Welltower Inc. (WELL) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 8, 2022 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Hello. My name is Lisa, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Welltower Third Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there’ll be a question-and-answer session.

I would now like to turn the call over to Mr. Matt McQueen, General Counsel. Please go ahead, sir.

Matt McQueen - General Counsel

Thank you, and good morning. As a reminder, certain statements made during this call may be deemed forward-looking statements in the meaning of the Private Securities Litigation Reform Act. Although Welltower believes any forward-looking statements are based on reasonable assumptions, the company can give no assurances that its projected results will be attained. Factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company's filings with the SEC.

And with that, I'll hand the call over to Shankh for his remarks.

Shankh Mitra - CEO

Thank you, Matt, and good morning, everyone. Today, I would like to describe our capital allocation priorities, ProMedica Senior Care transaction and the rapidly evolving capital markets environment. I will also review some high-level business trends before handling the call over to John, who will provide details on operational trends and a brief update on our operating platform.

I'm very pleased with the progress we have made since we last spoke 90 days ago, despite a flattish earnings trends on a sequential basis, driven by several existing headwinds, including FX, interest rate and utility expenses, our underlying business is actually improving meaningfully and setting up for the coil spring recovery that we hoped for.

In our senior housing operating business, same-store revenue is up 10.8% year-over-year, driven by strong occupancy gains, and most importantly, pricing power. 5.3% same-store rate growth is the best we have seen in our recorded history and I want to remind everyone that we're compounding already industry-leading rate growth from last year.

From these early trends, I believe you will see a further improvement in Q4, which will create a strong setup for 2023. However perhaps what I'm most excited about is the progress we're making on the labor front with compensation for occupied unit is up 4.3% year-over-year, the lowest level of growth we have reported since the beginning of pandemic.