Core Insights - Welltower's shares have increased by 28.9% year-to-date, significantly outperforming the industry's growth of 1.7% [1][8] Company Overview - Welltower owns a diversified portfolio of healthcare real estate assets across the U.S., Canada, and the U.K., positioning itself to benefit from the aging population and rising healthcare expenditures among senior citizens [2] - The company has a healthy balance sheet and is focused on portfolio repositioning, which is expected to support future growth [2] Financial Performance - In Q2 2025, Welltower reported a normalized FFO per share of $1.28, exceeding the Zacks Consensus Estimate of $1.22, and reflecting a year-over-year increase of 21.9% [3][8] - The total portfolio's same-store net operating income (SSNOI) grew significantly, driven by the SHO portfolio, marking the 11th consecutive quarter of over 20% year-over-year growth in SHO SSNOI [5][8] - The guidance for 2025 normalized FFO per share has been raised, with the Zacks Consensus Estimate now at $5.06 [4] Market Trends - The senior citizen population is projected to rise, leading to increased healthcare expenditures, which is favorable for Welltower's SHO portfolio [5] - The industry is experiencing muted new supply, which is beneficial for Welltower's revenue growth prospects [5] Strategic Initiatives - Welltower is enhancing its SHO portfolio through strategic acquisitions and capital recycling, with $2.08 billion allocated for 78 SHO properties from the beginning of the year through July 28, 2025 [6] - The company is also optimizing its outpatient management (OM) portfolio and strengthening relationships with health system partners to support long-term growth [9] Acquisition Activity - In March 2025, Welltower announced plans to acquire the Amica Senior Lifestyles portfolio for C$4.6 billion, and in February 2025, it acquired 48 skilled nursing facilities for $990.9 million [10] Financial Health - As of June 30, 2025, Welltower had $9.5 billion in available liquidity, including $4.5 billion in cash and a fully utilized $5 billion line of credit, indicating strong financial flexibility [11] - The net debt to adjusted EBITDA ratio improved to 2.93X from 3.68X year-over-year, with a well-laddered debt maturity profile averaging 5.8 years [11]

Core Insights - High dividend yields are attractive, but total return, which includes both dividend yield and share price change, is a more relevant measure of stock performance [1] - Five stocks are highlighted for their strong total returns and significant dividend increases of 10% or more in 2025 [2] Company Summaries Comfort Systems USA (FIX) - Announced a 10% increase in its quarterly dividend to $0.50, payable on Aug. 25 [2] - Current dividend yield is 0.26%, with a payout ratio of 9.25% and a 13-year track record of dividend payments [2] - Despite a low yield, the stock has risen over 600% since early 2022, reflecting strong earnings momentum and investor confidence [4] Wingstop (WING) - Achieved a total return of nearly 28% in 2025, with an 11% increase in its quarterly dividend to $1.08 [6] - Current dividend yield is 0.32%, with a payout ratio of 18% and a 7-year track record of dividend payments [5] - The stock's quarterly payout has grown at a compound annual growth rate of over 16% in the past three years [7] McKesson (MCK) - Recently increased its quarterly dividend by 15% to $0.82, payable on Oct. 1 [9] - Current dividend yield is 0.40%, with a payout ratio of 10.99% and a 17-year track record of dividend payments [9] - The stock has provided a total return of around 23% in 2025, with consistent dividend increases enhancing long-term value [11] Encompass Health (EHC) - Announced a nearly 12% increase in its quarterly dividend to $0.19, payable on Oct. 15 [12] - Current dividend yield is 0.58%, with a payout ratio of 14.05% and a 2-year track record of dividend payments [12] - The company has achieved a total return of over 18% in 2025, indicating a focus on long-term capital returns [13] Welltower (WELL) - Increased its quarterly dividend by 10.4% to $0.74, payable on Aug. 21 [15] - Current dividend yield is 1.59%, with a payout ratio of 151.41% and a 2-year track record of dividend payments [14] - The stock has achieved a total return of over 33% in 2025, reflecting improving fundamentals and consistent dividend growth [16] Overall Market Trends - The five highlighted stocks are increasing their dividends, which is crucial as they have experienced significant share price appreciation [18] - Dividend increases help mitigate the decline in yield due to rising share prices, enhancing the overall return profile for investors [18]

Company Overview - Welltower (NYSE: WELL) is an American healthcare REIT that owns a total of 2,217 properties across the USA (1,817), United Kingdom (210), and Canada (136) [1] - The annualized net operating income (NOI) of Welltower is $3.5 billion, with 58% of this income coming from Senior Housing Operating [1] Market Position - Welltower's diverse portfolio spans multiple countries, indicating a strong international presence in the healthcare real estate sector [1] - The significant contribution from Senior Housing Operating highlights the company's focus on senior living facilities, which may be a strategic advantage given the aging population [1]

Core Insights - Welltower Inc. (WELL) reported a second-quarter 2025 normalized funds from operations (FFO) per share of $1.28, exceeding the Zacks Consensus Estimate of $1.22, and reflecting a year-over-year increase of 21.9% [1][10] - The company's revenues for the quarter reached $2.55 billion, surpassing the Zacks Consensus Estimate by 2.11%, and showing a year-over-year growth of 39.6% [2] - Welltower increased its guidance for 2025 normalized FFO per share to a range of $5.06-$5.14, up from the previous range of $4.90-$5.04, with the Zacks Consensus Estimate at $5.02 [8][10] Financial Performance - The same-store net operating income (SSNOI) for the total portfolio grew by 13.8% year over year, driven by a 23.4% increase in the seniors housing operating (SHO) portfolio [3][10] - The SHO portfolio's same-store revenues increased by 10.1% year over year, supported by a 420 basis points rise in average occupancy and a 4.9% growth in Revenue per Occupied Room (RevPOR) [3][10] - Property operating expenses rose by 36.3% to $1.51 billion year over year [5] Investment Activities - Welltower's pro-rata gross investments in the second quarter totaled $1.16 billion, which included $1.04 billion in acquisitions and loan funding, and $113.3 million in development funding [4] - The company completed pro-rata property dispositions of $28.3 million and loan repayments of $92.2 million during the quarter [4] Balance Sheet and Liquidity - As of June 30, 2025, Welltower had $9.5 billion in available liquidity, consisting of $4.5 billion in available cash and restricted cash, along with full capacity under its $5 billion line of credit [6] Dividend Information - On July 28, Welltower announced a cash dividend of 74 cents per share for the second quarter of 2025, marking a 10.4% increase compared to the previous dividend payout [7]

