Welltower Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2020 WellPower, Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today to Mr. Matt McQueen, General Counsel. Thank you. Please go ahead, sir.

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

Thanks, Matt. First and foremost, I hope that all of you and your families are safe and healthy during these difficult times. When we last spoke with you in early May, Welltower was in the midst of the most challenging period in the company's history. Many of our senior housing and post-acute care operators had implemented admissions bans to prevent or control the spread of COVID within their communities. Critical personal protective equipment and testing kits were difficult to procure, and labor challenges left many of our operators short-staffed. However, I am pleased to report that significant progress has been made on all of these fronts, and that most of our properties have reopened with appropriate staffing levels and requisite PPE and testing kits. This was accomplished through careful planning and precautionary measures taken by our operators. In fact, in just a few months, 95% of our senior housing operating communities are now accepting new residents. And this is significant because our communities are a critical component to the care continuum. It is imperative. that seniors have access to residential settings in which professional care is offered to meet their everyday needs, including safety, nutrition, hygiene, and medication management. It is important to remember that this is a needs-driven asset class. Welltower's traditional assisted living portfolio is skewed toward higher acuity settings, which are built for seniors who have exhausted the ability to be cared for in a conventional home setting. We continue to owe a debt of gratitude to the frontline workers in all of our properties who braved extraordinary obstacles to put the care of their residents above all else. While I'm encouraged by our progress, by no means are we signaling the all clear. we are acutely aware of the heightened level of risk which continues to exist, particularly as the number of COVID cases in the U.S. continues to rise. As Sean and Tim will describe in greater detail, the toll from COVID on our business has been and will continue to be pronounced. However, the decisions we have made since the beginning of the pandemic have and the steps we have taken over the past five years to strengthen our enterprise have put us in a position to weather this storm. These decisions, while often difficult, are rooted in data and always executed with the long-term interests of our shareholders in mind. This management team has earned a reputation for taking on both opportunities and issues in a proactive manner, and COVID-19, has not changed that. One of the strongest examples of this approach relates to our recent efforts to further strengthen our balance sheet. As financial conditions began to deteriorate at the outset of the pandemic, our team did not panic. Instead, through a thoughtful and deliberate process, we obtained a $1 billion term loan providing us with ample flexibility in the event of a prolonged market downturn. As conditions improved in subsequent months, our team waited for an opportune time at which to return to the public market. And in June, we issued $600 million of unsecured debt at just 2.75 percent, the lowest coupon on 10-year notes in Welltower's history. These actions are a reflection of Tim McHugh and his team's responsible stewardship of our balance sheet and the confidence from investors and our banking partners in the Welltower platform. Another major achievement was the disposition of two large portfolios of seniors housing and outpatient medical assets with a combined total value of $1.3 billion. These sales were executed during a time in which few real estate assets traded and when the ability for senior housing to withstand the impact of COVID was called into question. Most notably, our billion-dollar transaction with Kane Anderson provided significant and immediate liquidity to Welltower in a period of under 45 days and was executed at valuation levels which were only modestly below pre-COVID pricing. Again, we were not backed into a corner to complete these deals. The valuation we achieved demonstrated the appreciation for the long-term growth prospects for healthcare real estate by astute investors and the strong liquidity which exists for our asset class. I applaud our investment teams for their perseverance in completing these deals under the most extenuating of circumstances. As the year progresses, you should expect to see more of this. Following the completion of our capital markets activity and portfolio dispositions, our near-term liquidity stands at $4.3 billion. The company is extremely well positioned to address all near-term capital obligations and has ample capacity to execute on accretive opportunities as they arise. Our team will continue to explore all avenues through which to create value for our shareholders, And regardless of how strong our liquidity position is today, our underwriting discipline will not be compromised. Many questions remain unanswered as to the duration and ultimate impact of COVID-19. However, what we can say with great certainty is that the long-term drivers of our business remain firmly intact. The population is growing older, The need for value-based healthcare is as important as ever, and addressing social determinants of health will only grow in relevance. While it's often difficult to see past the next week or next quarter, rest assured that Welltower's long-term value proposition has not changed. There will be challenging times ahead. But we are confident that the company is positioned to navigate through these choppy waters and emerge as the continued leader in delivering the real estate that will enable more efficient and cost-effective health care and wellness. With that, I'll turn the mic to Tim.