Welltower(WELL) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements for the periods ended June 30, 2025 Consolidated Balance Sheets 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 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] Consolidated Statements of Equity 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 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 These notes detail accounting policies, significant transactions, debt, equity, and segment performance 1. Business 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] - 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] 2. Accounting Policies and Related Matters 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] - 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] - 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] 3. Real Property Acquisitions and Development 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] - On October 1, 2024, Welltower acquired Care UK, operating 136 seniors housing properties, for $841,546,000 (net of cash acquired)[27] - In March 2025, Welltower announced an agreement to acquire 38 seniors housing communities from Amica Senior Lifestyles for C$4.6 billion[32] 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 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] 5. Dispositions, Real Property Held for Sale and Impairment 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] 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][43] - In April 2024, Welltower closed the Canadian portion of the Revera joint venture dissolution, recognizing a gain of $137,641 thousand[46][47] 6. Leases 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] 7. Loans Receivable 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 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][68] 9. Credit Concentration 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 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] - The commercial paper program allows for unsecured notes up to $2,000,000,000, with no outstanding amounts at June 30, 2025[71] 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 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] - As of June 30, 2025, Welltower was in compliance in all material respects with all covenants under its debt agreements[82] 12. Derivative Instruments 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 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] - The company was committed to providing an additional $366,856 thousand to complete construction projects[96] - Welltower was committed to provide additional funds of $99,534 thousand related to outstanding investments classified as in substance real estate[96] 14. Stockholders' Equity 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] 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] 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 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] 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 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 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] 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 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][122] 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 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] - Under RIDEA, Welltower leases 'qualified healthcare properties' to Taxable REIT Subsidiaries (TRSs), with TRS operations subject to federal and state income taxes[136] - Welltower is evaluating the potential consequences of the OECD's proposed global minimum tax (Pillar 2) on its longer-term financial position[140] 20. Variable Interest Entities 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operational results, strategy, and segment performance Executive Summary This summary outlines Welltower's business, strategy, recent transactions, and key performance indicators Company Overview 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] - 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] 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 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] - Substantially all revenues are derived from operating lease rentals, resident fees and services, and interest earned[158] - Risk mitigation involves monitoring investments through financial statements, creditworthiness reviews, and property inspections[159] - Primary sources of cash include resident fees, rental income, interest receipts, borrowings, and dispositions[163] - As of June 30, 2025, Welltower had $4,409,740 thousand in cash and $5,000,000 thousand in available borrowing capacity[165] Key Transactions 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] - 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] - 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] 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] Key Performance Indicators, Trends and Uncertainties 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 | $1.78 | Credit Strength Measures | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :-------------- | :-------------- | | Net debt to book capitalization ratio | 24% | 27% | | Net debt to undepreciated book capitalization ratio | 19% | 22% | | Net debt to enterprise value ratio | 10% | 15% | | Interest coverage ratio | 6.75x | 5.59x | | Fixed charge coverage ratio | 6.03x | 5.21x | Concentration Risk by NOI (Three Months Ended June 30, 2025) | Category | Seniors Housing Operating | Triple-net | Outpatient Medical | | :-------------------- | :------------------------ | :--------- | :----------------- | | Property mix | 56% | 28% | 16% | | Relationship mix (Top 5) | Cogir (8%), Aspire (6%), Sunrise (5%), Care UK (5%), Integra (5%) | N/A | N/A | | Geographic mix (Top 5) | UK (13%), California (10%), Texas (10%), Canada (8%), Florida (7%) | N/A | N/A | Corporate Governance The Board and management are committed to high ethical standards and corporate governance guidelines - Welltower's Board of Directors and management are strongly committed to policies and procedures reflecting the highest level of ethical business practices[174] - Corporate governance guidelines provide the framework for business operations, emphasizing commitment to increase stockholder value and meet legal requirements[174] LIQUIDITY AND CAPITAL RESOURCES Liquidity is managed through diverse cash sources to fund operations, dividends, and new investments Sources and Uses of Cash Cash flows increased from operating and financing activities, while investing activities saw higher cash use Sources and Uses of Cash Flows (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | 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 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] - The company uses financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure[181] - As of June 30, 2025, Welltower had 19 outstanding letter of credit obligations totaling $42,359 thousand[181][96] Contractual Obligations 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 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] - On March 28, 2025, Welltower filed a new open-ended universal shelf registration statement on Form S-3 for future offerings[184] - 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] - 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] Supplemental Guarantor Information 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] - Welltower meets the criteria in Rule 13-01 of Regulation S-X to omit summarized financial information for Welltower OP from its disclosures[191] RESULTS OF OPERATIONS Results show strong growth in net income, FFO, and NOI across all operating segments 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 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] - Construction conversions in the Seniors Housing Operating segment represented $506,732 thousand during the six months ended June 30, 2025[198] 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] - 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] 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] Outpatient Medical 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] - 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] 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] 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] - 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] OTHER This section details Non-GAAP measures, critical accounting policies, and forward-looking statements Non-GAAP Financial Measures 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] - NOI (Net Operating Income) is total revenues less property operating expenses, used to evaluate property-level performance[217] - SSNOI (Same Store Net Operating Income) evaluates operating performance of a consistent property population[217] - EBITDA and Adjusted EBITDA are used to assess operational performance and determine coverage ratios[218][219] - Leverage ratios measure the proportion of long-term debt to total capitalization[219][232] 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 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] - Management believes current assumptions and estimates are appropriate but acknowledges that differing actual experience could have a material adverse effect[237] Cautionary Statement Regarding Forward-Looking Statements 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] - Key risk factors include the status of the economy, capital markets, healthcare industry issues, and competition[238] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] 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] - A 10% change in CAD or GBP exchange rates would impact annualized net income by less than $22,000 thousand[243] - 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][245] Item 4. Controls and Procedures 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] - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[247] PART II. OTHER INFORMATION Item 1. Legal Proceedings 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] - 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] - Third parties are contractually obligated to indemnify, defend, and hold Welltower harmless in some legal matters[249] Item 1A. Risk Factors 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] - Welltower did not repurchase any shares under its $3,000,000,000 Stock Repurchase Program during the three months ended June 30, 2025[253] Item 5. Other Information 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] Item 6. Exhibits 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] - Certifications by the Chief Executive Officer, Co-President and Chief Financial Officer, and Chief Accounting Officer are included[256] 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]