Financial Data and Key Metrics Changes - The company reported a strong FFO per share growth of 22%, exceeding expectations [5] - Full year FFO guidance was raised by $0.13 to $5.1 per share [6] - Same store NOI growth for the seniors housing operating portfolio was 23.4%, marking the eleventh consecutive quarter of growth exceeding 20% [6][15] - Year-over-year total portfolio same store NOI growth was 13.8% [31] Business Line Data and Key Metrics Changes - The outpatient medical business delivered a same store NOI growth of 2.6% [14] - The senior housing operating portfolio achieved another quarter of same store NOI growth well in excess of 20% [15] - The long-term post-acute portfolio saw same store NOI growth of 2.7% [32] Market Data and Key Metrics Changes - The UK portfolio experienced a 600 basis points increase in occupancy and 27% same store NOI growth [7] - Canada delivered 8.5% growth, while the U.S. and U.K. posted increases of 10.2% and 11.5%, respectively [15][16] - The company reported a 5% growth in RevPAR across all regions [17] Company Strategy and Development Direction - The company is focused on leveraging insights from its data science platform to drive portfolio and asset management initiatives [8] - A significant capital allocation of approximately $29 billion has been completed over the past five years, with $16 billion in asset sales to improve portfolio quality [9] - The company is transitioning properties to best-in-class regional operators to unlock operational potential [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand-supply dynamic for the industry, expecting further strengthening of RedPOR in the coming years [8] - The company is optimistic about the momentum in occupancy and anticipates NOI recovery in Q4 [11] - Management emphasized the importance of talent management and technology innovation as key areas of focus for future growth [36][40] Other Important Information - The company achieved a net debt to adjusted EBITDA ratio below three times and interest coverage over six times [12] - A quarterly dividend increase of 10.4% was announced, reflecting confidence in cash flow durability [34] - The company has trained over 8,000 site employees on its Well Towered Business System [21] Q&A Session Summary Question: Future growth potential and capital deployment - Management highlighted that while they are proud of achievements, they remain focused on continuous improvement and avoiding complacency [45][46] Question: Performance of non-same store assets - Management noted that non-same store assets include under-occupied and under-optimized properties, which are expected to improve over time [53][54] Question: Technology and data integration for customer experience - Management discussed the evolution of their technology strategy to enhance customer experience and operational efficiency [58][61] Question: Competitive dynamics for investments - Management indicated that there are ample opportunities to enhance cash flow profiles in a fragmented industry [80][82] Question: Optimal capital stack and leverage - Management emphasized the importance of maintaining a strong balance sheet and liquidity while exploring various capital sources for investments [86][88] Question: Potential for margin expansion - Management expressed confidence in significant margin expansion opportunities driven by revenue growth and operational efficiencies [90][92]

Financial Data and Key Metrics Changes - The company reported a strong FFO per share growth of 22%, exceeding expectations [3] - Full year FFO guidance was raised by $0.13 to $5.1 per share [4] - Same store NOI growth for the seniors housing operating portfolio was 23.4%, marking the eleventh consecutive quarter of growth exceeding 20% [4] - Year-over-year total portfolio same store NOI growth was 13.8% [12][29] - Net income attributable to common stockholders was $0.45 per diluted share, with normalized FFO at $1.28 per diluted share, representing 21.9% year-over-year growth [29] Business Line Data and Key Metrics Changes - The outpatient medical business delivered same store NOI growth of 2.6% year over year, with a retention rate of 94.2% [12] - The senior housing operating portfolio achieved another quarter of same store NOI growth well in excess of 20% [12] - The long-term post-acute portfolio saw same store NOI growth of 2.7% year over year [30] Market Data and Key Metrics Changes - The UK portfolio experienced a 600 basis point increase in occupancy and 27% same store NOI growth, indicating strong market demand [4] - Canada delivered 8.5% growth, while the U.S. and U.K. posted increases of 10.2% and 11.5%, respectively [13] Company Strategy and Development Direction - The company is focused on leveraging insights from its data science platform to drive portfolio and asset management initiatives [5] - There is a commitment to improving operational efficiency through the Welltower Business System (WBS) [17] - The company aims to enhance customer and employee experiences while addressing inefficiencies in the industry [19] - A refined focus on technology and data innovation is being emphasized to improve operational capabilities [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand-supply dynamics for the senior housing business, anticipating continued growth [39] - The company is optimistic about future margin expansion driven by revenue growth and operational efficiencies [92] - Management highlighted the importance of maintaining a dynamic organizational culture to avoid complacency [44] Other Important Information - The company completed approximately $9.2 billion in investment activity year-to-date, with a robust pipeline of acquisitions [10][22] - The balance sheet has improved significantly, with net debt to adjusted EBITDA below three times and total liquidity at $9.5 billion [10] Q&A Session Summary Question: Future growth potential and capital deployment - Management emphasized that while they are proud of their achievements, they remain focused on continuous improvement and avoiding complacency [44][47] Question: Performance of non-same store assets - Management noted that non-same store assets include under-occupied and under-optimized properties, which may impact their performance metrics compared to same store assets [51][52] Question: Technology and data application for customer experience - Management is expanding the focus on operational technology to enhance customer experiences, integrating various technology initiatives [56][60] Question: Competitive dynamics for investments - Management believes there are ample opportunities to enhance cash flow profiles of assets due to the fragmented nature of the industry [81] Question: Optimal capital stack and leverage - Management stated that maintaining a strong balance sheet and liquidity is crucial, and they will consider various capital sources for investments [88] Question: Potential for margin expansion - Management is optimistic about significant margin expansion driven by both revenue growth and expense management [92][94]

Financial Performance - Welltower reported normalized FFO per share of $1.28, a year-over-year increase of 22%[12] - The company revised its full-year FFO guidance midpoint to $5.10, up from $4.97, driven by strong seniors housing operating (SHO) fundamentals and accretive capital deployment[12] - SHO portfolio same-store net operating income (SSNOI) grew by 23.4%, marking the 11th consecutive quarter with growth exceeding 20%[12] - Year-over-year occupancy growth in the SHO portfolio reached 420 bps, the highest in the company's recorded history outside of the post-COVID recovery[12, 24] - Operating margins expanded by 330 bps year-over-year to 30.7%[12] - The Board of Directors announced a 10.4% increase in the quarterly dividend[12] Investment and Capital Deployment - Welltower announced $9.2 billion of pro rata gross investments year-to-date, including $3.7 billion closed in the first half of the year and $5.5 billion closed or under contract as of July 28, 2025[12] Balance Sheet and Liquidity - The company ended 2Q2025 with net debt to Adjusted EBITDA at 2.9x, the lowest level in the company's recorded history, and $9.5 billion of total near-term liquidity[12] - The Adjusted Fixed Charge Coverage Ratio was 6.3x, highlighting significant balance sheet strength and financial flexibility[12] Guidance and Outlook - The midpoint of the SS SHO Portfolio NOI is expected to grow 20.0%, which represents a 100 bps increase vs the prior midpoint[19] - The company anticipates year-over-year occupancy growth of approximately 360 bps[19]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for the periods ended June 30, 2025 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets and equity increased from December 31, 2024, driven by growth in net real estate investments Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------- | :-------------- | :------------------ | | Total assets | $55,833,495 | $51,044,308 | | Net real estate investments | $47,381,627 | $43,851,677 | | Cash and cash equivalents | $4,409,740 | $3,506,586 | | Total liabilities | $19,287,194 | $18,471,722 | | Total equity | $36,263,114 | $32,316,366 | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total revenues and net income grew significantly for the three and six months ended June 30, 2025 