Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Seniors Housing Operating

The following is a summary of our results of operations for the Seniors Housing Operating segment for the years presented (dollars in thousands):


	Year Ended				One Year Change				Year Ended		One Year Change				Two Year Change
	December 31,		December 31,						December 31,
	2024		2023		$		%		2022		$		%		$		%
Revenues:
Resident fees and services	$	6,027,149	$	4,753,804	$	1,273,345	27	%	$	4,173,711	$	580,093	14	%	$	1,853,438	44	%

Other income	8,312		9,743		(1,431)		-15	%	63,839		(54,096)		-85	%	(55,527)		-87	%
Total revenues	6,035,461		4,763,547		1,271,914		27	%	4,237,550		525,997		12	%	1,797,911		42	%
Property operating expenses	4,523,780		3,655,508		868,272		24	%	3,292,045		363,463		11	%	1,231,735		37	%
NOI(1)	1,511,681		1,108,039		403,642		36	%	945,505		162,534		17	%	566,176		60	%
Other expenses:
Depreciation and amortization	1,107,116		906,771		200,345		22	%	854,800		51,971		6	%	252,316		30	%
Interest expense	42,949		56,509		(13,560)		-24	%	34,833		21,676		62	%	8,116		23	%
Loss (gain) on extinguishment of debt, net	1,711		—		1,711		n/a		386		(386)		-100	%	1,325		343	%

Impairment of assets	85,564		24,999		60,565		242	%	13,146		11,853		90	%	72,418		551	%
Other expenses	96,435		96,972		(537)		-1	%	66,026		30,946		47	%	30,409		46	%
	1,333,775		1,085,251		248,524		23	%	969,191		116,060		12	%	364,584		38	%
Income (loss) from continuing operations before income taxes and other items	177,906		22,788		155,118		681	%	(23,686)		46,474		196	%	201,592		851	%
Income (loss) from unconsolidated entities	1,376		(70,940)		72,316		102	%	(53,507)		(17,433)		-33	%	54,883		103	%
Gain (loss) on real estate dispositions and acquisitions of controlling interests, net	134,082		68,290		65,792		96	%	5,794		62,496		n/a		128,288		n/a
Income (loss) from continuing operations	313,364		20,138		293,226		n/a		(71,399)		91,537		128	%	384,763		539	%
Net income (loss)	313,364		20,138		293,226		n/a		(71,399)		91,537		128	%	384,763		539	%
Less: Net income (loss) attributable to noncontrolling interests	(2,694)		(5,975)		3,281		55	%	(15,689)		9,714		62	%	12,995		83	%
Net income (loss) attributable to common stockholders	$	316,058	$	26,113	$	289,945	n/a		$	(55,710)	$	81,823	147	%	$	371,768	667	%

(1) See Non-GAAP Financial Measures below.

Resident fees and services revenue and property operating expenses for the year ended December 31, 2024 increased compared to the prior year primarily due to acquisitions, construction conversions outpacing dispositions and the conversions of Triple-net properties to Seniors Housing Operating RIDEA structures throughout the year. Additionally, our Seniors Housing Operating revenues are dependent on occupancy and rate growth, both of which have continued to steadily increase during 2024. Average occupancy is as follows:


	Three Months Ended(1)
	March 31,	June 30,	September 30,	December 31,
2023	79.0%	79.6%	80.7%	82.2%
2024	82.5%	82.8%	83.8%	84.8%

(1) Average occupancy includes our minority ownership share related to unconsolidated properties and excludes the minority partners' noncontrolling ownership share related to consolidated properties. Also excludes land parcels and properties under development.

The following is a summary of our SSNOI at Welltower's share for the Seniors Housing Operating segment (dollars in thousands):


	QTD Pool								YTD Pool
	Three Months Ended				Change				Year Ended				Change
	December 31, 2024		December 31, 2023		$		%		December 31, 2024		December 31, 2023		$		%
SSNOI(1)	$	295,897	$	238,547	$	57,350	24.0	%	$	977,345	$	817,584	$	159,761	19.5	%

(1) Relates to 660 properties for the QTD Pool and 545 properties for the YTD Pool. Please see Non-GAAP Financial Measures for additional information and reconciliations.

During the year ended December 31, 2024, we recorded impairment charges of $85,564,000 related to 18 properties. During the year ended December 31, 2023, we recorded impairment charges of $24,999,000 related to seven properties.

Transaction costs related to asset acquisitions are capitalized as a component of the purchase price. The fluctuation in other expenses is primarily due to the timing of noncapitalizable transaction costs associated with acquisitions and operator transitions. Changes in the gain on sales of properties are related to the volume and timing of property sales and the sales prices, which are further discussed in Note 5 to our consolidated financial statements.

Depreciation and amortization has increased as a result of acquisitions and segment transitions. To the extent we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

During the year ended December 31, 2024, we completed Seniors Housing Operating construction conversions representing $778,834,000 or $550,413 per unit. The following is a summary of our consolidated Seniors Housing Operating construction projects in process, excluding expansions, overhead and capitalized interest (dollars in thousands):


As of December 31, 2024
Expected Conversion Year(1)	Properties	Units/Beds	Anticipated Remaining Funding		Construction in Progress Balance
2025	18	2,978	$	174,735	$	705,248
2026	9	1,321	254,900		105,684


TBD(2)	3				46,665
Total	30				$	857,597

(1) Properties expected to be converted in phases over multiple years are reflected in the last expected year.
(2) Represents projects for which a final budget or expected conversion date are not yet known.

Interest expense represents secured debt interest expense, which fluctuates based on the net effect and timing of assumptions, segment transitions, fluctuations in interest rates, extinguishments and principal amortizations. The fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of extinguishments and terms of the related secured debt.

