[Overview](index=3&type=section&id=Overview) This chapter provides a snapshot of Welltower's portfolio composition by asset type, details same-store Net Operating Income (NOI) performance for Q1 2024, and shows the facility revenue mix Portfolio Composition (Total Properties: 2,096, Average Age: 19 years) | Asset Type | Properties | Total Beds/Units/SqFt | Wellness Housing | Independent Living | Assisted Living | Memory Care | Long-Term/Post-Acute Care | | :-------------------------- | :--------- | :---------------------- | :--------------- | :----------------- | :-------------- | :---------- | :------------------------ | | Seniors Housing Operating | 994 | 120,401 units | 20,767 | 45,676 | 37,958 | 15,370 | 630 | | Seniors Housing Triple-net | 360 | 27,842 units | — | 5,001 | 13,671 | 8,791 | 379 | | Outpatient Medical | 450 | 26,680,153 sqft | n/a | n/a | n/a | n/a | n/a | | Long-Term/Post-Acute Care | 292 | 37,225 beds | — | — | 1,022 | — | 36,203 | Same Store NOI Performance (Q1 2024 vs Q1 2023) | Asset Type | 1Q23 NOI ($) | 1Q24 NOI ($) | % Change | | :-------------------------- | :----------- | :----------- | :--------- | | Seniors Housing Operating | 212,749 | 266,907 | 25.5 % | | Seniors Housing Triple-net | 90,310 | 93,740 | 3.8 % | | Outpatient Medical | 116,879 | 119,184 | 2.0 % | | Long-Term/Post-Acute Care | 57,507 | 59,308 | 3.1 % | | **Total** | **477,445** | **539,139** | **12.9 %** | Portfolio Performance Facility Revenue Mix (as of March 31, 2024) | Asset Type | Occupancy | Private Pay | Medicaid | Medicare | Other Government | | :-------------------------- | :-------- | :---------- | :------- | :------- | :--------------- | | Seniors Housing Operating | 83.9 % | 97.6 % | 1.0 % | 0.4 % | 1.0 % | | Seniors Housing Triple-net | 83.2 % | 88.6 % | 4.2 % | 0.5 % | 6.7 % | | Outpatient Medical | 94.2 % | 100.0 % | — | — | — | | Long-Term/Post-Acute Care | 79.3 % | 27.6 % | 47.7 % | 24.7 % | — % | | **Total** | **—** | **93.0 %** | **3.9 %** | **1.7 %** | **1.4 %** | [Portfolio](index=4&type=section&id=Portfolio) This section provides a detailed breakdown of Welltower's portfolio, including diversification by partner, country, and metropolitan statistical area (MSA), as well as specific performance metrics for key segments [Portfolio Diversification](index=4&type=section&id=Portfolio%20Diversification) This section details the diversification of In-Place Net Operating Income (NOI) across various partners, countries, and metropolitan statistical areas (MSAs) In-Place NOI Diversification by Partner (Annualized) | Partner | Total Properties | Total In-Place NOI ($) | % of Total | | :-------------------------- | :--------------- | :--------------------- | :--------- | | Cogir Management Corporation | 105 | 176,880 | 6.8 % | | Sunrise Senior Living | 91 | 170,568 | 6.5 % | | Integra Healthcare Properties | 147 | 156,272 | 6.0 % | | Avery Healthcare | 91 | 146,120 | 5.6 % | | Oakmont Management Group | 63 | 112,844 | 4.3 % | | Remaining | 1,151 | 1,446,092 | 55.5 % | | **Total** | **1,937** | **2,609,800** | **100.0 %** | In-Place NOI Diversification by Country (Annualized) | Country | Total Properties | Total In-Place NOI ($) | % of Total | | :-------------- | :--------------- | :--------------------- | :--------- | | United States | 1,674 | 2,240,160 | 85.8 % | | United Kingdom | 129 | 194,816 | 7.5 % | | Canada | 134 | 174,824 | 6.7 % | | **Total** | **1,937** | **2,609,800** | **100.0 %** | Top MSAs by In-Place NOI (Annualized) | MSA | Total Properties | Total In-Place NOI ($) | % of Total | | :---------------- | :--------------- | :--------------------- | :--------- | | Los Angeles | 74 | 155,452 | 6.0 % | | New York / New Jersey | 76 | 131,068 | 5.0 % | | Dallas | 71 | 103,880 | 4.0 % | | Greater London | 49 | 90,100 | 3.5 % | | Washington D.C. | 40 | 82,288 | 3.2 % | [Seniors Housing Operating (SHO) Performance](index=5&type=section&id=Seniors%20Housing%20Operating%20(SHO)%20Performance) This section presents a quarterly overview of Seniors Housing Operating (SHO) performance, including total portfolio and same-store metrics, highlighting significant year-over-year NOI growth SHO Total Portfolio Performance (Quarterly) | Metric | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | | :---------------- | :----- | :----- | :----- | :----- | :----- | | Properties | 885 | 886 | 883 | 915 | 935 | | Units | 89,240 | 89,932 | 90,953 | 99,387 | 101,395 | | Total occupancy | 79.0 % | 79.6 % | 80.7 % | 82.2 % | 82.5 % | | Total revenues ($) | 1,143,744 | 1,178,975 | 1,221,753 | 1,287,666 | 1,386,818 | | NOI ($) | 248,763 | 276,907 | 288,290 | 305,589 | 351,836 | | NOI margin | 21.7 % | 23.5 % | 23.6 % | 23.7 % | 25.4 % | SHO Same Store Performance (Quarterly) | Metric | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | | :-------------------------- | :----- | :----- | :----- | :----- | :----- | | Properties | 665 | 665 | 665 | 665 | 665 | | Occupancy | 80.0 % | 80.8 % | 82.2 % | 83.5 % | 83.4 % | | Same store revenues ($) | 909,268 | 935,048 | 962,566 | 980,403 | 1,003,135 | | Same store NOI ($) | 212,749 | 231,714 | 242,254 | 245,338 | 266,907 | | Same store NOI margin % | 23.4 % | 24.8 % | 25.2 % | 25.0 % | 26.6 % | | Year over year NOI growth rate | — | — | — | — | 25.5 % | | Year over year revenue growth rate | — | — | — | — | 10.3 % | Top SHO Partners by 1Q24 NOI | Partner | 1Q24 NOI ($) | % of Total | | :-------------------------- | :----------- | :--------- | | Cogir Management Corporation | 32,634 | 9.3 % | | Sunrise Senior Living | 19,709 | 5.6 % | | Oakmont Management Group | 18,426 | 5.2 % | | Belmont Village | 18,191 | 5.2 % | | Atria Senior Living | 15,365 | 4.4 % | [Lease and Coverage Metrics](index=6&type=section&id=Lease%20and%20Coverage%20Metrics) This section details payment coverage stratification for Seniors Housing and Long-Term/Post-Acute Care properties and provides a comprehensive schedule of revenue and lease maturities EBITDARM Coverage Stratification (as of Dec 31, 2023) | % of In-Place NOI | Seniors Housing Triple-net | Long-Term/Post-Acute Care | Total | Weighted Average Maturity (Years) | Number of Leases | | :---------------- | :------------------------- | :------------------------ | :---- | :-------------------------------- | :--------------- | | <.85x | 0.4 % | — % | 0.4 % | 9 | 2 | | .85x-.95x | — % | — % | — % | — | — | | .95x-1.05x | 2.3 % | — % | 2.3 % | 9 | 2 | | 1.05x-1.15x | 1.9 % | 0.4 % | 2.3 % | 5 | 4 | | 1.15x-1.25x | 2.1 % | 0.9 % | 3.0 % | 11 | 3 | | 1.25x-1.35x | 5.7 % | 0.1 % | 5.8 % | 8 | 5 | | >1.35 | 1.2 % | 4.3 % | 5.5 % | 17 | 13 | | **Total** | **13.6 %** | **5.7 %** | **19.3 %** | **11** | **29** | Revenue