Consolidated Statements of Comprehensive Income Highlights (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenues | $2,548,244 | $1,824,884 | $4,971,331 | $3,684,625 | | Net income (loss) | $304,618 | $260,670 | $561,884 | $392,304 | | Net income (loss) attributable to common stockholders | $301,888 | $254,714 | $559,845 | $381,860 | | Diluted EPS (Net income attributable to common stockholders) | $0.45 | $0.42 | $0.85 | $0.65 | | Dividends declared and paid per common share | $0.67 | $0.61 | $1.34 | $1.22 | - Total comprehensive income attributable to common stockholders increased significantly to **$445,510 thousand** for the three months ended June 30, 2025, and to **$753,651 thousand** for the six months, primarily due to foreign currency translation gains[10](index=10&type=chunk) [Consolidated Statements of Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity increased due to net income and common stock issuances, partially offset by dividend payments Consolidated Statements of Equity Highlights (in thousands) | Metric | June 30, 2025 | January 1, 2025 | | :------------------------------------ | :-------------- | :-------------- | | Total Welltower Inc. stockholders' equity | $35,900,526 | $31,956,208 | | Net proceeds from issuance of common stock | $1,974,005 (Q2) + $2,231,225 (Q1) = $4,205,230 (YTD) | N/A | | Common stock dividends paid | $(439,348) (Q2) + $(431,041) (Q1) = $(870,389) (YTD) | N/A | | Accumulated other comprehensive income (loss) | $(166,014) | $(359,781) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased, while investing activities saw higher disbursements for acquisitions Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | Net cash provided from operating activities | $1,368,992 | $1,012,225 | | Net cash used in investing activities | $(3,427,273) | $(1,859,742) | | Net cash provided from financing activities | $2,726,661 | $1,637,685 | | Cash, cash equivalents and restricted cash at end of period | $4,523,511 | $2,863,598 | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes detail accounting policies, significant transactions, debt, equity, and segment performance [1. Business](index=9&type=section&id=1.%20Business) Welltower operates as a leading healthcare infrastructure REIT with over 1,500 properties in the US, UK, and Canada - Welltower Inc. is an S&P 500 company, operating over **1,500 seniors and wellness housing communities** and outpatient medical buildings in the United States, United Kingdom, and Canada[16](index=16&type=chunk) - The company is structured as an umbrella partnership REIT, with Welltower Inc. holding a **99.664% ownership interest** in Welltower OP LLC as of June 30, 2025[17](index=17&type=chunk) [2. Accounting Policies and Related Matters](index=9&type=section&id=2.%20Accounting%20Policies%20and%20Related%20Matters) The financial statements are prepared per U.S. GAAP, with new accounting standards under evaluation - The financial statements are prepared in accordance with **U.S. GAAP** for interim financial information[18](index=18&type=chunk) - The company is evaluating the potential impact of **ASU 2023-09**, 'Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024[19](index=19&type=chunk) - The company is evaluating the potential impact of **ASU 2024-03**, 'Disaggregation of Income Statement Expenses,' effective for annual reporting periods beginning after December 15, 2026[20](index=20&type=chunk) [3. Real Property Acquisitions and Development](index=9&type=section&id=3.%20Real%20Property%20Acquisitions%20and%20Development) Real property investments increased significantly through major acquisitions and development projects Real Property Investment Activity (Six Months Ended June 30, in thousands) | Segment | 2025 Totals | 2024 Totals | | :-------------------- | :------------ | :------------ | | Total net real estate assets acquired | $3,866,955 | $666,898 | | Cash disbursed for acquisitions | $2,936,818 | $607,527 | | Total cash invested in real property, net of cash acquired | $3,648,608 | $1,364,251 | - In February 2025, Welltower acquired **48 skilled nursing facilities for $990,908,000**, leased to Aspire Healthcare[26](index=26&type=chunk) - On October 1, 2024, Welltower acquired **Care UK**, operating 136 seniors housing properties, for **$841,546,000** (net of cash acquired)[27](index=27&type=chunk) - In March 2025, Welltower announced an agreement to acquire **38 seniors housing communities** from Amica Senior Lifestyles for **C$4.6 billion**[32](index=32&type=chunk) Construction in Progress Conversions (Six Months Ended June 30, in thousands) | Project Type | 2025 | 2024 | | :----------------------- | :--------- | :--------- | | Seniors Housing Operating | $506,732 | $194,012 | | Outpatient Medical | $267,916 | $106,596 | | Total development projects | $774,648 | $300,608 | [4. Intangible Assets and Goodwill](index=11&type=section&id=4.%20Intangible%20Assets%20and%20Goodwill) Goodwill increased significantly due to a measurement period adjustment for the Care UK acquisition Real Estate Intangibles (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :------------------ | | Net acquired lease intangibles | $655,236 | $665,944 | | Net below market tenant leases | $24,292 | $17,967 | Goodwill by Segment (in thousands) | Segment | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :------------------ | | Seniors Housing Operating | $140,162 | $80,904 | | Outpatient Medical | $68,321 | $68,321 | | Total Goodwill | $208,483 | $149,225 | - Goodwill increased by **$50,893 thousand** due to an acquisition measurement period adjustment, primarily related to the Care UK acquisition[37](index=37&type=chunk) [5. Dispositions, Real Property Held for Sale and Impairment](index=12&type=section&id=5.%20Dispositions,%20Real%20Property%20Held%20for%20Sale%20and%20Impairment) The company recorded impairment charges and completed significant dispositions, including joint venture dissolutions - As of June 30, 2025, **18 properties** with an aggregate real estate balance of **$108,925 thousand** were classified as held for sale[38](index=38&type=chunk) Impairment Charges (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :---------------- | :------- | :------- | | Impairment charges | $72,278 | $45,725 | Real Property Disposition Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :--------- | :--------- | | Total dispositions | $659,315 | $393,027 | | Cash proceeds from real estate dispositions | $410,809 | $129,773 | - During Q1 2025, Welltower substantially dissolved its Chartwell joint ventures, resulting in a **gain of $53,354 thousand**[42](index=42&type=chunk)[43](index=43&type=chunk) - In April 2024, Welltower closed the Canadian portion of the Revera joint venture dissolution, recognizing a **gain of $137,641 thousand**[46](index=46&type=chunk)[47](index=47&type=chunk) [6. Leases](index=14&type=section&id=6.%20Leases) Lease expenses and right-of-use assets increased, as did rental income from operating leases Lease Expense (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------- | :------- | :------- | | Total lease expense | $56,251 | $18,826 | Right of Use Assets and Lease Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------- | :-------------- | :------------------ | | Total right of use assets, net | $1,301,315 | $1,208,736 | | Total lease liabilities | $1,335,647 | $1,258,099 | Rental Income (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :--------- | :--------- | | Rental income related to operating leases | $944,607 | $753,463 | | Revenue from residential seniors apartment leases | $381,566 | $265,959 | - During the six months ended June 30, 2024, Welltower wrote off **$97,674 thousand** of previously recognized straight-line rent receivable[51](index=51&type=chunk) [7. Loans Receivable](index=15&type=section&id=7.