The following is a summary of our Seniors Housing Operating segment property secured debt principal activity (dollars in thousands):


	Year Ended December 31,
	2024			2023			2022
Beginning balance	$	1,955,048		$	1,701,939		$	1,599,522
Debt transferred	27,084			—			32,478
Debt issued	197,930			385,115			113,183
Debt assumed	427,725			381,837			288,522
Debt extinguished	(303,081)			(486,825)			(227,910)

Debt disposed	(164,640)			—			—
Principal payments	(41,220)			(47,672)			(47,399)
Foreign currency	(56,263)			20,654			(56,457)
Ending balance	$	2,042,583		$	1,955,048		$	1,701,939

Ending weighted average interest	4.29		%	4.68		%	4.32		%

A portion of our Seniors Housing Operating property investments are formed through partnership interests. Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. Income from unconsolidated entities during the year ended December 31, 2023 includes other-than-temporary impairment charges of $35,293,000, primarily related to unconsolidated management companies. Net income attributable to noncontrolling interests represents our partners’ share of net income (loss) related to joint ventures.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Triple-net

The following is a summary of our results of operations for the Triple-net segment for the years presented (dollars in thousands):


	Year Ended				One Year Change				Year Ended		One Year Change				Two Year Change
	December 31,		December 31,						December 31,
	2024		2023		$		%		2022		$		%		$		%
Revenues:
Rental income	$	777,297	$	814,751	$	(37,454)	-5	%	$	782,329	$	32,422	4	%	$	(5,032)	-1	%
Interest income	8,167		1,369		6,798		497	%	1,606		(237)		-15	%	6,561		409	%
Other income	3,307		70,986		(67,679)		-95	%	6,776		64,210		948	%	(3,469)		-51	%
Total revenues	788,771		887,106		(98,335)		-11	%	790,711		96,395		12	%	(1,940)		—	%
Property operating expenses	40,722		42,194		(1,472)		-3	%	44,483		(2,289)		-5	%	(3,761)		-8	%
NOI(1)	748,049		844,912		(96,863)		-11	%	746,228		98,684		13	%	1,821		—	%
Other expenses:
Depreciation and amortization	258,830		231,028		27,802		12	%	215,887		15,141		7	%	42,943		20	%
Interest expense	6,918		(65)		6,983		n/a		963		(1,028)		-107	%	5,955		618	%
Loss (gain) on derivatives and financial instruments, net	12		98		(86)		-88	%	1,499		(1,401)		-93	%	(1,487)		-99	%
Loss (gain) on extinguishment of debt, net	—		—		—		n/a		80		(80)		-100	%	(80)		-100	%
Provision for loan losses, net	—		297		(297)		-100	%	—		297		n/a		—		n/a
Impairment of assets	5,658		11,098		(5,440)		-49	%	3,595		7,503		209	%	2,063		57	%
Other expenses	10,793		5,060		5,733		113	%	13,043		(7,983)		-61	%	(2,250)		-17	%
	282,211		247,516		34,695		14	%	235,067		12,449		5	%	47,144		20	%
Income (loss) from continuing operations before income taxes and other items	465,838		597,396		(131,558)		-22	%	511,161		86,235		17	%	(45,323)		-9	%
Income (loss) from unconsolidated entities	(17,554)		7,158		(24,712)		-345	%	29,255		(22,097)		-76	%	(46,809)		-160	%
Gain (loss) on real estate dispositions and acquisitions of controlling interests, net	309,453		259		309,194		n/a		16,648		(16,389)		-98	%	292,805		n/a
Income (loss) from continuing operations	757,737		604,813		152,924		25	%	557,064		47,749		9	%	200,673		36	%
Net income (loss)	757,737		604,813		152,924		25	%	557,064		47,749		9	%	200,673		36	%
Less: Net income (loss) attributable to noncontrolling interests	19,764		21,804		(2,040)		-9	%	28,161		(6,357)		-23	%	(8,397)		-30	%
Net income (loss) attributable to common stockholders	$	737,973	$	583,009	$	154,964	27	%	$	528,903	$	54,106	10	%	$	209,070	40	%

(1) See Non-GAAP Financial Measures below.

Rental income decreased primarily due to agreements to convert Triple-net properties to Seniors Housing Operating RIDEA structures and the write-off of straight-line rent receivable balances of $139,652,000 and $16,642,000 during the years ended December 31, 2024 and 2023, respectively. These write-offs relate to leases for which the collection of substantially all contractual lease payments was no longer deemed probable, due primarily to agreements reached to convert Triple-net properties to Seniors Housing Operating RIDEA structures. These decreases are partially offset by acquisitions during the relevant periods.

Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase. For the year ended December 31, 2024, we had 64 leases with rental rate increases ranging from 0.05% to 20.05% in our Triple-net portfolio.

Interest income primarily related to leases that were classified as sales-type leases in 2024.

As part of the substantial exit of the Genesis HealthCare operating relationship, which we disclosed on March 2, 2021, we transitioned the sublease of a portfolio of seven facilities from Genesis HealthCare to Complete Care Management in the second quarter of 2021. As part of the March 2021 transaction, we entered into a forward sale agreement for the seven properties valued at $182,618,000, which was expected to close when the Welltower-held purchase option became exercisable. As of March 31, 2023, the right of use assets related to the properties were $115,359,000 and were reflected as held for sale with the corresponding lease liabilities of $66,530,000 on our Consolidated Balance Sheet.

On May 1, 2023, we executed a series of transactions that included the assignment of the leasehold interest to a newly formed tri-party unconsolidated joint venture comprised of Aurora Health Network, Peace Capital (an affiliate of Complete Care Management) and us, and culminated with the closing of the purchase option by the joint venture. The transactions resulted in net cash proceeds to us of $104,240,000 after our retained interest of $11,571,000 in the joint venture and a gain from the loss of control and derecognition of the leasehold interest of $65,485,000, which we recorded in other income within our Consolidated Statements of Comprehensive Income during the year ended December 31, 2023.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a summary of our SSNOI at Welltower's share for the Triple-net segment (dollars in thousands):


	QTD Pool								YTD Pool
	Three Months Ended				Change				Year Ended				Change
	December 31, 2024		December 31, 2023		$		%		December 31, 2024		December 31, 2023		$		%
SSNOI(1)	$	146,864	$	141,036	$	5,828	4.1	%	$	530,520	$	508,056	$	22,464	4.4	%

(1) Relates to 482 properties for the QTD Pool and 450 properties for the YTD Pool. Please see Non-GAAP Financial Measures for additional information and reconciliations.