and Lease Maturity Schedule (Total Revenues $1,499,102k) | Year | Seniors Housing Triple-net ($) | Outpatient Medical ($) | Long-Term/Post-Acute Care ($) | Interest Income ($) | Total Revenues ($) | % of Total | | :--- | :----------------------------- | :--------------------- | :---------------------------- | :------------------ | :----------------- | :--------- | | 2024 | 13,495 | 50,449 | — | 39,088 | 103,032 | 6.9 % | | 2025 | 5,837 | 40,593 | 720 | 16,667 | 63,817 | 4.3 % | | 2026 | 3,304 | 49,666 | 9,287 | 40,118 | 102,375 | 6.8 % | | 2027 | — | 45,040 | 1,232 | 11,953 | 58,225 | 3.9 % | | 2028 | — | 46,576 | 6,404 | 103,633 | 156,613 | 10.4 % | | 2029 | 1,035 | 42,595 | — | 3,322 | 46,952 | 3.1 % | | 2030 | 42,330 | 39,955 | 29,031 | 361 | 111,677 | 7.4 % | | 2031 | 6,571 | 52,905 | 4,430 | 233 | 64,139 | 4.3 % | | 2032 | 94,226 | 44,474 | — | 351 | 139,051 | 9.3 % | | 2033 | 55,028 | 32,495 | — | — | 87,523 | 5.8 % | | Thereafter | 154,579 | 129,182 | 280,219 | 1,718 | 565,698 | 37.8 % | | **Total** | **376,405** | **573,930** | **331,323** | **217,444** | **1,499,102** | **100.0 %** | | Weighted Avg Maturity Years | 10 | 7 | 14 | 3 | 9 | | [Outpatient Medical Performance](index=7&type=section&id=Outpatient%20Medical%20Performance) This section provides a quarterly performance review for the Outpatient Medical portfolio, including total and same-store metrics, portfolio diversification, and lease expiration schedules Outpatient Medical Total Portfolio Performance (Quarterly) | Metric | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | | :---------------------- | :----- | :----- | :----- | :----- | :----- | | Properties | 419 | 420 | 422 | 426 | 427 | | Square feet | 20,188,159 | 20,236,315 | 20,748,969 | 21,043,557 | 21,148,949 | | Occupancy | 94.0 % | 94.4 % | 94.5 % | 94.5 % | 94.2 % | | Total revenues ($) | 185,190 | 186,802 | 195,136 | 192,822 | 203,849 | | NOI ($) | 126,213 | 127,444 | 131,305 | 137,762 | 138,687 | | NOI margin | 68.2 % | 68.2 % | 67.3 % | 71.4 % | 68.0 % | Outpatient Medical Same Store Performance (Quarterly) | Metric | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | | :-------------------------- | :----- | :----- | :----- | :----- | :----- | | Properties | 378 | 378 | 378 | 378 | 378 | | Occupancy | 94.7 % | 94.9 % | 95.0 % | 94.8 % | 94.7 % | | Same store revenues ($) | 172,500 | 171,576 | 174,464 | 167,390 | 176,084 | | Same store NOI ($) | 116,879 | 117,828 | 117,750 | 120,320 | 119,184 | | NOI margin | 67.8 % | 68.7 % | 67.5 % | 71.9 % | 67.7 % | | Year over year NOI growth rate | — | — | — | — | 2.0 % | Outpatient Medical Portfolio Diversification (by Tenant Rental Income) | Tenant | Rental Income ($) | % of Total | | :-------------------------- | :---------------- | :--------- | | Kelsey-Seybold | 45,543 | 7.9 % | | UnitedHealth | 18,404 | 3.2 % | | Common Spirit Health | 17,976 | 3.1 % | | Novant Health | 17,485 | 3.0 % | | Providence Health & Services | 16,739 | 2.9 % | | Remaining portfolio | 457,783 | 79.9 % | | **Total** | **573,930** | **100.0 %** | - Outpatient Medical Quality Indicators: - **Health system affiliated properties as % of NOI**: 88.9 % - **Health system affiliated tenants as % of rental income**: 60.4 % - **Investment grade tenants as % of rental income**: 55.6 % - **Retention (trailing twelve months)**: 92.7 % - **Average remaining lease term**: 6.6 years[23](index=23&type=chunk) Outpatient Medical Expirations (% of occupied square feet) | Year | 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | :--------- | | % of occupied square feet | 8.5 % | 6.7 % | 9.0 % | 8.0 % | 8.3 % | 59.5 % | [Investment](index=8&type=section&id=Investment) This section details Welltower's investment activities, including historical acquisitions, gross investment breakdown, and a comprehensive overview of development projects and unstabilized properties [Investment Activity Overview](index=8&type=section&id=Investment%20Activity%20Overview) This section provides a historical overview of Welltower's acquisition and joint venture activities and details investment timing for Q1 2024 Relationship Investment History (Acquisitions/JVs Total) | Year | Count | Total ($) | | :--- | :---- | :-------- | | 2020 | 12 | 910,217 | | 2021 | 35 | 4,101,534 | | 2022 | 27 | 2,785,739 | | 2023 | 52 | 4,222,706 | | 1Q24 | 3 | 61,034 | | **20-24 Total** | **129** | **12,081,230** | Investment Timing (Q1 2024) | Activity | Total ($) | Yield | | :-------------------------- | :-------- | :------ | | Acquisitions and Loan Funding | 207,934 | 6.8 % | | Construction Conversions | 165,603 | 3.7 % | | Dispositions and Loan Repayments | 106,994 | 5.0 % | [Gross Investment Details](index=9&type=section&id=Gross%20Investment%20Details) This section outlines the gross investment activities for Q1 2024, categorizing them into acquisitions, development funding, and dispositions Gross Investment Activity (First Quarter 2024) | Category | Properties | Pro Rata Amount ($) | Yield | | :-------------------------------- | :--------- | :------------------ | :------ | | Acquisitions and Loan Funding | 3 | 207,934 | 6.8 % | | Development Funding (Total) | 56 | 241,295 | 7.1 % | | **Total Gross Investments** | **—** | **449,229** | **6.9 %** | | Dispositions and Loan Repayments | 10 | 106,994 | 5.0 % | | **Net Investments (Dispositions)** | **—** | **342,235** | **—** | [Development Projects](index=10&type=section&id=Development%20Projects) This section provides a detailed summary of current development projects, funding projections, conversion timelines, and an overview of unstabilized properties Total Development Projects (Commitment Amount & Future Funding) | Category | Commitment Amount ($) | Estimated Future Funding ($) | | :-------------------------- | :-------------------- | :--------------------------- | | Seniors Housing Operating | 1,811,089 | 543,075 | | Outpatient Medical | 710,406 | 382,563 | | **Total Development Projects** | **2,521,495** | **925,638** | Development Funding Projections (Total) | Category | Stable Yields | 2024 Funding ($) | Thereafter Funding ($) | Total Unfunded Commitments ($) | Committed Balances ($) | | :-------------------------- | :------------ | :--------------- | :--------------------- | :--------------------------- | :--------------------- | | Seniors Housing Operating | 7.3 % | 351,697 | 191,378 | 543,075 | 1,811,089 | | Outpatient Medical | 6.3 % | 308,716 | 73,847 | 382,563 | 710,406 | | **Total** | **7.0 %** | **660,413** | **265,225** | **925,638** | **2,521,495** | Development Project Conversion Estimates (Total) | Period | Amount ($) | Year 1 Yields | Stable Yields | | :---------------- | :--------- | :------------ | :------------ | | 1Q24 actual | 162,557 | 3.7 % | 6.6 % | | 2Q24 estimate | 388,082 | 2.9 % | 6.5 % | | 3Q24 estimate | 317,906 | 0.6 % | 7.7 % | | 4Q24 estimate | 742,951 | 2.0 % | 7.1 % | | 1Q25 estimate | 561,326 | 4.0 % | 7.0 % | | 2Q25 estimate | 250,798 | 1.7 % | 6.3 % | | 3Q25 estimate | 66,799 | 0.7 % | 6.9 % | | 4Q25 estimate | 58,284 | (0.3)% | 7.2 % | | 1Q26 estimate | 18,375 | (3.4)% | 10.9 % | | 3Q26 estimate | 116,974 | 0.5 % | 7.5 % | | **Total** | **2,684,052** | **2.3 %** | **7.0 %** | Unstabilized Properties (as of March 31, 2024) | Occupancy | Properties | Months In Operation | Revenues ($) | % of Total Revenues | Gross Investment Balance ($) | % of Total Gross Investment | | :-------- | :--------- | :------------------ | :----------- | :------------------ | :--------------------------- | :-------------------------- | | 0% - 50% | 16 | 11 | 88,874 | 1.2 % | 866,877 | 1.8 % | | 50% - 70% | 20 | 24 | 172,291 | 2.3 % | 938,069 | 2.0 % | | 70% + | 14 | 29 | 165,498 | 2.2 % | 559,736 | 1.2 % | | **Total** | **50** | **21** | **426,663** | **5.7 %** | **2,364,682** | **5.0 %** | [Financial](index=12&type=section&id=Financial) This section provides a comprehensive financial overview, including Net Asset Value (NAV) components, Net Operating Income (NOI) by segment, leverage reconciliations, and debt structure [Components of NAV](index=12&type=section&id=Components%20of%20NAV) This section details the components contributing to Welltower's Net Asset Value (NAV), including stabilized NOI, total debt, and other assets and liabilities Total Stabilized NOI | Category | Amount ($) | | :-------------------------- | :----------- | | Seniors Housing Operating | 1,344,032 | | Seniors Housing Triple-net | 407,064 | | Outpatient Medical | 526,384 | | Long-Term/Post-Acute Care | 332,320 | | Incremental stabilized NOI | 116,098 | | **Total stabilized NOI** | **2,725,898** | Total Debt Obligations | Category | Amount ($) | | :-------------------------- | :----------- | | Lines of credit and commercial paper | — | | Senior unsecured notes | 12,328,089 | | Secured debt | 2,905,614 | | Financing lease liabilities | 80,541 | | **Total debt** | **15,314,244** | Net Obligations | Category | Amount ($) | | :---------------------------------------- | :----------- | | Total debt | 15,314,244 | | Other liabilities (assets), net | 424,081 | | Cash and cash equivalents and restricted cash | (2,478,335) | | **Net obligations** | **13,259,990** | Other Assets | Category | Amount ($) | | :-------------------------- | :----------- | | Land parcels | 427,215 | | Real estate loans receivable | 2,147,555 | | Non-real estate loans receivable | 290,619 | | Joint venture real estate loans receivables | 269,190 | | Property dispositions (expected) | 1,043,796 | | Development properties (committed balances) | 2,539,605 | [Net Operating Income](index=13&type=section&id=Net%20Operating%20Income) This section provides a detailed quarterly breakdown of Net Operating Income (NOI) by property segment, showing revenues and property operating expenses for each Total Revenues by Segment (1Q24) | Segment | Resident Fees & Services ($) | Rental Income ($) | Interest Income ($) | Other Income ($) | Total Revenues ($) | | :-------------------------- | :--------------------------- | :---------------- | :------------------ | :--------------- | :----------------- | | Seniors Housing Operating | 1,379,295 | — | 4,716 | 2,807 | 1,386,818 | | Seniors Housing Triple-net | — | 110,967 | 35,478 | 955 | 147,400 | | Outpatient Medical | — | 200,593 | 852 | 2,404 | 203,849 | | Long-Term/Post-Acute Care | — | 104,046 | 15,823 | 244 | 120,113 | | Corporate | — | — | — | 28,729 | 28,729 | | **Total** | **1,379,295** | **415,606** | **56,869** | **35,139** | **1,886,909** | Total Property Operating Expenses by Segment (1Q24) | Segment | Property Operating Expenses ($) | | :-------------------------- | :------------------------------ | | Seniors Housing Operating | 1,034,982 | | Seniors Housing Triple-net | 7,559 | | Outpatient Medical | 65,162 | | Long-Term/Post-Acute Care | 3,448 | | Corporate | 3,636 | | **Total** | **1,114,787** | Net Operating Income (NOI) by Segment (1Q24) | Segment | NOI ($) | | :-------------------------- | :-------- | | Seniors Housing Operating | 351,836 | | Seniors Housing Triple-net | 139,841 | | Outpatient Medical | 138,687 | | Long-Term/Post-Acute Care | 116,665 | | Corporate | 25,093 | | **Total Net Operating Income** | **772,122** | [Leverage and EBITDA Reconciliations](index=14&type=section&id=Leverage%20and%20EBITDA%20Reconciliations) This section provides reconciliations for EBITDA and Adjusted EBITDA, along with calculations for key coverage and net debt ratios EBITDA and Adjusted EBITDA (Twelve Months Ended March 31, 2024) | Metric | Amount ($) | | :-------------------------- | :----------- | | Net income (loss) | 461,138 | | Interest expense | 610,761 | | Income tax expense (benefit) | 9,510 | | Depreciation and amortization | 1,427,852 | | **EBITDA** | **2,509,261** | | Total adjustments | 159,892 | | **Adjusted EBITDA** | **2,669,153** | Coverage Ratios (Twelve Months Ended March 31, 2024) | Ratio | Value | | :-------------------------- | :------ | | Interest coverage ratio | 3.94 x | | Adjusted Interest coverage ratio | 4.19 x | | Fixed charge coverage ratio | 3.65 x | | Adjusted Fixed charge coverage ratio | 3.88 x | Net Debt to EBITDA Ratios (as of March 31, 2024) | Metric | Amount ($) | Ratio | | :-------------------------- | :----------- | :------ | | Total debt | 14,285,686 | | | Less: cash and cash equivalents and restricted cash | (2,478,335) | | | **Net debt** | **11,807,351** | | | EBITDA Annualized | 2,604,024 | 4.53 x | | Adjusted EBITDA Annualized | 2,929,464 | 4.03 x | [Leverage and Current Capitalization](index=15&type=section&id=Leverage%20and%20Current%20Capitalization) This section details Welltower's capitalization structure across book and enterprise value metrics, highlighting key leverage indicators Book Capitalization (as of March 31, 2024) | Category | Amount ($) | % of Total | | :---------------------------------------- | :----------- | :--------- | | Long-term debt obligations | 14,285,686 | 35.40 % | | Cash and cash equivalents and restricted cash | (2,478,335) | (6.14)% | | Net debt to consolidated book capitalization | 11,807,351 | 29.26 % | | Total equity | 28,547,908 | 70.74 % | | **Consolidated book capitalization** | **40,355,259** | **100.00 %** | Enterprise Value (as of March 31, 2024) | Category | Amount ($) | % of Total | | :---------------------------------------- | :----------- | :--------- | | Net debt to consolidated enterprise value | 