Welltower(US:WELL)2026-02-12 11:49Revenue Segmentation - The Seniors Housing Operating segment accounted for 78%, 76%, and 72% of total revenues for the years ended December 31, 2025, 2024, and 2023, respectively[33]. - The Triple-net segment accounted for 11%, 10%, and 13% of total revenues for the years ended December 31, 2025, 2024, and 2023, respectively[38]. - The Outpatient Medical segment accounted for 7%, 10%, and 11% of total revenues for the years ended December 31, 2025, 2024, and 2023, respectively[40]. - For the year ended December 31, 2025, Care UK, Cogir Management Company, and Sunrise Senior Living accounted for 14%, 12%, and 10% of Seniors Housing Operating Segment revenues, respectively[33]. - As of December 31, 2025, 91% of the outpatient medical building portfolio was affiliated with health systems[39]. Financial Investments and Obligations - As of December 31, 2025, the company had outstanding construction investments of $738,859,000 and was committed to provide additional funds of approximately $493,027,000 to complete construction for consolidated investment properties[43]. - As of December 31, 2025, the company had outstanding loans, net of allowances, of $2,082,265,000 with an interest yield of approximately 8.9% per annum[44]. - Investments in unconsolidated entities amounted to $1,809,590,000 as of December 31, 2025[45]. - The company reported a principal balance of $12,700,485,000 in senior unsecured notes as of December 31, 2025, with a change in fair value of $(575,958,000)[443]. - The company has $4,064,010,000 in outstanding variable-rate debt, with a projected increase in annual interest expense of $40,640,000 if interest rates rise by 1%[443]. - The total principal amount of foreign currency debt obligations was $4,661,360,000 as of December 31, 2025, including $1,411,725,000 in Pounds Sterling and $3,249,635,000 in Canadian Dollars[445]. Operational Efficiency and Technology - The company operates a portfolio of over 2,500 properties, leveraging data science to enhance investment selection and predictive analytics[56]. - The data science platform has improved predictive analytics, allowing for better insights into demand and local labor market conditions[58]. - The company has integrated AI into its data science platform to extract insights from internal documents and improve operational efficiency[59]. - The company has implemented standardized data and technology practices to enhance operational efficiency across its seniors housing operating partner network[60]. - The company has streamlined performance management practices to create stronger connections between performance and compensation, fostering a culture of accountability[69]. Sustainability and Community Engagement - The company has committed to reducing greenhouse gas emissions, energy consumption, and waste production as part of its sustainability initiatives[61]. - The Welltower Charitable Foundation matches employee donations to verified organizations up to $2,500 per employee per year, promoting community engagement[64]. - The company maintained a top 30% ISS Quality Score ranking for both Environmental and Social categories, and preserved Prime status under the ISS-ESG Corporate Rating for the seventh consecutive year[65]. Employment and Organizational Structure - As of December 31, 2025, the company employed 712 individuals, with a focus on leadership development and organizational growth[67]. - The company transitioned back to a five-day in-office workweek to enhance collaboration and teamwork among employees[74]. Regulatory Compliance and Risks - Compliance with federal and state laws governing healthcare operations is critical, as violations can lead to substantial penalties and affect financial obligations[83]. - The implementation of new data privacy laws may require significant investment in compliance resources, impacting operational costs for healthcare providers[85]. - In the U.K., care home services are regulated under the Health and Social Care Act, requiring compliance with fundamental standards and inspections by relevant regulatory bodies[87]. - Non-compliance with regulatory standards in the U.K. can lead to enforcement actions, including suspension of registration and statutory penalties[88]. - The company is subject to the U.K. Bribery Act 2010, which includes strict liability offenses for failure to prevent bribery and tax evasion[92]. - The company must comply with the U.K. Modern Slavery Act 2015, publishing a statement on steps taken to prevent modern slavery in its business and supply chains[93]. Taxation and REIT Compliance - The company has undergone a reorganization, changing its name to Welltower OP Inc. and converting to a limited liability company, while maintaining its REIT status[98]. - The company intends to continue operating as a REIT, which allows it to avoid U.S. federal income tax on distributed taxable income[99]. - If the company fails to distribute at least 90% of its REIT taxable income, it will be subject to tax at regular corporate rates on the undistributed amount[101]. - The company must ensure that at least 75% of its gross income is derived from qualifying sources to maintain its REIT status, with specific tests for gross income and asset composition[114]. - At least 75% of the value of total assets must be represented by real estate assets, cash, and certain investments to comply with the 75% asset test[116]. - The company may face penalties if a subsidiary partnership takes actions that jeopardize its REIT status, potentially requiring asset disposal[108]. Market Risks and Financial Management - The company is exposed to market risks from adverse changes in interest rates and foreign currency exchange rates, which may affect financial condition and results of operations[439]. - The company seeks to mitigate interest rate fluctuations by matching new investments with long-term fixed-rate borrowings[439]. - The company has a risk of not being able to refinance existing indebtedness or that refinancing terms may not be favorable[442]. - The company has a strategy to manage foreign currency exposures through non-U.S. denominated borrowings and derivative contracts[444].