Depreciation and amortization fluctuate as a result of the acquisitions, dispositions and segment transitions of Triple-net properties. To the extent we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

During the year ended December 31, 2024, we recorded impairment charges of $5,658,000 related to three properties. During the year ended December 31, 2023, we recorded impairment charges of $11,098,000 related to three properties.

Transaction costs related to asset acquisitions are capitalized as a component of purchase price. The fluctuation in other expenses is primarily due to noncapitalizable transaction costs from acquisitions and segment transitions. Changes in the gain on sales of properties are related to the volume and timing of property sales and the sales prices, which are further discussed in Note 5 to our consolidated financial statements.

Interest expense represents secured debt interest expense and related fees. The change in secured debt interest expense is due to the net effect and timing of assumptions, segment transitions, fluctuations in interest rates, extinguishments and principal amortizations. The following is a summary of our Triple-net secured debt principal activity for the periods presented (dollars in thousands):


	Year Ended December 31,
	2024			2023			2022
Beginning balance	$	38,260		$	39,179		$	72,536
Debt transferred	(27,084)			—			(32,478)

Debt assumed	532,575			—			39,574
Debt extinguished	(10,628)			—			(39,574)

Debt disposed	(194,500)			—			—
Principal payments	(3,071)			(919)			(879)

Ending balance	$	335,552		$	38,260		$	39,179

Ending weighted average interest	3.44		%	4.39		%	4.39		%

A portion of our Triple-net property investments were formed through partnerships. Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. The decrease in income from unconsolidated entities during the year ended December 31, 2024 is primarily related to the hypothetical liquidation at book value ("HLBV") adjustments to our unconsolidated entities (refer Note 2 for additional information.) Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Outpatient Medical

The following is a summary of our results of operations for the Outpatient Medical segment for the periods presented (dollars in thousands):


		Year Ended				One Year Change				Year Ended		One Year Change				Two Year Change
		December 31,		December 31,						December 31,
		2024		2023		$		%		2022		$		%		$		%
Revenues:
	Rental income	$	792,981	$	741,322	$	51,659	7	%	$	669,457	$	71,865	11	%	$	123,524	18	%

	Other income	9,132		9,167		(35)		—	%	8,998		169		2	%	134		1	%
	Total revenues	802,113		750,489		51,624		7	%	678,455		72,034		11	%	123,658		18	%
Property operating expenses		245,636		231,956		13,680		6	%	205,997		25,959		13	%	39,639		19	%
	NOI(1)	556,477		518,533		37,944		7	%	472,458		46,075		10	%	84,019		18	%
Other expenses:
	Depreciation and amortization	266,147		263,302		2,845		1	%	239,681		23,621		10	%	26,466		11	%
	Interest expense	1,150		10,543		(9,393)		-89	%	18,078		(7,535)		-42	%	(16,928)		-94	%
	Loss (gain) on extinguishment of debt, net	—		7		(7)		-100	%	15		(8)		-53	%	(15)		-100	%

	Impairment of assets	1,571		—		1,571		n/a		761		(761)		-100	%	810		106	%
	Other expenses	648		2,289		(1,641)		-72	%	2,537		(248)		-10	%	(1,889)		-74	%
		269,516		276,141		(6,625)		-2	%	261,072		15,069		6	%	8,444		3	%
Income (loss) from continuing operations before income taxes and other item		286,961		242,392		44,569		18	%	211,386		31,006		15	%	75,575		36	%
Income (loss) from unconsolidated entities		5,046		(549)		5,595		n/a		(2,626)		2,077		79	%	7,672		292	%
Gain (loss) on real estate dispositions and acquisitions of controlling interests, net		8,076		(651)		8,727		n/a		(6,399)		5,748		90	%	14,475		226	%
Income (loss) from continuing operations		300,083		241,192		58,891		24	%	202,361		38,831		19	%	97,722		48	%
Net income (loss)		300,083		241,192		58,891		24	%	202,361		38,831		19	%	97,722		48	%
Less: Net income (loss) attributable to noncontrolling interests		1,307		1,309		(2)		—	%	6,919		(5,610)		-81	%	(5,612)		-81	%
Net income (loss) attributable to common stockholders		$	298,776	$	239,883	$	58,893	25	%	$	195,442	$	44,441	23	%	$	103,334	53	%

(1) See Non-GAAP Financial Measures below.

Rental income increased due primarily to acquisitions and construction conversions that occurred during 2023 and 2024. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase. Our leases could renew above or below current rental rates, resulting in an increase or decrease in rental income. For the year ended December 31, 2024, our consolidated Outpatient Medical portfolio signed 384,643 square feet of new leases and 1,992,131 square feet of renewals. The weighted average term of these leases was eight years, with a rate of $42.22 per square foot and tenant improvement and lease commission costs of $30.50 per square foot. Substantially all of these leases contain an annual fixed or contingent escalation rent structure ranging from 2.0% to 6.5%.

The fluctuations in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions that occurred during 2023 and 2024. To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly.

The following is a summary of our SSNOI at Welltower share for the Outpatient Medical segment (dollars in thousands):


	QTD Pool								YTD Pool
	Three Months Ended				Change				Year Ended				Change
	December 31, 2024		December 31, 2023		$		%		December 31, 2024		December 31, 2023		$		%
SSNOI(1)	$	129,752	$	128,417	$	1,335	1.0	%	$	481,635	$	472,136	$	9,499	2.0	%

(1) Relates to 415 properties for the QTD Pool and 379 properties for the YTD Pool. Please see Non-GAAP Financial Measures for additional information and reconciliations.

During the year ended December 31, 2024, we recorded an impairment charge of $1,571,000 related to one property. No impairment was recorded in 2023.

Transaction costs related to asset acquisitions are capitalized as a component of purchase price. The fluctuation in other expenses is primarily due to noncapitalizable transaction costs. Changes in the gains/losses on sales of properties are related to the volume and timing of property sales and the sales prices, which are further discussed in Note 5 to our consolidated financial statements.