11,807,351 | 17.36 % | | Common equity market capitalization | 55,216,873 | 81.17 % | | Noncontrolling interests | 999,965 | 1.47 % | | **Consolidated enterprise value** | **68,024,189** | **100.00 %** | - Debt Ratios (as of March 31, 2024): - **Secured debt as % of gross asset value**: 3.76 % - **Total debt as % of gross asset value**: 26.41 % - **Unsecured debt as % of unencumbered assets**: 25.07 %[51](index=51&type=chunk) [Debt Maturities and Scheduled Principal Amortization](index=16&type=section&id=Debt%20Maturities%20and%20Scheduled%20Principal%20Amortization) This section provides a detailed schedule of debt maturities and scheduled principal amortization by year, along with a breakdown of debt by local currency Debt Maturities and Scheduled Principal Amortization (Total Combined Debt $15,233,703k) | Year | Senior Unsecured Notes ($) | Consolidated Secured Debt ($) | Combined Debt ($) | % of Total | Wtd. Avg. Interest Rate | | :--- | :------------------------- | :---------------------------- | :---------------- | :--------- | :---------------------- | | 2024 | — | 307,236 | 400,509 | 2.63 % | 4.75 % | | 2025 | 1,260,000 | 379,484 | 2,115,154 | 13.88 % | 4.03 % | | 2026 | 700,000 | 152,652 | 881,481 | 5.79 % | 4.03 % | | 2027 | 1,906,204 | 206,191 | 2,197,899 | 14.43 % | 4.66 % | | 2028 | 2,480,035 | 105,956 | 2,597,090 | 17.05 % | 3.79 % | | 2029 | 1,050,000 | 318,012 | 1,403,229 | 9.21 % | 3.81 % | | 2030 | 750,000 | 57,066 | 841,298 | 5.52 % | 3.13 % | | 2031 | 1,350,000 | 6,978 | 1,390,263 | 9.13 % | 2.77 % | | 2032 | 1,050,000 | 47,952 | 1,101,746 | 7.23 % | 3.38 % | | 2033 | — | 395,502 | 367,371 | 2.41 % | 4.88 % | | Thereafter | 1,781,850 | 93,747 | 1,937,663 | 12.74 % | 5.04 % | | **Totals** | **12,328,089** | **2,070,776** | **15,233,703** | **100.00 %** | **4.02 %** | | Weighted Avg. Maturity Years | 6.3 | 4.8 | 6.0 | | | | % Floating Rate Debt | 5.63 % | 23.15 % | 7.56 % | | | Debt by Local Currency (as of March 31, 2024) | Currency | Senior Unsecured Notes ($) | Consolidated Secured Debt ($) | Combined Debt ($) | Investment Hedges ($) | | :------------- | :------------------------- | :---------------------------- | :---------------- | :-------------------- | | United States | 10,595,000 | 1,354,921 | 12,673,242 | — | | United Kingdom | 1,326,885 | — | 1,326,885 | 2,098,637 | | Canada | 406,204 | 715,855 | 1,233,576 | 1,920,236 | | **Totals** | **12,328,089** | **2,070,776** | **15,233,703** | **4,018,873** | [Glossary](index=17&type=section&id=Glossary) This section provides definitions for key terms used throughout the financial report, including various financial metrics, property classifications, and operational concepts - **EBITDAR**: Earnings before interest, taxes, depreciation, amortization and rent[64](index=64&type=chunk) - **EBITDARM**: Earnings before interest, taxes, depreciation, amortization, rent and management fees[66](index=66&type=chunk) - **NOI (Net Operating Income)**: Total revenues, including tenant reimbursements, less property operating expenses[80](index=80&type=chunk) - **Seniors Housing Operating (SHO)**: Includes independent, assisted living and dementia care properties in the U.S. and Canada and all care homes in the U.K. generally structured to take advantage of the REIT Investment Diversification and Empowerment Act of 2007, as well as Wellness Housing properties[73](index=73&type=chunk) - **Outpatient Medical**: Buildings offering ambulatory medical services such as primary and secondary care, outpatient surgery, diagnostic procedures and rehabilitation, typically affiliated with a health system[72](index=72&type=chunk) - **Stable Property**: Generally, a triple-net rental property is considered stable when it has achieved EBITDAR coverage of 1.00x or greater for three consecutive months or 12 months following the budgeted stabilization date. A Seniors Housing Operating facility is stable upon the earliest of 90% occupancy, NOI at or above the underwritten target or 12 months past the underwritten stabilization date[76](index=76&type=chunk) [Supplemental Reporting Measures](index=18&type=section&id=Supplemental%20Reporting%20Measures) This section defines and reconciles various non-GAAP financial measures used by Welltower to assess operating performance and credit strength [Non-GAAP Measure Definitions](index=18&type=section&id=Non-GAAP%20Measure%20Definitions) This section defines key supplemental reporting measures such as EBITDA, Adjusted EBITDA, NOI, In-Place NOI (IPNOI), Same Store NOI (SSNOI), RevPOR, and ExpPOR - **NOI (Net Operating Income)**: Total revenues, including tenant reimbursements, less property operating expenses[80](index=80&type=chunk) - **In-Place NOI (IPNOI)**: NOI excluding interest income, other income and non-IPNOI, adjusted for timing of current quarter portfolio changes[80](index=80&type=chunk) - **Same Store NOI (SSNOI)**: Evaluates operating performance of properties using a consistent population, controlling for portfolio changes[80](index=80&type=chunk) - **EBITDA**: Earnings (net income) before interest expense, income taxes, depreciation and amortization[82](index=82&type=chunk) - **Adjusted EBITDA**: EBITDA excluding unconsolidated entities and including adjustments for stock-based compensation, loan losses, gains/losses on debt extinguishment, properties, derivatives, other expenses, and impairment charges[82](index=82&type=chunk) - **RevPOR**: Average revenues generated per occupied room per month at Seniors Housing Operating properties[81](index=81&type=chunk) - **ExpPOR**: Average expenses per occupied room at Seniors Housing Operating properties[81](index=81&type=chunk) [Non-GAAP Reconciliations](index=19&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations from net income to NOI, and further breakdowns for In-Place NOI, Same Store Property, Same Store NOI, and SHO RevPOR NOI Reconciliation (1Q24) | Metric | Amount ($) | | :---------------------------------------- | :----------- | | Net income (loss) | 131,634 | | Total adjustments (various non-operating items) | 640,500 | | Consolidated net operating income | 762,828 | | NOI attributable to unconsolidated investments | 32,090 | | NOI attributable to noncontrolling interests | (22,796) | | **Pro rata net operating income (NOI)** | **772,122** | Annualized In-Place NOI Reconciliation (1Q24) | Segment | Annualized In-Place NOI ($) | | :-------------------------- | :-------------------------- | | Seniors Housing Operating | 1,344,032 | | Seniors Housing Triple-net | 407,064 | | Outpatient Medical | 526,384 | | Long-Term/Post-Acute Care | 332,320 | | Corporate | — | | **Total Annualized In-Place NOI** | **2,609,800** | Same