%20Loans%20Receivable) Total loans receivable remained stable while the allowance for credit losses decreased Loans Receivable (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :------------------ | | Real estate loans receivable, net of credit allowance | $1,801,860 | $1,805,044 | | Non-real estate loans receivable, net of credit allowance | $230,277 | $222,542 | | Total loans receivable, net of credit allowance | $2,032,137 | $2,027,586 | Loan Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | Net cash advances (receipts) on loans receivable | $(121,795) | $442,086 | Allowance for Credit Losses on Loans Receivable (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Balance at beginning of period | $33,797 | $194,463 | | Provision for loan losses, net | $(3,120) | $6,177 | | Balance at end of period | $31,686 | $198,093 | [8. Investments in Unconsolidated Entities](index=16&type=section&id=8.%20Investments%20in%20Unconsolidated%20Entities) Investments in unconsolidated entities increased, and a new private funds management business was formed Investments in Unconsolidated Entities (in thousands) | Segment | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :------------------ | | Seniors Housing Operating | $1,638,479 | $1,412,708 | | Triple-net | $25,626 | $35,066 | | Outpatient Medical | $227,125 | $249,889 | | Non-segment/Corporate | $73,037 | $71,109 | | Total | $1,964,267 | $1,768,772 | - In January 2025, Welltower formed a private funds management business and launched its first seniors housing investment fund, holding an unconsolidated limited partner interest of **$279,338 thousand**[66](index=66&type=chunk)[68](index=68&type=chunk) [9. Credit Concentration](index=17&type=section&id=9.%20Credit%20Concentration) The top five relationships comprised 25% of total consolidated net operating income (NOI) Credit Concentration by Relationship (Six Months Ended June 30, 2025, in thousands) | Relationship | Number of Properties | Total NOI | Percent of NOI | | :-------------------------- | :------------------- | :---------- | :------------- | | Cogir Management Corporation | 172 | $153,352 | 8% | | Sunrise Senior Living | 81 | $106,234 | 5% | | Integra Healthcare Properties | 117 | $95,538 | 5% | | Aspire Healthcare | 102 | $95,214 | 5% | | Care UK | 169 | $94,462 | 5% | | Remaining portfolio | 1,586 | $1,449,430 | 72% | | Totals | 2,227 | $1,994,230 | 100% | [10. Borrowings Under Credit Facilities and Commercial Paper Program](index=17&type=section&id=10.%20Borrowings%20Under%20Credit%20Facilities%20and%20Commercial%20Paper%20Program) The company maintains a $5 billion credit facility and $2 billion commercial paper program with no outstanding balances - As of June 30, 2025, Welltower had a **$5,000,000,000 unsecured revolving credit facility** and a **$1,000,000,000 unsecured term credit facility**[70](index=70&type=chunk) - The commercial paper program allows for unsecured notes up to **$2,000,000,000**, with no outstanding amounts at June 30, 2025[71](index=71&type=chunk) Credit Facility and Commercial Paper Program Activity (in thousands) | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :---------------------------------------------------------------- | :--------------------------- | :--------------------------- | | Balance outstanding at quarter end | $0 | $0 | | Maximum amount outstanding at any month end | $600,000 | $600,000 | | Average amount outstanding | $157,473 | $79,171 | | Weighted average interest rate | 4.71% | 4.71% | [11. Senior Unsecured Notes and Secured Debt](index=18&type=section&id=11.%20Senior%20Unsecured%20Notes%20and%20Secured%20Debt) The total carrying value of debt increased, with significant activity in senior unsecured notes Total Carrying Value of Debt (June 30, 2025, in thousands) | Debt Type | Carrying Value | | :-------------------------- | :------------- | | Senior unsecured notes | $13,448,881 | | Secured debt | $2,522,222 | | Total carrying value of debt | $15,971,103 | Senior Unsecured Notes Principal Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Beginning balance | $13,326,465 | $13,699,619 | | Debt issued | $1,371,165 | $0 | | Debt extinguished | $(1,250,000) | $(1,350,000) | | Ending balance | $13,595,524 | $12,324,129 | Secured Debt Principal Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Beginning balance | $2,467,223 | $2,222,445 | | Debt assumed | $469,130 | $0 | | Debt extinguished | $(286,454) | $(211,805) | | Ending balance | $2,667,962 | $1,800,684 | - Welltower OP has **$1,035,000,000** of 2.750% exchangeable senior unsecured notes due 2028 and **$1,035,000,000** of 3.125% exchangeable senior unsecured notes due 2029[77](index=77&type=chunk) - As of June 30, 2025, Welltower was in **compliance in all material respects** with all covenants under its debt agreements[82](index=82&type=chunk) [12. Derivative Instruments](index=20&type=section&id=12.%20Derivative%20Instruments) The company uses various derivative instruments to manage foreign currency and interest rate risks Notional Amount of Derivatives (in thousands) | Derivative Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :-------------- | :------------------ | | Derivatives designated as net investment hedges (CAD) | $5,702,699 | $2,904,028 | | Derivatives designated as net investment hedges (GBP) | £1,530,708 | £1,430,708 | | Financial instruments designated as net investment hedges (CAD) | $250,000 | $250,000 | | Financial instruments designated as net investment hedges (GBP) | £1,050,000 | £1,050,000 | | Interest rate swaps designated as fair value hedges (USD) | $550,000 | $550,000 | Impact of Derivative Instruments on Comprehensive Income (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :---------------------------------------------------------------- | :----------- | :----------- | | Gain (loss) on derivative instruments designated as hedges recognized in income | $15,669 | $5,833 | | Gain (loss) on derivative and financial instruments designated as hedges recognized in OCI | $(413,839) | $9,096 | [13. Commitments and Contingencies](index=22&type=section&id=13.%20Commitments%20and%20Contingencies) The company has outstanding letters of credit and significant commitments for construction projects - As of June 30, 2025, Welltower had 19 outstanding letter of credit obligations totaling **$42,359 thousand**[96](index=96&type=chunk) - The company was committed to providing an additional **$366,856 thousand** to complete construction projects[96](index=96&type=chunk) - Welltower was committed to provide additional funds of **$99,534 thousand** related to outstanding investments classified as in substance real estate[96](index=96&type=chunk) [14. Stockholders' Equity](index=22&type=section&id=14.%20Stockholders'%20Equity) Common shares outstanding increased through the ATM Program, and the cash dividend was raised Common Stock Information | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :------------------ | | Issued shares | 665,249,281 | 637,056,054 | | Outstanding shares | 665,119,829 | 635,289,329 | - During the six months ended June 30, 2025, Welltower sold **27,593,276 shares** under its ATM Program, generating gross proceeds of approximately **$3,987,776 thousand**[100](index=100&type=chunk) Dividends Paid (Six Months Ended June 30, in thousands, except per share amounts) | Metric | 2025 | 2024 | | :------------------------------------ | :--------- | :--------- | | Common stock dividends paid (Amount) | $870,389 | $718,711 | | Common stock dividends paid (Per Share) | $1.34 | $1.22 | - On July 28, 2025, the Board declared a cash dividend of **$0.74 per share** for Q2 2025, a **10.4% increase** from the prior quarter[101](index=101&type=chunk) Accumulated Other Comprehensive Income (Loss) (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :-------------- | :------------------ | | Foreign currency translation | $(550,728) | $(1,276,625) | | Derivative and financial instruments designated as hedges | $384,714 | $916,844 | | Total accumulated other comprehensive income (loss) | $(166,014) | $(359,781) | [15. Stock Incentive Plans](index=23&type=section&id=15.%20Stock%20Incentive%20Plans) The 2022 Long-Term Incentive Plan was amended to increase authorized shares, and compensation expense rose - In April 2025, the 2022 Long-Term Incentive Plan was amended to increase the aggregate number of shares authorized for issuance by **10,000,000 shares**[103](index=103&type=chunk) Stock-Based Compensation Expense (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three months ended June 30, | $15,257 | $10,350 | | Six months ended June 30, | $32,762 | $22,398 | [16. Earnings Per Share](index=24&type=section&id=16.