During the year ended December 31, 2024, we completed construction conversions representing $228,515,000 or $1,563 per square foot. The following is a summary of our consolidated Outpatient Medical construction projects in process, excluding expansions, overhead and capitalized interest (dollars in thousands):

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations


As of December 31, 2024
Expected Conversion Year	Properties	Square Feet	Anticipated Remaining Funding		Construction in Progress Balance
2025	7	646,940	$	110,664	$	256,505

TBD(1)	1				34,132
Total	8				$	290,637

(1) Represents projects for which a final budget or expected conversion date are not yet known.

Total interest expense represents secured debt interest expense. The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, fluctuations in interest rates, extinguishments and principal amortizations. The following is a summary of our Outpatient Medical secured debt principal activity (dollars in thousands):


	Year Ended December 31,
	2024			2023			2022
Beginning balance	$	229,137		$	388,836		$	530,254
Debt assumed	—			46,741			—
Debt extinguished	(137,011)			(200,955)			(131,582)
Principal payments	(3,038)			(5,485)			(9,836)
Ending balance	$	89,088		$	229,137		$	388,836

Ending weighted average interest	4.19		%	5.42		%	4.38		%

A portion of our Outpatient Medical property investments were formed through partnerships. Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. The increase from prior year is attribute to the gain recognized as part of the sale of one our unconsolidated properties. Net income attributable to noncontrolling interests represents our partners’ share of net income or loss relating to those partnerships where we are the controlling partner.

Non-segment/Corporate

The following is a summary of our results of operations for the Non-segment/Corporate activities for the periods presented (dollars in thousands):


		Year Ended				One Year Change				Year Ended		One Year Change				Two Year Change
		December 31,		December 31,						December 31,
		2024		2023		$		%		2022		$		%		$		%
Revenues:
	Interest income	$	248,024	$	166,985	$	81,039	49	%	$	148,965	$	18,020	12	%	$	99,059	66	%
	Other income	116,749		69,868		46,881		67	%	4,934		64,934		n/a		111,815		n/a
	Total revenues	364,773		236,853		127,920		54	%	153,899		82,954		54	%	210,874		137	%
Property operating expenses		20,073		18,118		1,955		11	%	16,245		1,873		12	%	3,828		24	%
	NOI(1)	344,700		218,735		125,965		58	%	137,654		81,081		59	%	207,046		150	%
Other expenses:
	Interest expense	523,244		540,859		(17,615)		-3	%	475,645		65,214		14	%	47,599		10	%

	General and administrative expenses	235,491		179,091		56,400		31	%	150,390		28,701		19	%	85,101		57	%
	Loss (gain) on derivatives and financial instruments, net	(27,899)		(2,218)		(25,681)		n/a		6,835		(9,053)		-132	%	(34,734)		-508
	Loss (gain) on extinguishments of debt, net	419		—		419		n/a		199		(199)		-100	%	220		111	%
	Provision for loan losses, net	10,125		9,512		613		6	%	10,320		(808)		-8	%	(195)		-2	%
	Other expenses	9,583		4,020		5,563		138	%	20,064		(16,044)		-80	%	(10,481)		-52	%
	Total expenses	750,963		731,264		19,699		3	%	663,453		67,811		10	%	87,510		13	%
Loss from continuing operations before income taxes and other items		(406,263)		(512,529)		106,266		21	%	(525,799)		13,270		3	%	119,536		23	%
Income (loss) from unconsolidated entities		10,636		10,889		(253)		-2	%	5,588		5,301		95	%	5,048		90	%
Income tax (expense) benefit		(2,700)		(6,364)		3,664		58	%	(7,247)		883		12	%	4,547		63	%

Loss from continuing operations		(398,327)		(508,004)		109,677		22	%	(527,458)		19,454		4	%	129,131		24	%
Net income (loss)		(398,327)		(508,004)		109,677		22	%	(527,458)		19,454		4	%	129,131		24	%
Less: Net income (loss) attributable to noncontrolling interests		2,800		907		1,893		209	%	(37)		944		n/a		2,837		n/a
Net loss attributable to common stockholders		$	(401,127)	$	(508,911)	$	107,784	21	%	$	(527,421)	$	18,510	4	%	$	126,294	24	%

(1) See Non-GAAP Financial Measures below.

The increase in interest income during the year ended December 31, 2024 is primarily driven by increased advances on loans receivable during the year.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The increase in other income for the year ended December 31, 2024 is primarily due to interest earned on deposits. Property operating expenses represent insurance costs related to our captive insurance company, which acts as a direct insurer of property level insurance coverage for our portfolio.

The following is a summary of our Non-segment/Corporate interest expense for the periods presented (dollars in thousands):


	Year Ended				One Year Change				Year Ended		One Year Change				Two Year Change
	December 31,		December 31,						December 31,
	2024		2023		$		%		2022		$		%		$		%
Senior unsecured notes	$	497,223	$	508,681	$	(11,458)	-2	%	$	436,185	$	72,496	17	%	$	61,038	14	%
Unsecured credit facility and commercial paper program	6,239		6,977		(738)		-11	%	19,576		(12,599)		-64	%	(13,337)		-68	%
Loan expense	19,782		25,201		(5,419)		-22	%	19,884		5,317		27	%	(102)		-1	%
Totals	$	523,244	$	540,859	$	(17,615)	-3	%	$	475,645	$	65,214	14	%	$	47,599	10	%

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments, as well as the movement in foreign exchange rates and related hedge activity. Please refer to Note 11 to the consolidated financial statements for additional information. The change in interest expense on our unsecured revolving credit facility and commercial paper program is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes. Please refer to Note 10 of our consolidated financial statements for additional information regarding our unsecured revolving credit facility and commercial paper program. Loan expenses represent the amortization of costs incurred in connection with senior unsecured notes issuances.

General and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2024, 2023 and 2022 were 2.95%, 2.70% and 2.57%, respectively. The increase during the year ended December 31, 2024 is primarily driven by compensation costs associated with increased employee headcount. During the three months ended September 30, 2024, we also recognized $29,838,000 as a cumulative catch up of stock compensation expense due to the change in the probability of achievement of specific performance goals related to special nonrecurring performance-based stock option and restricted stock awards granted in December 2021 and January 2022. Please refer to Note 15 for additional information related to these grants.