Store NOI Reconciliation (1Q24 vs 1Q23 YoY Growth) | Segment | 1Q23 SSNOI ($) | 1Q24 SSNOI ($) | Y/o/Y Growth | | :-------------------------- | :------------- | :------------- | :----------- | | Seniors Housing Operating | 212,749 | 266,907 | 25.5 % | | Seniors Housing Triple-net | 90,310 | 93,740 | 3.8 % | | Outpatient Medical | 116,879 | 119,184 | 2.0 % | | Long-Term/Post-Acute Care | 57,507 | 59,308 | 3.1 % | | Corporate | — | — | — | | **Total SSNOI** | **477,445** | **539,139** | **12.9 %** | SHO SS RevPOR Growth (1Q24 vs 1Q23 YoY Growth) | Region | 1Q23 SHO SS RevPOR ($) | 1Q24 SHO SS RevPOR ($) | YOY Growth | | :------------- | :----------------------- | :----------------------- | :--------- | | United States | 5,632 | 5,901 | 4.8 % | | United Kingdom | 8,100 | 8,690 | 7.3 % | | Canada | 2,469 | 2,535 | 2.7 % | | **Total** | **5,373** | **5,630** | **4.8 %** | SHO SSNOI/Unit (Trailing Four Quarters) | Region | Trailing Four Quarters' SSNOI ($) | Average Units in Service | SSNOI/Unit in USD ($) | | :------------- | :------------------------------- | :--------------------- | :-------------------- | | United States | 864,375 | 61,453 | 14,066 | | United Kingdom | 45,590 | 2,469 | 18,465 | | Canada | 76,248 | 7,419 | 10,277 | | **Total** | **986,213** | **71,341** | **13,824** | [Forward-Looking Statements and Risk Factors](index=22&type=section&id=Forward%20Looking%20Statements%20and%20Risk%20Factors) This section contains standard forward-looking statements and outlines various risks and uncertainties that could cause actual results to differ materially from expectations - **Forward-Looking Statements**: Welltower uses words like "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "pro forma," "estimate" or similar expressions[102](index=102&type=chunk) - **Key Risk Factors**: Include the status of the economy and capital markets, issues facing the health care industry (regulations, payment policies, operator/tenant financial condition), changes in financing terms, competition, natural disasters, ability to re-lease space, operator/tenant bankruptcies, government regulations (Medicare/Medicaid), environmental laws, and maintaining REIT qualification[102](index=102&type=chunk) - **Additional Information**: Investors can access SEC filings (10-K, 10-Q, 8-K) and other financial information on www.welltower.com and www.sec.gov[103](index=103&type=chunk)[104](index=104&type=chunk) - **About Welltower**: Welltower Inc (NYSE:WELL) is a REIT and S&P 500 company focused on transforming health care infrastructure by investing with leading seniors housing operators, post-acute providers, and health systems in major, high-growth markets across the United States, Canada, and the United Kingdom[105](index=105&type=chunk)

Revenue Segmentation - The Seniors Housing Operating segment accounted for 72% of total revenues for the year ended December 31, 2023, with a significant contribution from Sunrise Senior Living, which represented approximately 12% of total revenues[33]. - The Triple-net segment contributed 16% of total revenues for the year ended December 31, 2023, with Integra Healthcare Properties accounting for about 3% of total revenues[36]. - The Outpatient Medical segment represented 11% of total revenues for the year ended December 31, 2023, with no single tenant exceeding 20% of segment revenues[39]. Financial Commitments and Investments - As of December 31, 2023, the company had outstanding construction investments of $1,304,441,000 and was committed to provide an additional $966,829,000 to complete construction for consolidated investment properties[46]. - The company had outstanding loans, net of allowances, of $1,691,706,000 with an interest yield of approximately 10.5% per annum as of December 31, 2023[47]. - Investments in unconsolidated entities amounted to $1,636,531,000 as of December 31, 2023, representing interests ranging from 10% to 95% in real estate assets[48]. Risk Management - Approximately 97% of the company's triple-net properties were subject to master leases as of December 31, 2023, which helps spread risk among the entire group of properties[43]. - The outpatient medical leases had a weighted-average remaining term of seven years at December 31, 2023, with 62% of the portfolio including leases with full pass-through[45]. - The company focuses on diversifying its investment portfolio by property type, relationship, and geographic location to enhance operational efficiency[40]. Employee Engagement and Development - The company has a commitment to employee engagement, conducting annual surveys to measure progress on key issues such as manager relationships and employee empowerment[67]. - The company offers various employee development programs, including executive management coaching and mentorship, to support career advancement[68]. - The company provides a comprehensive compensation and benefits program, including annual bonuses, retirement plans, and health and wellness reimbursement programs[69]. Governance and Compliance - The company has maintained Prime status under the ISS-ESG Corporate Rating for five consecutive years, reflecting its commitment to governance practices[63]. - The company maintains a diverse Board of Directors, with 40% female representation and 20% Black or African American members as of December 31, 2023[64]. - The company has implemented numerous health and wellness programs to support the well-being of employees, tenants, and residents, focusing on safety and flexible work arrangements[70]. Regulatory Environment - Operators of U.S. seniors housing facilities primarily rely on private pay sources for revenue, with Medicaid as a secondary source under state waiver programs[76]. - Long-term/post-acute care facilities receive the majority of their revenues from Medicare and Medicaid, with changes in reimbursement policies potentially impacting operators' ability to cover expenses[76]. - The Health Insurance Portability and Accountability Act (HIPAA) and other laws impose significant compliance costs on operators, which could adversely affect their financial obligations[80]. REIT Compliance and Taxation - The company intends to maintain its REIT status, which allows it to avoid U.S. federal income tax on distributed taxable income, but must meet various qualification tests[87]. - The company must distribute at least 90% of its REIT taxable income to avoid corporate tax, with a 4% excise tax on any undistributed amounts[88]. - The company must ensure compliance with the 10% vote test, 10% value test, and other asset tests to maintain its REIT status[103]. Debt and Interest Rate Exposure - Welltower OP's total principal balance of debt was $14,425,617, with a change in fair value of $(573,789) as of December 31, 2023[382]. - A 1% increase in interest rates would lead to an additional annual interest expense of $14,964,000 on variable rate debt as of December 31, 2023[382]. - The company is exposed to market risks, including adverse changes in interest rates and foreign currency exchange rates[380]. Foreign Currency and International Operations - The company is subject to currency fluctuations that may affect its financial condition and results of operations[383]. - A 10% increase or decrease in the value of the Canadian Dollar or British Pounds Sterling relative to the U.S. Dollar would impact net income from investments in Canada and the UK by less than $9,000,000[383]. - The company plans to mitigate foreign currency exposures with non-U.S. denominated borrowings and gains and losses on derivative contracts[383].

