Welltower Inc. (NYSE:WELL) Q3 2018 Earnings Conference Call - Final Transcript

Oct 30, 2018 • 10:00 am ET

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Welltower Inc. (NYSE:WELL) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to the Third Quarter 2018 Welltower Earnings Conference Call. My name is Regina, and I will be your operator today. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

Now I would like to turn the call over to Tim McHugh, Senior Vice President, Corporate Finance. Please go ahead, sir.

Executive
Tim McHugh

Thank you, Regina. Good morning, everyone and thank you for joining us today to discuss Welltower's Third Quarter 2018 Results. Today we will hear prepared remarks from Tom DeRosa, CEO; Shankh Mitra, CIO; Keith Konkoli, SVP Real Estate Services; and John Goodey, CFO.

(Forward-Looking-Cautionary-Statements)

And with that I will hand the call over to Tom for his remarks on the quarter.

Executive
Tom DeRosa

Thanks, Tim, and good morning. I'm pleased by the financial results and improvement in operating metrics that we report to you this morning. Continued positive NOI growth across all our business segments has given us the confidence to raise our 2018 FFO guidance by $0.03 at the low end and $0.01 at the high end or raise of $0.02 at the midpoint from $3.99 to $4.06 to $4.02 to $4.07, and despite the fact that we raised $232 million in equity in the quarter under our ATM and DRIP programs at a weighted average share price of $66.07.

We've been talking for a number of quarters about dispositions and restructurings. These initiatives enabled us to delever and improve the quality of our cash flow. In 2018, we have shown our ability to reinvest accretively in assets and operator relationships that are aligned with our well-articulated strategy and will drive earnings growth.

Welltower's value proposition, which connects seniors housing, post-acute, and ambulatory sites of care to dominant, financially strong health systems is being embraced by the broader healthcare delivery sector and truly differentiates us from REIT and other capital sources. A knowledge-based strategy aligned with our proprietary data and analytic capabilities is enabling Welltower to drive hundreds of basis points better relative operating performance from our senior housing assets, even in a challenging new supply and labor environment.

Shankh will go through our operating performance in greater detail, but we are encouraged by our positive results in this part of the cycle. Our strategy has enabled us to attract a next generation of senior housing operators and assets as we have sold or restructured over $8 billion of non-strategic real estate or misaligned legacy operator relationships in the last 24 months.

In a sector that has seen little capital deployed into long-term real estate assets, Welltower has completed approximately $3 billion of high-quality accretive investments and developments year-to-date, and the year is not over. In addition to the $2.2 billion ProMedica joint venture that closed this quarter, today we announced nearly $0.5 billion of new medical office investments, including an expansion of our growing portfolio with the Johns Hopkins Health System and Providence St. Joseph's Health. Keith Konkoli will tell