Other expenses includes noncapitalizable legal expenses. The provision for income taxes primarily relates to state taxes, foreign taxes and taxes based on income generated by entities that are structured as taxable REIT subsidiaries.

Loss (gain) on derivatives and financial instruments, net is primarily attributable to the mark-to-market of the equity warrants received as part of the HC-One Group transactions that closed in 2021 and 2023.

Other

Non-GAAP Financial Measures

We believe that net income and net income attributable to common stockholders, as defined by U.S. GAAP, are the most appropriate earnings measurements. However, we consider FFO, NOI, SSNOI, EBITDA and Adjusted EBITDA to be useful supplemental measures of our operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts ("NAREIT") created funds from operations attributable to common stockholders ("FFO") as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means NICS, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and acquisitions of controlling interests, and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests.

NOI is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining, and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to managers, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent general overhead costs that are unrelated to property operations and unallocable to the properties. These expenses include, but are not limited to, payroll and benefits related to corporate employees, professional services, office expenses and depreciation of corporate fixed assets. Same store NOI ("SSNOI") is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. We believe the drivers of property level NOI for both consolidated properties and unconsolidated properties are generally the same and therefore, we evaluate SSNOI based on our ownership interest in each property ("Welltower Share"). To arrive at Welltower's Share, NOI is adjusted by adding our minority ownership share related to unconsolidated properties and by subtracting the minority partners' noncontrolling ownership interests for consolidated properties. We do not control investments in unconsolidated properties and while we consider disclosures at Welltower Share to

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

be useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Acquisitions and development conversions are included in SSNOI five full quarters or eight full quarters after acquisition or being placed into service for the QTD Pool and the YTD Pool, respectively. Land parcels, loans and leased properties, as well as any properties sold or classified as held for sale during the respective periods are excluded from SSNOI. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from SSNOI until five full quarters or eight full quarters post completion of the redevelopment for the QTD Pool and YTD Pool, respectively. Properties undergoing operator transitions and/or segment transitions are also excluded from SSNOI until five full quarters or eight full quarters post completion of the transition for the QTD Pool and YTD Pool, respectively. In addition, properties significantly impacted by force majeure, acts of God, or other extraordinary adverse events are excluded from SSNOI until five full quarters or eight full quarters after the properties are placed back into service for the QTD Pool and YTD Pool, respectively. SSNOI excludes non-cash NOI and includes adjustments to present consistent ownership percentages and to translate Canadian properties and U.K. properties using a consistent exchange rate. We believe NOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.

EBITDA is defined as earnings (net income) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding unconsolidated entities and including adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses on disposition of properties and acquisitions of controlling interests, impairment of assets, gains/losses on derivatives and financial instruments, other expenses, other impairment charges and other adjustments as deemed appropriate. We believe that EBITDA and Adjusted EBITDA, along with net income, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. We primarily use these measures to determine our interest coverage ratio, which represents EBITDA and Adjusted EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA and Adjusted EBITDA divided by fixed charges. Fixed charges include total interest and secured debt principal amortization. Covenants in our unsecured senior notes and primary credit facility contain financial ratios based on a definition of EBITDA and Adjusted EBITDA that is specific to those agreements. Our leverage ratios are defined as the proportion of net debt to total capitalization and include book capitalization, undepreciated book capitalization and enterprise value. Book capitalization represents the sum of net debt (defined as total long-term debt, excluding operating lease liabilities, less cash and cash equivalents and restricted cash), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Enterprise value represents book capitalization adjusted for the fair market value of our common stock.

Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results and in making operating decisions. Additionally, the Board of Directors utilizes these measures to evaluate management performance. None of our supplemental measures represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The table below reflects the reconciliation of FFO to NICS, the most directly comparable U.S. GAAP measure, for the periods presented. Noncontrolling interest and unconsolidated entity amounts represent adjustments to reflect our share of depreciation and amortization, gains/loss on real estate dispositions and impairment of assets. Amounts are in thousands except for per share data.


	Year Ended December 31,
FFO Reconciliation:	2024		2023		2022
Net income attributable to common stockholders	$	951,680	$	340,094	$	141,214
Depreciation and amortization	1,632,093		1,401,101		1,310,368
Impairment of assets	92,793		36,097		17,502
Loss (gain) on real estate dispositions and acquisitions of controlling interests, net	(451,611)		(67,898)		(16,043)
Noncontrolling interests	(30,812)		(46,393)		(56,529)
Unconsolidated entities	129,290		100,226		81,560
Funds from operations attributable to common stockholders	$	2,323,433	$	1,763,227	$	1,478,072

Average diluted shares outstanding:	608,750		518,701		465,158

Per diluted share data:
Net income attributable to common stockholders(1)	$	1.57	$	0.66	$	0.30
Funds from operations attributable to common stockholders	$	3.82	$	3.40	$	3.18

(1) Includes adjustment to the numerator for income (loss) attributable to OP Unitholders.

The tables below reflects the reconciliation of consolidated NOI to net income, the most directly comparable U.S. GAAP measure, for the years presented (dollars in thousands):


	Year Ended December 31,
NOI Reconciliation:	2024		2023		2022
Net income (loss)	$	972,857	$	358,139	$	160,568
Loss (gain) on real estate dispositions and acquisitions of controlling interests, net	(451,611)		(67,898)		(16,043)
Loss (income) from unconsolidated entities	496		53,442		21,290
Income tax expense (benefit)	2,700		6,364		7,247
Other expenses	117,459		108,341		101,670
Impairment of assets	92,793		36,097		17,502
Provision for loan losses, net	10,125		9,809		10,320
Loss (gain) on extinguishment of debt, net	2,130		7		680
Loss (gain) on derivatives and financial instruments, net	(27,887)		(2,120)		8,334
General and administrative expenses	235,491		179,091		150,390
Depreciation and amortization	1,632,093		1,401,101		1,310,368
Interest expense	574,261		607,846		529,519
Consolidated net operating income (NOI)	$	3,160,907	$	2,690,219	$	2,301,845