Financial Data and Key Metrics Changes - Welltower reported fourth quarter net income attributable to common stockholders of $0.15 per diluted share and normalized funds from operations of $0.96 per diluted share, representing 15.7% year-over-year growth [48] - Total portfolio, same-store NOI growth was 12.5% year-over-year [48] - The company finished the year with a net debt-to-EBITDA ratio of 5.03 times, down from nearly 7.5 times during the pandemic [53][55] Business Line Data and Key Metrics Changes - The Senior Housing Operating portfolio saw a same-store NOI growth of 24.4% for the full year 2023, with fourth quarter growth of 23.7% year-over-year [25][27] - The Outpatient Medical portfolio produced same-store growth of 2.8% for the fourth quarter, driven by favorable operating expense management [27] - Same-store ExpPOR (expense per occupied room) grew 1.7% year-over-year, the lowest growth in Welltower's recorded history [13][29] Market Data and Key Metrics Changes - The U.S. market experienced same-store revenue growth of 9.4%, while Canada and the U.K. grew at 9.7% and 14.1%, respectively [30] - NOI growth in the U.S., Canada, and the U.K. was 21.8%, 21.7%, and 75.5%, respectively [30] Company Strategy and Development Direction - Welltower's strategy includes a focus on high acuity products in affluent micro markets and a wellness housing segment with lower price points but higher NOI margins [73][75] - The company aims to leverage its integrated platform initiative to improve customer and employee experiences, with the first operator going live in the first half of 2024 [31] - The company is positioned to capitalize on a significant amount of Senior Housing loans maturing in the next 24 months, creating equity and private credit opportunities [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued double-digit NOI growth, driven by demand-supply dynamics and the ongoing build-out of the operating platform [80][82] - The company anticipates a robust investment pipeline, with nearly $3 billion in investments closed in the fourth quarter alone [33][39] - Management acknowledged the potential impact of regulatory changes in Senior Housing but emphasized the importance of reputation and quality in driving business success [96] Other Important Information - Welltower completed nearly $6 billion of investments in 2023, with a significant portion occurring in the fourth quarter [16][33] - The company has established a strategic partnership with Affinity Living Communities, acquiring a portfolio of 25 active adult properties for $969 million [44] Q&A Session Summary Question: Insights on Affinity portfolio margins and future focus - Management indicated that the 60% operating margin of the Affinity portfolio is at the upper end of wellness housing performance, with a historical NOI growth of mid-to-high single digits, reaching 12.2% in 2023 [71][77] Question: Market pricing and growth normalization - Management expressed surprise at market expectations for deceleration, suggesting continued strong growth potential based on improved demand-supply conditions [79][82] Question: Revenue per occupied room (RevPOR) growth expectations - Management indicated that RevPOR growth is expected to be in the range of 5% to 5.5%, with significant margin flow benefits as occupancy increases [86] Question: Investment pipeline and growth opportunities - Management refrained from providing specific guidance but noted a robust investment pipeline driven by credit situations and opportunities in the Senior Housing space [91][92] Question: Regulatory concerns and staffing in Senior Housing - Management acknowledged awareness of regulatory discussions but emphasized that reputation and quality of service are key drivers in the Senior Housing business [96] Question: Opportunities within maturing loans - Management noted that while the focus is on active adult and wellness housing, they are open to exploring additional opportunities as they arise [99][102]

Financial Data and Key Metrics Changes - Welltower reported a net income attributable to common stockholders of $0.24 per diluted share and normalized funds from operations (FFO) of $0.92 per diluted share, representing a year-over-year growth of 10.4% [43] - Total portfolio same-store NOI growth was 14.1% year-over-year, with senior housing operating portfolio achieving 26.1% growth [29][43] - The company achieved a net debt to adjusted EBITDA ratio of 5.14x, reflecting a 1.8x decrease compared to the previous year [48] Business Line Data and Key Metrics Changes - The senior housing operating portfolio experienced a 26.1% year-over-year NOI increase, driven by 9.8% revenue growth and 6.9% RevPOR growth [31][43] - The medical office portfolio reported a same-store NOI growth of 3.4% with a 95% occupancy rate [31] - The triple-net lease portfolio saw a same-store NOI increase of 3.9% year-over-year [44] Market Data and Key Metrics Changes - The U.S. region reported a same-store revenue growth of 9.6%, while Canada and the U.K. grew at 9.7% and 12.9%, respectively [33] - NOI growth in the U.S., Canada, and the U.K. was 25.4%, 27.1%, and 37%, respectively [34] Company Strategy and Development Direction - The company is focused on improving customer and employee experiences, which is expected to drive future growth [35][37] - Welltower is pursuing a digital transformation in the senior housing industry, enhancing technology infrastructure to improve operational efficiency [25][26] - The company plans to continue capital allocation activities, with a pipeline of $2.3 billion and a focus on selective investment opportunities [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating results despite macroeconomic uncertainties, highlighting strong