 • 10:00 am ET


Welltower Inc. (NYSE:HCN.PRJ) Q2 2016 Earnings Conference Call - Preliminary Transcript


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Good morning, ladies and gentlemen, and welcome to the Second Quarter 2016 Welltower Earnings Conference Call. My name is Kayla and I will be your operator today. At this time, all participants are in a listen-only mode. I will be facilitating a question-and-answer session towards the end of this call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. Now I'd like to turn the call over to Jeff Miller, Executive Vice President and Chief Operting Officer. Please go ahead, sir.

Jeff Miller

Thank you, Kayla. Good morning, everyone, and thanks you for joining us today for Welltower's second quarter 2016 conference call. If you did not receive a copy of the news release distributed this morning, you may access it via the company's website at welltower.com. We are holding a live webcast of today's call which may be accessed through the company's website. Before we begin, let me remind you that certain statements made during this conference call maybe being forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Although wealth power believes is all expected in any forward-looking statements are based on reasonable assumptions, the company can give no assurance that its projected results will be attained. Factors and risks that could cause actual results to differ materially from those in the forward-looking statements are detailed in the news release and from time to time in the company's filings with the SEC.

I will now turn the call over to Tom DeRosa, our CEO. Tom?

Tom DeRosa

Thanks, Jeff. Our strong results this quarter were driven by excellent operating results across all of our business segments. From an earnings perspective, funds from operations per share was up 6% and funds available for distribution was up 9%. The Scotts will take you through a deeper dive of what is driving our performance. But, first, let me give you the high points. Overall same-store NOI for all of Welltower was up 3.3% versus last year. This is largely being driven by the performance of our seniors housing business. The senior housing operating portfolio registered 4% same-store NOI growth versus a year earlier.

Despite the industry concerns about new supply and wage expense growth, the Welltower family of operators were able to pass along on average 4% rate increases while increasing occupancy by 100 basis points. These results can only be realized from owning A quality real estate in A quality markets. That is the Welltower story. A key differentiator for Welltower is that 90% of our revenue is from private pay sources.

You should expect to see our private pay percentage increase through this year. However, we also have a strong history of managing the credit exposure to government reimbursement for our shareholders. So, regarding our Genesis assets, we believe Genesis is continuing to strengthen its business platform and financial position. I can only speak to our Genesis portfolio and I can tell you that the operating performance of our portfolio improved during the quarter.