NOI by segment:
Seniors Housing Operating	$	1,511,681	$	1,108,039	$	945,505
Triple-net	748,049		844,912		746,228
Outpatient Medical	556,477		518,533		472,458
Non-segment/Corporate	344,700		218,735		137,654
Total NOI	$	3,160,907	$	2,690,219	$	2,301,845

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations


Quarterly NOI by Segment:
(in thousands)	Three Months Ended																Year Ended
	March 31,				June 30,				September 30,				December 31,				December 31,
	2024		2023		2024		2023		2024		2023		2024		2023		2024		2023
Seniors Housing Operating:
Total revenues	$	1,361,737	$	1,134,130	$	1,395,373	$	1,162,344	$	1,514,022	$	1,201,705	$	1,764,329	$	1,265,368	$	6,035,461	$	4,763,547
Property operating expenses	1,019,347		883,784		1,034,906		885,187		1,135,887		918,990		1,333,640		967,547		4,523,780		3,655,508
Consolidated NOI	$	342,390	$	250,346	$	360,467	$	277,157	$	378,135	$	282,715	$	430,689	$	297,821	$	1,511,681	$	1,108,039

Triple-net:
Total revenues	$	222,943	$	204,709	$	142,082	$	266,015	$	228,649	$	196,809	$	195,097	$	219,573	$	788,771	$	887,106
Property operating expenses	10,817		11,723		10,495		10,598		9,345		10,044		10,065		9,829		40,722		42,194
Consolidated NOI	$	212,126	$	192,986	$	131,587	$	255,417	$	219,304	$	186,765	$	185,032	$	209,744	$	748,049	$	844,912

Outpatient Medical:
Total revenues	$	198,310	$	184,740	$	197,237	$	186,097	$	204,995	$	191,860	$	201,571	$	187,792	$	802,113	$	750,489
Property operating expenses	62,463		58,365		61,185		58,697		62,778		62,204		59,210		52,690		245,636		231,956
Consolidated NOI	$	135,847	$	126,375	$	136,052	$	127,400	$	142,217	$	129,656	$	142,361	$	135,102	$	556,477	$	518,533

Non-segment/Corporate:
Total revenues	$	76,751	$	37,150	$	90,192	$	51,022	$	107,997	$	71,639	$	89,833	$	77,042	$	364,773	$	236,853
Property operating expenses	4,286		3,881		4,711		4,190		4,691		4,035		6,385		6,012		20,073		18,118
Consolidated NOI	$	72,465	$	33,269	$	85,481	$	46,832	$	103,306	$	67,604	$	83,448	$	71,030	$	344,700	$	218,735

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a reconciliation of the properties included in our QTD Pool and YTD Pool for SSNOI:


	QTD Pool				YTD Pool
SSNOI Property Reconciliations:	Seniors Housing Operating	Triple-net	Outpatient Medical	Total	Seniors Housing Operating	Triple-net	Outpatient Medical	Total
Consolidated properties	1,156	592	371	2,119	1,156	592	371	2,119
Unconsolidated properties	76	—	76	152	76	—	76	152
Total properties	1,232	592	447	2,271	1,232	592	447	2,271
Recent acquisitions and development conversions(1)	(167)	(74)	(12)	(253)	(282)	(106)	(48)	(436)
Under development	(34)	—	(8)	(42)	(34)	—	(8)	(42)
Under redevelopment(2)	(2)	(4)	(2)	(8)	(2)	(4)	(2)	(8)
Current held for sale	(22)	(1)	—	(23)	(22)	(1)	—	(23)
Land parcels, loans and leased properties	(105)	(8)	(9)	(122)	(105)	(8)	(9)	(122)
Transitions(3)	(234)	(19)	—	(253)	(234)	(19)	—	(253)
Other(4)	(8)	(4)	(1)	(13)	(8)	(4)	(1)	(13)
Same store properties	660	482	415	1,557	545	450	379	1,374

(1) Acquisitions and development conversions will enter the QTD Pool five full quarters and the YTD Pool eight full quarters after acquisition or certificate of occupancy.
(2) Redevelopment properties will enter the QTD Pool after five full quarters and the YTD Pool after eight full quarters of operations post redevelopment completion.
(3) Transitioned properties will enter the QTD Pool after five full quarters and the YTD Pool after eight full quarters of operations with the new operator in place or under the new structure.
(4) Represents properties that are either closed or being closed.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a reconciliation of our consolidated NOI to same store NOI for the periods presented for the respective pools (dollars in thousands):


	QTD Pool				YTD Pool
	Three Months Ended				Twelve Months Ended
SSNOI Reconciliations:	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Seniors Housing Operating:
Consolidated NOI	$	430,689	$	297,821	$	1,511,681	$	1,108,039
NOI attributable to unconsolidated investments	23,282		20,488		90,812		65,281
NOI attributable to noncontrolling interests	(12,369)		(15,688)		(52,437)		(62,838)
NOI attributable to non-same store properties	(143,604)		(62,817)		(571,693)		(294,139)
Non-cash NOI attributable to same store properties	(1,834)		(2,757)		(756)		(2,328)
Currency and ownership adjustments (1)	(267)		1,500		(262)		3,569
SSNOI at Welltower Share	295,897		238,547		977,345		817,584

Triple-net:
Consolidated NOI	185,032		209,744		748,049		844,912
NOI attributable to unconsolidated investments	—		5,711		3,504		9,901
NOI attributable to noncontrolling interests	(5,314)		(12,584)		(29,387)		(31,361)
NOI attributable to non-same store properties	(56,108)		(38,316)		(172,633)		(240,832)
Non-cash NOI attributable to same store properties	23,533		(25,647)		(23,865)		(82,917)
Currency and ownership adjustments (1)	(279)		2,128		4,852		8,353
SSNOI at Welltower Share	146,864		141,036		530,520		508,056

Outpatient Medical:
Consolidated NOI	142,361		135,102		556,477		518,533
NOI attributable to unconsolidated investments	4,099		4,586		17,244		18,925
NOI attributable to noncontrolling interests	(2,491)		(2,308)		(9,898)		(15,400)
NOI attributable to non-same store properties	(8,742)		(3,607)		(63,145)		(35,787)
Non-cash NOI attributable to same store properties	(5,488)		(5,433)		(19,100)		(20,404)
Currency and ownership adjustments (1)	13		77		57		6,269
SSNOI at Welltower Share	129,752		128,417		481,635		472,136

SSNOI at Welltower Share:
Seniors Housing Operating	295,897		238,547		977,345		817,584
Triple-net	146,864		141,036		530,520		508,056
Outpatient Medical	129,752		128,417		481,635		472,136
Total	$	572,513	$	508,000	$	1,989,500	$	1,797,776

(1) Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.36 and to translate U.K. properties at a GBP/USD rate of 1.25.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The table below reflects the reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented. Dollars are in thousands.