pricing power and occupancy growth [6][10] - The company anticipates continued strong rate growth for existing customers, although finalization of rate letters is still in progress [74] - Management acknowledged the challenges in the debt and equity markets but remains confident in the company's balance sheet strength and flexibility [21][22] Other Important Information - The company is experiencing a significant reduction in net debt to adjusted EBITDA, which is one of the lowest levels in its recorded history [21] - Management emphasized the importance of maintaining high-quality staffing and reducing reliance on agency labor to enhance service quality [37][39] Q&A Session Summary Question: Interest in M&A opportunities following peers' merger - Management stated they are not engaged in the mentioned merger process and prefer one asset at a time transactions [63][66] Question: Occupancy levels and NOI potential from the Cogir transaction - Management indicated that occupancy levels are around 80% for properties transitioning to Cogir, with expectations for significant NOI upside [68][70] Question: Revenue increases for existing customers - Management expects strong rate growth for existing customers, although finalization is still ongoing [74] Question: Clarification on potential drag from Kisco and Balfour merger - Management clarified that multiple factors could collectively impact Q4, not just the Kisco and Balfour merger [76][78] Question: G&A trends for the next year - Management anticipates another year of elevated G&A growth due to ongoing platform build-out [80] Question: Senior housing development outlook - Management expressed skepticism about new senior housing developments due to high construction and capital costs [102] Question: Impact of liquidity issues on care quality - Management noted that their operating partners are performing well and attracting new operators despite market challenges [106]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-8923 WELLTOWER INC. (Exact name of registrant as specified in its charter) Delaware 34-1096634 (State or other jurisdiction o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or Not Applicable (Former name, former address and former fiscal year, if changed since last report) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-8923 WELLTOWER INC. (Exact name ...

Financial Data and Key Metrics Changes - Welltower reported a strong quarter with net income attributable to common stockholders of $0.05 per diluted share and normalized funds from operations (FFO) of $0.85 per diluted share, representing a 4% year-over-year growth and 13% growth after adjusting for currency and interest rate impacts [31] - The company achieved total portfolio same-store NOI growth of 11% year-over-year, driven by a 23.4% increase in the senior housing operating portfolio [31][23] - The net debt to EBITDA ratio improved to 6.3, down from 7.1 a year ago, indicating significant deleveraging progress [21][34] Business Line Data and Key Metrics Changes - The senior housing operating portfolio experienced a 23.4% same-store NOI growth, attributed to a 10% revenue growth and effective expense control [25][23] - The medical office portfolio's same-store NOI growth was 1.6%, with expectations of 2% to 3% growth for the year [24] - The triple-net lease portfolio saw a same-store NOI increase of 0.2% year-over-year [32] Market Data and Key Metrics Changes - Revenue growth in Canada was 7.7%, while the U.S. and UK grew by 9.3% and 17.4%, respectively [26] - Average occupancy increased by 240 basis points, with same-store occupancy at 94.9% and retention at 91.4% [25][26] - Agency labor usage declined significantly, leading to a 53% decrease in expenses year-over-year for the same-store portfolio [27] Company Strategy and Development Direction - The company is focused on optimizing its portfolio through strategic transitions to stronger operators, enhancing operational efficiency, and leveraging data analytics for better decision-making [13][15] - Welltower aims to capitalize on the current macroeconomic environment to expand its portfolio with well-located assets at favorable prices [19][20] - The company is optimistic about growth opportunities in senior housing across the U.S., Canada, and the UK, with a robust pipeline of investments [55][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for senior housing products, noting a 20% increase in total volumes in Q1, driven by organic demand and demographic trends [17] - There is acknowledgment of rising macroeconomic uncertainty, but management believes the need-driven nature of their product will help them outperform other asset classes [18] - The long-term growth trajectory remains intact, with strong top-line growth and moderating expenses [22] Other Important Information - The company acquired $529 million in assets during the first quarter, indicating a proactive approach to capital deployment [20] - Welltower's balance sheet is positioned to endure capital market volatility, with over $1 billion in capital sourced this year [21] Q&A Session Summary Question: Thoughts on further transitions and potential consolidation of operators - Management highlighted significant opportunities to grow with Kisco and emphasized the importance of optimizing location, product, price point, and operator [43][44][47] Question: Inquiry about labor sourcing and turnover levels - Management noted improvements in labor sourcing and a decrease in turnover, with ongoing initiatives to enhance employee satisfaction [49][52] Question: Update on the loan book and investment with HC-One - Management provided insights into the structure of their loan book, emphasizing a focus on low-levered loans and equity features [54][56][57] Question: Pricing power trends in senior housing - Management reported strong pricing power and positive feedback from operators, with expectations for continued strength in pricing due to supply-demand dynamics [73][74] Question: Current development pipeline and anticipated shifts - Management indicated that the majority of new capital outlay is focused on wellness rather than traditional senior housing, with a cautious approach to new developments [77][78] Question: Access to Welltower's platform for operators - Management clarified that they have aligned interests with operators and provide varying levels of support based on the relationship [78][80]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or other jurisdiction of Incorporation) For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-8923 WELLTOWER INC. (Exact name of registrant as specified in its charter) 4500 Do ...