%20Earnings%20Per%20Share) Both basic and diluted earnings per share increased for the three and six months ended June 30, 2025 Earnings Per Share (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $0.46 | $0.42 | $0.86 | $0.65 | | Diluted EPS | $0.45 | $0.42 | $0.85 | $0.65 | | Weighted average number of common shares outstanding (Basic) | 656,593 | 600,545 | 650,029 | 587,297 | | Weighted average number of common shares outstanding (Diluted) | 668,140 | 604,563 | 661,004 | 591,047 | [17. Disclosure about Fair Value of Financial Instruments](index=24&type=section&id=17.%20Disclosure%20about%20Fair%20Value%20of%20Financial%20Instruments) Fair value measurements for financial instruments are provided, categorized into a three-level hierarchy - Fair value measurements are categorized into **Level 1** (quoted prices), **Level 2** (observable inputs), and **Level 3** (unobservable inputs)[108](index=108&type=chunk) Carrying Amounts and Estimated Fair Values of Financial Instruments (June 30, 2025, in thousands) | Financial Instrument | Carrying Amount | Fair Value | | :------------------------------------------------ | :-------------- | :--------- | | Mortgage loans receivable | $1,624,490 | $1,702,572 | | Senior unsecured notes | $13,448,881 | $14,224,425 | | Secured debt | $2,522,222 | $2,470,154 | | Foreign currency forward contracts, interest rate swaps and cross currency swaps (net asset) | $1,570 | $1,570 | | Foreign currency forward contracts, interest rate swaps and cross currency swaps (net liability) | $298,904 | $298,904 | Fair Value Measurements on a Recurring Basis (June 30, 2025, in thousands) | Financial Instrument | Total | Level 1 | Level 2 | Level 3 | | :------------------------------------------------ | :---------- | :------ | :-------- | :-------- | | Equity warrants | $72,123 | $0 | $0 | $72,123 | | Foreign currency forward contracts, interest rate swaps and cross currency swaps, net asset (liability) | $(297,334) | $0 | $(297,334) | $0 | | Totals | $(225,211) | $0 | $(297,334) | $72,123 | [18. Segment Reporting](index=26&type=section&id=18.%20Segment%20Reporting) Business is evaluated across three operating segments, with performance measured by consolidated NOI - Welltower's three operating segments are **Seniors Housing Operating, Triple-net, and Outpatient Medical**, with performance evaluated based on consolidated Net Operating Income (NOI)[121](index=121&type=chunk)[122](index=122&type=chunk) Consolidated Net Operating Income (NOI) by Segment (Six Months Ended June 30, 2025, in thousands) | Segment | NOI | | :-------------------- | :---------- | | Seniors Housing Operating | $1,020,642 | | Triple-net | $511,314 | | Outpatient Medical | $295,387 | | Non-segment/Corporate | $166,887 | | Total NOI | $1,994,230 | Total Assets by Segment (in thousands) | Segment | June 30, 2025 (Amount) | June 30, 2025 (%) | December 31, 2024 (Amount) | December 31, 2024 (%) | | :-------------------- | :--------------------- | :---------------- | :----------------------- | :-------------------- | | Seniors Housing Operating | $33,037,597 | 59.2% | $30,094,016 | 59.0% | | Triple-net | $8,880,142 | 15.9% | $7,934,415 | 15.5% | | Outpatient Medical | $7,495,922 | 13.4% | $7,530,815 | 14.8% | | Non-segment/Corporate | $6,419,834 | 11.5% | $5,485,062 | 10.7% | | Total | $55,833,495 | 100.0% | $51,044,308 | 100.0% | Revenues by Geography (Six Months Ended June 30, in thousands) | Country | 2025 (Amount) | 2025 (%) | 2024 (Amount) | 2024 (%) | | :-------------- | :-------------- | :------- | :-------------- | :------- | | United States | $3,833,740 | 77.2% | $3,077,070 | 83.5% | | United Kingdom | $792,316 | 15.9% | $324,772 | 8.8% | | Canada | $345,275 | 6.9% | $282,783 | 7.7% | | Total | $4,971,331 | 100.0% | $3,684,625 | 100.0% | [19. Income Taxes and Distributions](index=31&type=section&id=19.%20Income%20Taxes%20and%20Distributions) The company maintains its REIT status and operates qualified healthcare properties through TRSs - To qualify as a REIT, Welltower must distribute at least **90% of its taxable income** to stockholders[135](index=135&type=chunk) - Under RIDEA, Welltower leases 'qualified healthcare properties' to **Taxable REIT Subsidiaries (TRSs)**, with TRS operations subject to federal and state income taxes[136](index=136&type=chunk) - Welltower is evaluating the potential consequences of the OECD's proposed **global minimum tax (Pillar 2)** on its longer-term financial position[140](index=140&type=chunk) [20. Variable Interest Entities](index=32&type=section&id=20.%20Variable%20Interest%20Entities) Welltower consolidates certain Variable Interest Entities (VIEs) where it is the primary beneficiary Consolidated VIEs Balance Sheet (June 30, 2025, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :------------------ | | Total assets | $4,858,701 | $3,669,535 | | Total liabilities and equity | $4,858,701 | $3,669,535 | Revenues from Consolidated VIEs (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three months ended June 30, | $167,671 | $111,654 | | Six months ended June 30, | $312,134 | $221,584 | - Welltower's maximum exposure on unconsolidated VIEs is limited to the **net carrying value of the investments**[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operational results, strategy, and segment performance [Executive Summary](index=33&type=section&id=Executive%20Summary) This summary outlines Welltower's business, strategy, recent transactions, and key performance indicators [Company Overview](index=34&type=section&id=Company%20Overview) Welltower is a leading healthcare infrastructure company with a portfolio of over 1,500 properties - Welltower Inc. is an S&P 500 company, positioning its portfolio of **1,500+ seniors and wellness housing communities** at the intersection of housing, healthcare, and hospitality[154](index=154&type=chunk) - Welltower is the initial member and majority owner of Welltower OP, with an approximate ownership interest of **99.664%** as of June 30, 2025[155](index=155&type=chunk) Consolidated Portfolio by Property Type (Three Months Ended June 30, 2025, in thousands) | Type of Property | NOI | Percentage of NOI | Number of Properties | | :-------------------- | :---------- | :---------------- | :------------------- | | Seniors Housing Operating | $537,455 | 56.4% | 1,221 | | Triple-net | $265,102 | 27.9% | 636 | | Outpatient Medical | $148,977 | 15.7% | 370 | | Totals | $951,534 | 100.0% | 2,227 | [Business Strategy](index=34&type=section&id=Business%20Strategy) The strategy focuses on protecting capital, enhancing value, and increasing dividends through diversified investments - Primary objectives are to **protect stockholder capital, enhance stockholder value, and pay consistent, increasing cash dividends**[157](index=157&type=chunk) - Substantially all revenues are derived from operating lease rentals, resident fees and services, and interest earned[158](index=158&type=chunk) - Risk mitigation involves monitoring investments through financial statements, creditworthiness reviews, and property inspections[159](index=159&type=chunk) - Primary sources of cash include resident fees, rental income, interest receipts, borrowings, and dispositions[163](index=163&type=chunk) - As of June 30, 2025, Welltower had **$4,409,740 thousand in cash** and **$5,000,000 thousand in available borrowing capacity**[165](index=165&type=chunk) [Key Transactions](index=35&type=section&id=Key%20Transactions) The company executed significant capital transactions, including equity raises, debt management, and acquisitions - During the six months ended June 30, 2025, Welltower sold **27,593,276 shares** under its ATM Program, generating gross proceeds of approximately **$3,987,776 thousand**[166](index=166&type=chunk) - The company extinguished **$286,454 thousand** of secured debt and assumed **$469,130 thousand** of secured debt during the six months ended June 30, 2025[166](index=166&type=chunk) - In June 2025, Welltower repaid **$1,250,000 thousand** of 4.0% senior unsecured notes and issued **$1,250,000 thousand** of new senior unsecured notes[166](index=166&type=chunk) Property Acquisitions (Six Months Ended June 30, 2025, in thousands) | Segment | Properties | Book Amount | Capitalization Rates | | :-------------------- | :--------- | :---------- | :------------------- | | Seniors Housing Operating | 91 | $2,493,677 | 5.8% | | Triple-net | 88 | $1,348,880 | 9.0% | | Outpatient Medical | 1 | $24,398 | 5.8% | | Totals | 180 | $3,866,955 | 7.0% | Property Dispositions (Six Months Ended June 30, 2025, in thousands) | Segment | Properties | Proceeds | Book Amount | Capitalization Rates | | :-------------------- | :--------- | :--------- | :---------- | :------------------- | | Seniors Housing Operating | 30 | $524,158 | $471,786 | 9.1% | | Triple-net | 1 | $174,945 | $181,988 | 7.9% | | Outpatient Medical | 1 | $27,174 | $5,541 | 5.9% | | Totals | 32 | $726,277 | $659,315 | 8.7% | - Welltower's Board of Directors declared a cash dividend of **$0.74 per share** for the quarter ended June 30, 2025[167](index=167&type=chunk) [Key Performance Indicators, Trends and Uncertainties](index=36&type=section&id=Key%20Performance%20Indicators,%20Trends%20and%20Uncertainties) Key performance indicators show positive trends in operating performance and stable credit metrics Operating Performance Measures (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) | $304,618 | $260,670 | $561,884 | $392,304 | | NICS | $301,888 | $254,714 | $559,845 | $381,860 | | FFO | $825,717 | $493,773 | $1,590,914 | $1,050,476 | | NOI | $1,033,533 | $713,587 | $1,994,230 | $1,476,415 | | SSNOI | $668,586 | $587,002 | $1,312,850 | $1,154,939 | | Diluted NICS per share | $0.45 | $0.42 | $0.85 | $0.65 | | Diluted FFO per share | $1.24 | $0.82 | $2.41 | $1.78 | Credit Strength Measures | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :-------------- | :-------------- | | Net debt to book capitalization ratio | 24% | 27% | | Net debt to undepreciated book capitalization ratio | 19% | 22% | | Net debt to enterprise value ratio | 10% | 15% | | Interest coverage ratio | 6.75x | 5.59x | | Fixed charge coverage ratio | 6.03x | 5.21x | Concentration Risk by NOI (Three Months Ended June 30, 2025) | Category | Seniors Housing Operating | Triple-net | Outpatient Medical | | :-------------------- | :------------------------ | :--------- | :----------------- | | Property mix | 56% | 28% | 16% | | Relationship mix (Top 5) | Cogir (8%), Aspire (6%), Sunrise (5%), Care UK (5%), Integra (5%) | N/A | N/A | | Geographic mix (Top 5) | UK (13%), California (10%), Texas (10%), Canada (8%), Florida (7%) | N/A | N/A | [Corporate Governance](index=38&type=section&id=Corporate%20Governance) The Board and management are committed to high ethical standards and corporate governance guidelines - Welltower's Board of Directors and management are strongly committed to policies and procedures reflecting the **highest level of ethical business practices**[174](index=174&type=chunk) - Corporate governance guidelines provide the framework for business operations, emphasizing commitment to **increase stockholder value** and meet legal requirements[174](index=174&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=33&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity is managed through diverse cash sources to fund operations, dividends, and new investments [Sources and Uses of Cash](index=38&type=section&id=Sources%20and%20Uses%20of%20Cash) Cash flows increased from operating and financing activities, while investing activities saw higher cash use Sources and Uses of Cash Flows (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------------ | :----------- | :----------- | :----------- | :--------- | | Cash provided from operating activities | $1,368,992 | $1,012,225 | $356,767 | 35% | | Cash used in investing activities | $(3,427,273) | $(1,859,742) | $(1,567,531) | (84)% | | Cash provided from financing activities | $2,726,661 | $1,637,685 | $1,088,976 | 66% | | Effect of foreign currency translation | $143,674 | $(2,653) | $146,327 | 5516% | | Cash, cash equivalents and restricted cash at end of period | $4,523,511 | $2,863,598 | $1,659,913 | 58% | Cash Used in Non-Acquisition Capital Improvement Activities (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------------------ | :--------- | :--------- | :----------- | :--------- | | New development | $238,561 | $459,122 | $(220,561) | (48.0)% | | Recurring capital expenditures, tenant improvements and lease commissions | $152,736 | $118,964 | $33,772 | 28.4% | | Renovations, redevelopments and other capital improvements | $320,493 | $178,638 | $141,855 | 79.4% | | Total | $711,790 | $756,724 | $(44,934) | (5.9)% | [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) Off-balance sheet arrangements include unconsolidated entities, derivative instruments, and letters of credit - As of June 30, 2025, Welltower had investments in unconsolidated entities with ownership generally ranging from **10% to 95%**[181](index=181&type=chunk) - The company uses financial derivative instruments to hedge **interest rate and foreign currency exchange rate exposure**[181](index=181&type=chunk) - As of June 30, 2025, Welltower had 19 outstanding letter of credit obligations totaling **$42,359 thousand**[181](index=181&type=chunk)[96](index=96&type=chunk) [Contractual Obligations](index=40&type=section&id=Contractual%20Obligations) Total contractual obligations amount to $24.78 billion, primarily comprising senior notes and secured debt Summary of Payment Requirements Under Contractual Obligations (June 30, 2025, in thousands) | Contractual Obligations | Total | 2025 | 2026-2027 | 2028-2029 | Thereafter | | :------------------------------------ | :------------ | :------- | :---------- | :---------- | :----------- | | Senior unsecured notes and term credit facilities | $13,575,524 | $10,000 | $1,603,759 | $4,624,600 | $7,612,674 | | Secured debt | $3,444,105 | $177,335 | $732,090 | $639,659 | $1,895,021 | | Contractual interest obligations | $4,375,706 | $343,674 | $1,237,222 | $898,615 | $1,896,195 | | Financing lease liabilities | $454,163 | $4,036 | $15,434 | $10,757 | $423,936 | | Operating lease liabilities | $2,422,978 | $42,682 | $175,847 | $173,926 | $2,030,523 | | Purchase obligations | $483,335 | $265,768 | $206,055 | $411 | $11,101 | | Total contractual obligations | $24,775,811 | $843,495 | $4,970,407 | $6,469,133 | $12,492,776 | [Capital Structure](index=40&type=section&id=Capital%20Structure) The company maintains compliance with debt covenants and has filed for future equity and debt offerings - Welltower was in **compliance in all material respects** with all covenants under its debt agreements as of June 30, 2025[183](index=183&type=chunk) - On March 28, 2025, Welltower filed a new open-ended **universal shelf registration statement** on Form S-3 for future offerings[184](index=184&type=chunk) - The ATM Program allows Welltower to offer and sell up to **$7,500,000,000** aggregate amount of common stock, with approximately **$5,057,126,000** remaining capacity[186](index=186&type=chunk) - A registration statement for an enhanced dividend reinvestment plan (DRIP) allows for the issuance of up to **15,000,000 shares** of common stock[184](index=184&type=chunk) [Supplemental Guarantor Information](index=41&type=section&id=Supplemental%20Guarantor%20Information) Welltower fully and unconditionally guarantees all unsecured notes issued by its majority-owned subsidiary Welltower OP - Welltower **fully and unconditionally guarantees** all senior unsecured notes issued by Welltower OP, which is **99.664% owned** by Welltower[191](index=191&type=chunk) - Welltower meets the criteria in Rule 13-01 of Regulation S-X to **omit summarized financial information** for Welltower OP from its disclosures[191](index=191&type=chunk) [RESULTS OF OPERATIONS](index=33&type=section&id=RESULTS%20OF%20OPERATIONS) Results show strong growth in net income, FFO, and NOI across all operating segments [Summary](index=42&type=section&id=Summary) Welltower reported significant increases in key operating metrics for the three and six months ended June 30, 2025 Summary of Results of Operations (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Net income (loss) | $304,618 | $260,670 | 17% | $561,884 | $392,304 | 43% | | NICS | $301,888 | $254,714 | 19% | $559,845 | $381,860 | 47% | | FFO | $825,717 | $493,773 | 67% | $1,590,914 | $1,050,476 | 51% | | EBITDA | $941,864 | $777,240 | 21% | $1,824,442 | $1,428,246 | 28% | | NOI | $1,033,533 | $713,587 | 45% | $1,994,230 | $1,476,415 | 35% | | SSNOI | $668,586 | $587,002 | 14% | $1,312,850 | $1,154,939 | 14% | | Diluted NICS per share | $0.45 | $0.42 | 7% | $0.85 | $0.65 | 31% | | Diluted FFO per share | $1.24 | $0.82 | 51% | $2.41 | $1.78 | 35% | | Interest coverage ratio | 6.75x | 5.59x | 21% | 6.44x | 4.91x | 31% | | Fixed charge coverage ratio | 6.03x | 5.21x | 16% | 5.80x | 4.57x | 27% | [Seniors Housing Operating](index=42&type=section&id=Seniors%20Housing%20Operating) The segment experienced substantial revenue and NOI growth, driven by acquisitions and improved occupancy Seniors Housing Operating Segment Results (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Total revenues | $1,975,732 | $1,395,373 | 42% | $3,843,603 | $2,757,110 | 39% | | Property operating expenses | $1,438,277 | $1,034,906 | 39% | $2,822,961 | $2,054,253 | 37% | | NOI | $537,455 | $360,467 | 49% | $1,020,642 | $702,857 | 45% | Average Occupancy for Seniors Housing Operating | Period | 2025 | 2024 | | :-------------------- | :----- | :----- | | March 31, | 85.1% | 82.5% | | June 30, | 85.6% | 82.8% | SSNOI at Welltower's Share for Seniors Housing Operating (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | SSNOI | $379,900 | $309,094 | 22.9% | $739,824 | $601,001 | 23.1% | - During the six months ended June 30, 2025, Welltower recorded **$33,841 thousand** of impairment charges related to eight properties[196](index=196&type=chunk) - Construction conversions in the Seniors Housing Operating segment represented **$506,732 thousand** during the six months ended June 30, 2025[198](index=198&type=chunk) [Triple-net](index=45&type=section&id=Triple-net) The segment saw a substantial increase in rental income and NOI, primarily due to acquisitions Triple-net Segment Results (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Total revenues | $273,754 | $142,082 | 93% | $528,784 | $365,025 | 45% | | Property operating expenses | $8,652 | $10,495 | (18)% | $17,470 | $21,312 | (18)% | | NOI | $265,102 | $131,587 | 101% | $511,314 | $343,713 | 49% | - The increase in rental income was primarily due to the write-off of straight-line receivable balances of **$97,674 thousand** in the prior year, and acquisitions[203](index=203&type=chunk) - During the six months ended June 30, 2025, the Triple-net portfolio had 31 leases with rental rate increases, with a weighted average increase of **4.7%**[203](index=203&type=chunk) SSNOI at Welltower's Share for Triple-net (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | SSNOI | $154,305 | $148,507 | 3.9% | $307,385 | $296,034 | 3.8% | - During the six months ended June 30, 2025, Welltower recorded an impairment charge of **$38,437 thousand** related to six properties[205](index=205&type=chunk) [Outpatient Medical](index=46&type=section&id=Outpatient%20Medical) The segment demonstrated growth in rental income and NOI, driven by acquisitions and construction conversions Outpatient Medical Segment Results (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Total revenues | $211,811 | $197,237 | 7% | $422,827 | $395,547 | 7% | | Property operating expenses | $62,834 | $61,185 | 3% | $127,440 | $123,648 | 3% | | NOI | $148,977 | $136,052 | 10% | $295,387 | $271,899 | 9% | - Rental income increased primarily due to **acquisitions and construction conversions** during 2024 and year-to-date 2025[207](index=207&type=chunk) - For the six months ended June 30, 2025, the consolidated Outpatient Medical portfolio signed **180,454 square feet of new leases** and **889,273 square feet of renewals**[208](index=208&type=chunk) SSNOI at Welltower's Share for Outpatient Medical (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | SSNOI | $134,381 | $129,401 | 3.8% | $265,641 | $257,904 | 3.0% | - Construction conversions in the Outpatient Medical segment represented **$267,916 thousand** during the six months ended June 30, 2025[210](index=210&type=chunk) [Non-Segment/Corporate](index=48&type=section&id=Non-Segment/Corporate) Non-segment activities showed stable revenues and NOI, with a decrease in interest expense Non-Segment/Corporate Segment Results (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Total revenues | $86,947 | $90,192 | (4)% | $176,117 | $166,943 | 5% | | Property operating expenses | $4,948 | $4,711 | 5% | $9,230 | $8,997 | 3% | | NOI | $81,999 | $85,481 | (4)% | $166,887 | $157,946 | 6% | Non-Segment/Corporate Interest Expense (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Senior unsecured notes | $104,214 | $118,212 | (12)% | $220,638 | $246,172 | (10)% | | Unsecured credit facility and commercial paper program | $3,443 | $1,533 | 125% | $5,021 | $3,068 | 64% | | Loan expense | $9,750 | $4,691 | 108% | $17,012 | $9,252 | 84% | | Totals | $117,407 | $124,436 | (6)% | $242,671 | $258,492 | (6)% | - General and administrative expenses as a percentage of consolidated revenues were **2.57%** for the six months ended June 30, 2025, down from 2.96% in the prior year[213](index=213&type=chunk) - The provision for loan losses, net, was **$(3,120) thousand** for the six months ended June 30, 2025, a significant change from $6,177 thousand in the prior year[214](index=214&type=chunk) [OTHER](index=33&type=section&id=OTHER) This section details Non-GAAP measures, critical accounting policies, and forward-looking statements [Non-GAAP Financial Measures](index=49&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes Non-GAAP measures like FFO and NOI to provide supplemental performance insights - **FFO (Funds From Operations)** is defined as Net Income Attributable to Common Stockholders (NICS), adjusted for real estate-related items[216](index=216&type=chunk) - **NOI (Net Operating Income)** is total revenues less property operating expenses, used to evaluate property-level performance[217](index=217&type=chunk) - **SSNOI (Same Store Net Operating Income)** evaluates operating performance of a consistent property population[217](index=217&type=chunk) - **EBITDA and Adjusted EBITDA** are used to assess operational performance and determine coverage ratios[218](index=218&type=chunk)[219](index=219&type=chunk) - **Leverage ratios** measure the proportion of long-term debt to total capitalization[219](index=219&type=chunk)[232](index=232&type=chunk) FFO Reconciliation to NICS (Six Months Ended June 30, in thousands, except per share data) | Metric | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | Net income (loss) attributable to common stockholders | $559,845 | $381,860 | | Depreciation and amortization | $980,905 | $747,908 | | Impairment of assets | $72,278 | $45,725 | | Loss (gain) on real estate dispositions and acquisitions of controlling interests, net | $(66,627) | $(171,150) | | Noncontrolling interests | $(15,724) | $(18,344) | | Unconsolidated entities | $60,237 | $64,477 | | FFO | $1,590,914 | $1,050,476 | | Diluted NICS per share | $0.85 | $0.65 | | Diluted FFO per share | $2.41 | $1.78 | Consolidated NOI Reconciliation to Net Income (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | Net income (loss) | $561,884 | $392,304 | | Depreciation and amortization | $980,905 | $747,908 | | Interest expense | $286,119 | $280,742 | | Consolidated net operating income (NOI) | $1,994,230 | $1,476,415 | SSNOI at Welltower Share Reconciliation (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | | :-------------------- | :--------- | :--------- | | Seniors Housing Operating | $739,824 | $601,001 | | Triple-net | $307,385 | $296,034 | | Outpatient Medical | $265,641 | $257,904 | | Total SSNOI at Welltower Share | $1,312,850 | $1,154,939 | EBITDA Reconciliation to Net Income (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :----------- | :----------- | | Net income (loss) | $561,884 | $392,304 | | Interest expense | $286,119 | $280,742 | | Income tax expense (benefit) | $(4,466) | $7,292 | | Depreciation and amortization | $980,905 | $747,908 | | EBITDA | $1,824,442 | $1,428,246 | | Interest coverage ratio | 6.44x | 4.91x | | Fixed charge coverage ratio | 5.80x | 4.57x | Adjusted EBITDA Reconciliation to Net Income (Twelve Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :----------- | :----------- | | Net income (loss) | $1,142,437 | $615,466 | | Interest expense | $579,638 | $591,848 | | Income tax expense (benefit) | $(9,058) | $7,108 | | Depreciation and amortization | $1,865,090 | $1,467,952 | | Adjusted EBITDA | $3,567,078 | $2,816,379 | | Adjusted interest coverage ratio | 6.12x | 4.56x | | Adjusted fixed charge coverage ratio | 5.58x | 4.23x | Leverage Ratios Reconciliation (June 30, in thousands, except share price) | Metric | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | Net debt to book capitalization ratio | 24% | 27% | | Net debt to undepreciated book capitalization ratio | 19% | 22% | | Net debt to consolidated enterprise value ratio | 10% | 15% | [Critical Accounting Policies and Estimates](index=57&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statements rely on critical accounting estimates and assumptions subject to potential change - A critical accounting estimate is material due to **subjectivity and judgment**, or susceptibility to change[235](index=235&type=chunk) - Management believes current assumptions and estimates are appropriate but acknowledges that differing actual experience could have a **material adverse effect**[237](index=237&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=59&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This statement highlights risks and uncertainties that could cause actual results to differ from expectations - Forward-looking statements are **not guarantees of future performance** and involve risks and uncertainties[238](index=238&type=chunk) - Key risk factors include the status of the economy, capital markets, healthcare industry issues, and competition[238](index=238&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and foreign currency risks, which it mitigates through hedging - Welltower is exposed to market risks from adverse changes in **interest rates and foreign currency exchange rates**, which it mitigates using derivative contracts[239](index=239&type=chunk) Sensitivity Analysis on Fixed Rate Debt (June 30, 2025, in thousands) | Debt Type | Principal Balance | Change in Fair Value (1% increase in rates) | | :-------------------- | :---------------- | :---------------------------------------- | | Senior unsecured notes | $11,730,832 | $(543,317) | | Secured debt | $2,429,712 | $(106,624) | | Totals | $14,160,544 | $(649,941) | - A **1% increase in interest rates** on variable rate debt would result in increased annual interest expense of **$21,029 thousand**[242](index=242&type=chunk) - A **10% change in CAD or GBP exchange rates** would impact annualized net income by less than **$22,000 thousand**[243](index=243&type=chunk) - As of June 30, 2025, total foreign currency debt obligations were **$2,722,784 thousand**, and total notional amount of cross-currency interest rate swap contracts was **$6,345,249 thousand**[244](index=244&type=chunk)[245](index=245&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025 - Management concluded that Welltower's disclosure controls and procedures were **effective as of June 30, 2025**[247](index=247&type=chunk) - **No material changes** in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[247](index=247&type=chunk) [PART II. OTHER INFORMATION](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings that are not expected to have a material adverse effect - Welltower is subject to various legal proceedings arising in the **ordinary course of business**[249](index=249&type=chunk) - Management does not believe that the resolution of any legal proceedings will have a **material adverse effect** on the company's business or financial condition[249](index=249&type=chunk) - Third parties are contractually obligated to **indemnify, defend, and hold Welltower harmless** in some legal matters[249](index=249&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously identified in the Annual Report - **No material changes** from the risk factors identified in the Annual Report on Form 10-K for the year ended December 31, 2024[250](index=250&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company acquired a small number of shares for tax withholding and did not repurchase shares under its program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------------------------ | :----------------------------- | :--------------------------- | | April 1, 2025 through April 30, 2025 | 5,836 | $150.80 | | June 1, 2025 through June 30, 2025 | 1,053 | $149.88 | | Totals | 6,889 | $150.66 | - During the three months ended June 30, 2025, Welltower redeemed **2,269 OP Units** for common shares[252](index=252&type=chunk) - Welltower did not repurchase any shares under its **$3,000,000,000 Stock Repurchase Program** during the three months ended June 30, 2025[253](index=253&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements - No director or Section 16 officer adopted or terminated any **Rule 10b5-1 trading arrangements** or non-Rule 10b5-1 trading arrangements during the quarter[254](index=254&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q - Exhibits include amendments to LLC agreements, supplemental indentures, and incentive plans[256](index=256&type=chunk) - Certifications by the Chief Executive Officer, Co-President and Chief Financial Officer, and Chief Accounting Officer are included[256](index=256&type=chunk) [Signatures](index=63&type=section&id=Signatures) The report is duly signed by the Chief Executive Officer and other key financial officers - The report is signed by Shankh Mitra (CEO), Timothy G. McHugh (Co-President & CFO), and Joshua T. Fieweger (CAO) on **July 29, 2025**[260](index=260&type=chunk)

Core Insights - Welltower reported a revenue of $2.55 billion for the quarter ended June 2025, marking a 39.6% increase year-over-year and exceeding the Zacks Consensus Estimate by 2.11% [1] - The company's EPS for the quarter was $1.28, up from $0.42 in the same quarter last year, surpassing the consensus estimate of $1.22 by 4.92% [1] Revenue Breakdown - Interest income was reported at $62.06 million, which is a decrease of 2.2% year-over-year and below the average estimate of $68.81 million [4] - Resident fees and services generated $1.97 billion, exceeding the average estimate of $1.93 billion and reflecting a year-over-year increase of 41.5% [4] - Rental income reached $483.04 million, surpassing the estimated $455.09 million and showing a 43.8% increase compared to the previous year [4] - Other income was reported at $32.1 million, slightly above the average estimate of $24.78 million, with a minimal year-over-year change of -0.1% [4] Stock Performance - Over the past month, Welltower's shares have returned +6.2%, outperforming the Zacks S&P 500 composite's +4.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Welltower reported quarterly funds from operations (FFO) of $1.28 per share, exceeding the Zacks Consensus Estimate of $1.22 per share, and up from $1.05 per share a year ago [1][2] - The company achieved revenues of $2.55 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.11%, compared to $1.82 billion in the same quarter last year [3] - Welltower's stock has increased approximately 28.2% year-to-date, significantly outperforming the S&P 500's gain of 8.6% [4] Financial Performance - The FFO surprise for the recent quarter was +4.92%, following a previous surprise of +4.35% in the prior quarter [2] - Over the last four quarters, Welltower has consistently exceeded consensus FFO estimates [2][3] - The current consensus FFO estimate for the upcoming quarter is $1.28, with projected revenues of $2.56 billion, and for the current fiscal year, the estimates are $5.02 on revenues of $10.03 billion [8] Industry Context - Welltower operates within the Zacks REIT and Equity Trust - Other industry, which is currently ranked in the top 38% of over 250 Zacks industries [9] - The performance of Welltower's stock may be influenced by the overall outlook for the industry, as top-ranked industries tend to outperform lower-ranked ones by a significant margin [9] Future Outlook - The sustainability of Welltower's stock price movement will largely depend on management's commentary during the earnings call and future FFO expectations [4] - The estimate revisions trend for Welltower was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7]