	Year Ended December 31,
Adjusted EBITDA Reconciliation:	2024		2023		2022
Net income (loss)	$	972,857	$	358,139	$	160,568
Interest expense	574,261		607,846		529,519
Income tax expense (benefit)	2,700		6,364		7,247
Depreciation and amortization	1,632,093		1,401,101		1,310,368
EBITDA	3,181,911		2,373,450		2,007,702
Loss (income) from unconsolidated entities	496		53,442		21,290
Stock-based compensation expense	74,482		36,611		26,027
Loss (gain) on extinguishment of debt, net	2,130		7		680
Loss (gain) on real estate dispositions and acquisitions of controlling interests, net	(451,611)		(67,898)		(16,043)
Impairment of assets	92,793		36,097		17,502
Provision for loan losses, net	10,125		9,809		10,320
Loss (gain) on derivatives and financial instruments, net	(27,887)		(2,120)		8,334
Other expenses	117,459		108,341		101,670
Lease termination and leasehold interest adjustment (1)	—		(65,485)		(64,854)
Casualty losses, net of recoveries	12,261		10,107		10,391
Other impairment, net (2)	139,652		16,642		(620)
Adjusted EBITDA	$	3,151,811	$	2,509,003	$	2,122,399

Adjusted Interest Coverage Ratio:
Interest expense	$	574,261	$	607,846	$	529,519
Capitalized interest	58,115		50,699		30,491
Non-cash interest expense	(42,388)		(23,494)		(21,754)
Total interest	589,988		635,051		538,256
EBITDA	$	3,181,911	$	2,373,450	$	2,007,702
Interest coverage ratio	5.39x		3.74x		3.73x
Adjusted EBITDA	$	3,151,811	$	2,509,003	$	2,122,399
Adjusted interest coverage ratio	5.34x		3.95x		3.94x

Adjusted Fixed Charge Coverage Ratio:
Total interest	$	589,988	$	635,051	$	538,256
Secured debt principal payments	47,329		54,076		58,114
Total fixed charges	637,317		689,127		596,370
EBITDA	$	3,181,911	$	2,373,450	$	2,007,702
Fixed charge coverage ratio	4.99x		3.44x		3.37x
Adjusted EBITDA	$	3,151,811	$	2,509,003	$	2,122,399
Adjusted fixed charge coverage ratio	4.95x		3.64x		3.56x

(1) Primarily relates to the derecognition of leasehold interests and the gain recognized in other income.

(2) Represents the write-off or recovery of straight-line rent receivables balances relating to leases placed on cash recognition.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our leverage ratios include book capitalization, undepreciated book capitalization and enterprise value. Book capitalization represents the sum of net debt (defined as total long-term debt excluding operating lease liabilities, less cash and cash equivalents and restricted cash), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Enterprise value represents book capitalization adjusted for the fair market value of our common stock. Our leverage ratios are defined as the proportion of net debt to total capitalization. The table below reflects the reconciliation of our leverage ratios to our balance sheets for the periods presented. Amounts are in thousands, except share price.


	Year Ended December 31,
	2024			2023			2022
Book capitalization:
Unsecured credit facility and commercial paper	$	—		$	—		$	—
Long-term debt obligations(1)	15,608,294			15,815,226			14,661,552
Cash and cash equivalents and restricted cash	(3,711,457)			(2,076,083)			(722,292)
Total net debt	11,896,837			13,739,143			13,939,260
Total equity and noncontrolling interests(2)	32,572,586			26,371,727			21,393,996
Book capitalization	$	44,469,423		$	40,110,870		$	35,333,256
Net debt to book capitalization ratio	26.8		%	34.3		%	39.5		%

Undepreciated book capitalization:
Total net debt	$	11,896,837		$	13,739,143		$	13,939,260
Accumulated depreciation and amortization	10,626,263			9,274,814			8,075,733
Total equity and noncontrolling interests(2)	32,572,586			26,371,727			21,393,996
Undepreciated book capitalization	$	55,095,686		$	49,385,684		$	43,408,989
Net debt to undepreciated book capitalization ratio	21.6		%	27.8		%	32.1		%

Enterprise value:
Common shares outstanding	635,289			564,241			490,509
Period end share price	$	126.03		$	90.17		$	65.55
Common equity market capitalization	$	80,065,473		$	50,877,611		$	32,152,865
Total net debt	11,896,837			13,739,143			13,939,260
Noncontrolling interests(2)	616,378			967,351			1,099,182
Consolidated enterprise value	$	92,578,688		$	65,584,105		$	47,191,307
Net debt to consolidated enterprise value ratio	12.9		%	20.9		%	29.5		%

(1) Amounts include senior unsecured notes, secured debt and lease liabilities related to finance leases, as reflected on our Consolidated Balance Sheets. Operating lease liabilities related to ASC 842 are excluded.

(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests as reflected on our Consolidated Balance Sheets.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions. Management considers an accounting estimate or assumption critical if:

the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and
the impact of the estimates and assumptions on financial condition or operating performance is material.