Revenue Segmentation - The Seniors Housing Operating segment accounted for 72%, 68%, and 67% of total revenues for the years ended December 31, 2022, 2021, and 2020, respectively[27]. - The Triple-net segment accounted for 16%, 19%, and 17% of total revenues for the years ended December 31, 2022, 2021, and 2020, respectively[30]. - The Outpatient Medical segment accounted for 12%, 13%, and 16% of total revenues for the years ended December 31, 2022, 2021, and 2020, respectively[33]. - The relationship with Sunrise Senior Living accounted for approximately 20% of the Seniors Housing Operating segment revenues and 14% of total revenues for the year ended December 31, 2022[27]. - ProMedica Health System accounted for approximately 26% of the Triple-net segment revenues and 4% of total revenues for the year ended December 31, 2022[30]. - Approximately 87% of the outpatient medical building portfolio is affiliated with health systems[33]. - As of December 31, 2022, 96% of the triple-net properties were subject to master leases[38]. Financial Investments and Loans - As of December 31, 2022, the company had outstanding construction investments of $1,021,080,000 and was committed to provide additional funds of approximately $1,883,449,000 to complete construction for consolidated investment properties[40]. - At December 31, 2022, the company had outstanding loans, net of allowances, of $1,180,012,000 with an interest yield of approximately 9.9% per annum[41]. - Investments in unconsolidated entities amounted to $1,499,790,000 as of December 31, 2022[42]. - The company has made loans related to 21 properties with a carrying value of $649,267,000, classified as in substance real estate investments[43]. Green Bonds and Sustainability Initiatives - The company issued an inaugural green bond of $500,000,000 with a 2.700% interest rate due in 2027 and an additional green bond of $550,000,000 with a 3.85% interest rate due in 2032[56]. - The company has utilized $572,090,000 of proceeds from green bond issuances for energy efficiency, water conservation, and green building projects as of September 30, 2022[56]. - The company has been recognized as an ENERGY STAR Partner of the Year for four consecutive years, maintaining the highest level of Sustained Excellence[59]. - The company’s ESG initiatives have led to an MSCI ESG rating improvement from AA to AAA[52]. Employee and Board Diversity - The company’s U.S. employees self-identified as 51% male and 49% female, with a diverse ethnic composition including 80% White, 8% Hispanic or Latino, and 4% Black or African American[58]. - The Board of Directors consists of 60% male and 40% female members, with 20% identifying as Black or African American and 20% as Hispanic or Latino[62]. - The company’s overall employee engagement score improved in 2022 compared to 2021 due to management actions taken on previous survey results[65]. - The company has a commitment to diversity and inclusion, supported by various employee network groups and initiatives[60]. Regulatory Compliance and Risks - Compliance with federal and state health care regulations is critical, as failure to do so can result in loss of accreditation, fines, or exclusion from government programs[74]. - The Health Reform Laws have significantly altered health care delivery and reimbursement, with ongoing reforms expected to impact operators and tenants[77]. - Data privacy laws, including the California Consumer Privacy Act and the Virginia Consumer Data Protection Act, impose new compliance obligations that may affect business operations[81]. - Operators face substantial financial penalties for noncompliance with health care fraud and abuse laws, which could adversely affect their financial condition[78]. - Increased scrutiny and enforcement actions in the health care industry are expected to continue, potentially impacting operators' liquidity and ability to meet obligations[79]. Taxation and REIT Compliance - The company intends to maintain its qualification as a REIT, which allows it to avoid U.S. federal income tax on distributed taxable income[89]. - If the company fails to distribute at least 90% of its REIT taxable income, it will be subject to tax on the undistributed amount at regular corporate tax rates[90]. - The company must satisfy two percentage tests regarding gross income each taxable year to maintain REIT status[99]. - The company is required to make distributions equal to at least 90% of its "REIT taxable income" to avoid being taxed as a regular corporation[117]. - The company must comply with various asset tests, including the 10% vote test and the 5% asset test, to maintain REIT status[104]. - Failure to qualify as a REIT would subject the company to U.S. federal income tax at regular corporate rates, reducing cash available for distribution to stockholders[121]. Market Risks and Financial Strategies - The company is exposed to market risks, including interest rate fluctuations and foreign currency exchange rates, which it seeks to mitigate through various financial strategies[410]. - The company historically borrows on its unsecured revolving credit facility and commercial paper program to finance health care and seniors housing properties[411]. - The total variable rate debt outstanding as of December 31, 2022, was $2,426,134,000, with a projected increase in annual interest expense of $24,261,000 due to a hypothetical 1% increase in interest rates[412]. - Currency fluctuations may impact net income from investments in Canada and the UK, with a potential increase or decrease of less than $8,000,000 if exchange rates change by 10%[413]. - The company plans to mitigate foreign currency exposures through non-U.S. denominated borrowings and derivative contracts[413]. - The company may increase its international presence through investments or acquisitions in seniors housing and healthcare properties outside the U.S.[413].

Financial Data and Key Metrics Changes - Welltower reported fourth quarter normalized funds from operations of $0.83 per diluted share, representing 7% year-over-year growth after adjusting for prior period government grants and FX headwinds [37] - Total portfolio same-store NOI growth in the quarter was 12.9% year-over-year [37] - The company ended the year with $722 million of cash and $5.1 billion in near-term available liquidity [44] Business Line Data and Key Metrics Changes - The senior housing operating portfolio experienced a 28.1% fourth quarter NOI increase over the prior year's quarter, driven by revenue growth of 10.3% [28] - The outpatient medical business had same-store NOI growth of 2.1% over the prior year's quarter, with same-store occupancy steady at nearly 95% [27] - Agency expenses in the same-store portfolio decreased by 44% year-over-year in Q4 2022, contributing to a moderation in overall expense growth [30] Market Data and Key Metrics Changes - Revenue per occupied room (REVPOR) increased by 7.5% in Q4, reflecting strong pricing power [10] - Average occupancy in the portfolio improved with a gain of 20 basis points during the period [29] - The company expects 2023 same-store NOI growth of 8% to 13%, driven by various segments including senior housing operating growth of 15% to 24% [49] Company Strategy and Development Direction - The company aims to deepen relationships with existing operating partners rather than expanding the number of partners, focusing on regional density [59] - The Private Letter Ruling (PLR) allows Welltower to own and self-manage independent living assets, which is expected to enhance margins and operational efficiency [14][72] - Welltower is committed to modernizing operations and driving efficiencies through scale, leveraging technology and data analytics [47][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth supported by favorable demand-supply dynamics in the senior housing sector [12] - The company anticipates a strong start to 2023, with January move-ins up 16% compared to 2019 levels [13] - Management emphasized the importance of long-term value creation over short-term stock performance [7][51] Other Important Information - The company highlighted the addition of Retirement Unlimited as a new operating partner, which is expected to enhance operational performance [16] - Welltower's capital allocation strategy remains focused on acquiring high-quality assets in a favorable investment environment [19] Q&A Session All Questions and Answers Question: What is the landscape of high-quality operators after pandemic headwinds? - Management indicated that the focus is on deepening relationships with existing partners rather than expanding the number of operators, emphasizing the need for higher standards in the industry [59] Question: Have return rates changed for different property types? - Management noted that there are significant opportunities across all product types, with the potential for higher IRRs than seen in the past [63][64] Question: How should we think about the investment year and payoffs? - Management stated that returns are already being realized through aggressive asset management, with expectations for continued significant margin improvement [66] Question: What is the expected range of margins for the SHO business at full occupancy? - Management refrained from speculating but expressed disappointment if margins only returned to pre-COVID levels [69] Question: Can you elaborate on the impact of the PLR on earnings growth? - Management explained that the PLR allows for a shift from fee management to owner-operator, which is expected to significantly improve margins [72][74] Question: How has the relationship with independent living operators changed since the PLR? - Forward-thinking operators are more willing to collaborate on building out the platform, while those stuck in outdated practices are less likely to engage [76] Question: What is the status of the ProMedica and Integra assets? - Management reported smooth transitions with new operators, but it is too early to discuss performance metrics [79] Question: What investment opportunities are currently available? - Management highlighted that opportunities are present across all product types, with a focus on right location and product basis [81]