Management has discussed the development and selection of its critical accounting policies and estimates with the Audit Committee of the Board of Directors. Management believes the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change in the future. However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change. If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition. Please refer to Note 2 to our consolidated financial statements for further information on significant accounting policies that impact us and for the impact of new accounting standards, including accounting pronouncements that were issued but not yet adopted by us.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table presents information about our critical accounting policies and estimates:


Nature of Critical Accounting Estimate			Assumptions/Approach Used
Impairment of Real Property Owned and Investments in Unconsolidated Entities Assessing impairment of real property owned and investments in unconsolidated entities involves subjectivity in determining if indicators of impairment are present and in estimating the future undiscounted cash flows or estimated fair value of an asset. The evaluation of indicators of impairment is dependent on a number of factors, including when there is an unfavorable change in the operating performance of the property, a change in management's intent to hold and operate the property or a change in the property's use. If an indicator of impairment of the property is identified, management estimates whether the carrying value is recoverable using observable and unobservable inputs such as historical and forecasted cash flows and estimated capitalization rates, all of which are affected by our expectations of future market or economic conditions. These inputs can have a significant impact on the undiscounted cash flows. The evaluation of indicators of impairment of investments in unconsolidated entities is dependent on a number of factors including the performance of each investment, a change in market conditions or a change in management's investment strategy. When required, we estimate the fair value of an investment and, if such fair value is lower than carrying value, assess whether any impairment is other-than-temporary using observable and unobservable inputs such as historical and forecasted cash flows and estimated capitalization rates. These inputs can have a significant impact on the calculation of the fair value of the investment.			Quarterly, we review our real property owned on a property by property basis to determine if facts and circumstances suggest the property may be impaired. These indicators may include expected operational performance, the tenant's ability to make rent payments, a change in management's intent to hold and operate the property and changes in the market that may permanently reduce the value of the property. If indicators of impairment exist, an undiscounted cash flow analysis will be prepared to determine if the value of the property will be recoverable. If the estimated undiscounted cash flows indicate that the carrying value of the property will not be recoverable, the carrying value of the property is reduced to its estimated fair value and an impairment charge is recognized for the difference between the carrying value and the fair value. The analysis requires us to use judgment in determining whether indicators of impairment exist and to estimate the expected future undiscounted cash flows or estimated fair values of the property. Properties that meet the held for sale criteria are recorded at the lesser of the fair value less costs to sell or carrying value. We also evaluate investments in unconsolidated entities for indicators of impairment and, when present, record impairment charges based on a comparison of the estimated fair value of the equity method investment to its carrying value if the decline in the estimated fair value of such an investment below its carrying value is other-than-temporary. At December 31, 2024, our net real property owned was approximately $40,673,242,000 and investments in unconsolidated entities totaled $1,768,772,000. During the year ended December 31, 2024, we recorded impairment charges of $92,793,000 related to 18 Seniors Housing Operating properties, three Triple-net properties and one Outpatient Medical property. No impairment losses related to investments in unconsolidated entities were recorded during the year ended December 31, 2024.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations


Nature of Critical Accounting Estimate			Assumptions/Approach Used
Real Estate Acquisitions Most of our real estate acquisitions are considered asset acquisitions for which we record the related real estate acquired (tangible assets and identifiable intangible assets and liabilities) at cost on a relative fair value basis. Liabilities assumed and any associated noncontrolling interests are reflected at fair value. Tangible assets consist primarily of land, building and improvements. Identifiable intangible assets and liabilities primarily consist of the above or below market component of in-place leases and the value of in-place leases. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values based on management's evaluation of the specific characteristics of each tenant's lease and our overall relationship with respect to that tenant. For real estate acquisitions accounted for as business combinations, we allocate the acquisition consideration to the assets acquired, liabilities assumed and noncontrolling interests at fair value as of the acquisition date. Any excess of the consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill.			In determining the fair values that drive the recorded tangible assets and identifiable intangible assets and liabilities, we estimate the fair value of each component of the real estate acquired, which generally includes land, buildings and improvements, the above or below market component of in-place leases and the value of in-place leases using a number of sources including independent appraisals, our own analysis of recently acquired or developed and existing comparable properties in our portfolio and other market data. Significant assumptions used to determine such fair values include comparable land sales, capitalization rates, discount rates, market rental rates and property operating data, all of which can be impacted by expectations about future market or economic conditions. Our estimates of the values of these components affect the amount of depreciation and amortization we record over the estimated useful life of the property or the term of the lease and the amount of goodwill recognized in an acquisition accounted for as a business combination. During the year ended December 31, 2024, we disbursed $3,525,449,000 of cash related to real estate asset acquisitions and business combinations.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations


Nature of Critical Accounting Estimate	Assumptions/Approach Used
Principles of Consolidation The consolidated financial statements include our accounts, the accounts of our wholly owned subsidiaries and the accounts of joint venture entities in which we own a majority voting interest with the ability to control operations and where no substantive participating rights or substantive kick out rights have been granted to the noncontrolling interests. In addition, we consolidate those entities deemed to be variable interest entities (“VIEs”) in which we are determined to be the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation.		We make judgments about which entities are VIEs based on an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We make judgments with respect to our level of influence or control of an entity and whether we are (or are not) the primary beneficiary of a VIE. Consideration of various factors include, but is not limited to, our ability to direct the activities that most significantly impact the entity's economic performance, our form of ownership interest, our representation on the entity's governing body, the size and seniority of our investment, our ability and the rights of other investors to participate in policy making decisions, replace the manager and/or liquidate the entity, if applicable. Our ability to correctly assess our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. If we perform a primary beneficiary analysis at a date other than at inception of the VIE, our assumptions may be different and may result in the identification of a different primary beneficiary.
Allowance for Credit Losses on Loans Receivable The allowance for credit losses is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the credit allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments.		We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors, and nature, extent and value of the underlying collateral. A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement. For those loans we identified as having deteriorated credit quality, we determine the amount of credit loss on an individual basis. Placement on non-accrual status may be required. Consistent with this definition, all loans on non-accrual are deemed to have deteriorated credit quality. To the extent circumstances improve and the risk of collectability is diminished, we may return these loans to income accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance. For the remaining loans, we assess credit loss on a collective pool basis and use our historical loss experience for similar loans to determine the reserve for credit losses. During the year ended December 31, 2024, we recognized provision for loan losses of $10,125,000, which includes changes in the reserve based on our historical loss experience.

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