Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

						Three Months Ended												Change
						March 31,
						2024						2023						Amount						%
Net income (loss)						$	131,634					$	28,635					$	102,999					360		%
NICS						127,146						25,673						101,473						395		%
FFO						556,703						386,062						170,641						44		%
EBITDA						651,006						515,195						135,811						26		%
NOI						762,828						602,976						159,852						27		%
SSNOI						537,581						477,990						59,591						12		%
Per share data (fully diluted):
NICS						$	0.22					$	0.05					$	0.17					340		%
FFO						$	0.96					$	0.78					$	0.18					23		%
Interest coverage ratio						4.29		x				3.44		x				0.85		x				25		%
Fixed charge coverage ratio						3.98		x				3.13		x				0.85		x				27		%

Seniors Housing Operating

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

						Three Months Ended												Change
						March 31,
						2024						2023						$						%
Revenues:
Resident fees and services						$	1,360,274					$	1,131,685					$	228,589					20		%
Interest income						5,023						2,551						2,472						97		%
Other income						1,463						2,445						(982)						(40)		%
Total revenues						1,366,760						1,136,681						230,079						20		%
Property operating expenses						1,019,347						883,784						135,563						15		%
NOI (1)						347,413						252,897						94,516						37		%
Other expenses:
Depreciation and amortization						236,796						220,407						16,389						7		%
Interest expense						11,186						11,487						(301)						(3)		%
Loss (gain) on extinguishment of debt, net						6						—						6						n/a
Provision for loan losses, net						1,568						(73)						1,641						n/a
Impairment of assets						43,331						12,629						30,702						243		%
Other expenses						8,757						17,579						(8,822)						(50)		%
						301,644						262,029						39,615						15		%
Income (loss) from continuing operations before income taxes and other items						45,769						(9,132)						54,901						601		%
Income (loss) from unconsolidated entities						(4,267)						(15,589)						11,322						73		%
Gain (loss) on real estate dispositions, net						4,602						833						3,769						452		%
Income (loss) from continuing operations						46,104						(23,888)						69,992						293		%
Net income (loss)						46,104						(23,888)						69,992						293		%
Less: Net income (loss) attributable to noncontrolling interests						(1,002)						(3,121)						2,119						68		%
Net income (loss) attributable to common stockholders						$	47,106					$	(20,767)					$	67,873					327		%
(1) See "Non-GAAP Financial Measures" below for additional information and reconciliations.

Resident fees and services and property operating expenses increased for the three month periods ended March 31, 2024 compared to the same periods in the prior year primarily due to acquisitions outpacing dispositions during 2023 and year to date 2024. Additionally, our Seniors Housing Operating revenues are dependent on occupancy and rate growth, both of which have continued to steadily increase from prior year. Average occupancy is as follows:

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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

(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.

Interest income increased for the three month period ended March 31, 2024 compared to the same period in the prior year primarily due to an increase in third party real estate loans in connection with the various transactions that occurred during 2023 and year to date 2024.

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

						QTD Pool
						Three Months Ended												Change
						March 31,
						2024						2023						$						%
SSNOI (1)						$	265,160					$	213,116					$	52,044					24.4		%

(1) For the QTD Pool, amounts relate to 665 same store properties. Please see "Non-GAAP Financial Measures" below for additional information and reconciliations.

During the three months ended March 31, 2024, we entered into a definitive agreement and subsequently closed on the sale of four Seniors Housing Operating properties. In conjunction with this transaction, an impairment charge of $23,795,000 was recognized related to two properties. Additionally, we recorded $15,584,000 of impairment charges related to six Seniors Housing Operating properties classified as held for sale and not yet sold as of March 31, 2024 for which the carrying value exceeded the estimated fair value less costs to sell. Also, we recorded $3,952,000 related to two held for use properties for which the carrying value exceeded the estimated fair value.

During the three months ended March 31, 2023, we recorded impairment charges of $12,252,000 related to three held for sale properties for which the carrying values exceeded the estimated fair value less costs to sell and $377,000 related to one held for use property for which the carrying value exceeded the estimated fair value. 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.

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

During the three months ended March 31, 2024, we completed construction conversions representing $88,680,000 or $169,885 per unit. The following is a summary of our consolidated Seniors Housing Operating construction projects in process, excluding expansions (dollars in thousands):

As of March 31, 2024
Expected Conversion Year(1)						Properties						Units/Beds						Anticipated Remaining Funding						Construction in Progress Balance
2024						18						2,692						$	155,181					$	716,887
2025						7						1,465						241,531						258,809
2026						3						539						104,832						28,440
TBD(2)						5																		65,452
Total						33																		$	1,069,588
(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 foreign currency 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.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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

						Three Months Ended
						March 31,
						2024						2023
Beginning balance						$	1,955,048					$	1,701,939
Debt issued						1,379						362,900
Debt assumed						—						6,482
Debt extinguished						(120,946)						—
Principal payments						(10,847)						(13,007)
Foreign currency						(20,215)						304
Ending balance						$	1,804,419					$	2,058,618
Ending weighted average interest						4.52		%				4.58		%

The majority of our Seniors Housing Operating properties are formed through partnership interests. Income (loss) from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. The fluctuation in income (loss) from unconsolidated entities from the prior year relates to the U.S. portion of the Strategic Dissolution of the Revera Joint Venture discussed in Note 5 to our unaudited consolidated financial statements, which occurred in the third quarter of 2023. Net income attributable to noncontrolling interests represents our partners’ share of net income (loss) related to joint ventures.

Triple-net

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

						Three Months Ended												Change
						March 31,
						2024						2023						$						%
Revenues:
Rental income						$	221,744					$	202,419					$	19,325					10		%
Interest income						46,789						33,763						13,026						39		%
Other income						1,199						1,883						(684)						(36)		%
Total revenues						269,732						238,065						31,667						13		%
Property operating expenses						10,817						11,723						(906)						(8)		%
NOI (1)						258,915						226,342						32,573						14		%
Other expenses:
Depreciation and amortization						62,535						54,528						8,007						15		%
Interest expense						358						(15)						373						n/a
Loss (gain) on derivatives and financial instruments, net						(3,054)						930						(3,984)						(428)		%
Provision for loan losses, net						(567)						850						(1,417)						(167)		%
Other expenses						1,205						2,467						(1,262)						(51)		%
						60,477						58,760						1,717						3		%
Income (loss) from continuing operations before income taxes and other items						198,438						167,582						30,856						18		%
Income (loss) from unconsolidated entities						(3,153)						8,432						(11,585)						(137)		%
Gain (loss) on real estate dispositions, net						26						520						(494)						(95)		%
Income (loss) from continuing operations						195,311						176,534						18,777						11		%
Net income (loss)						195,311						176,534						18,777						11		%
Less: Net income (loss) attributable to noncontrolling interests						5,498						5,464						34						1		%
Net income attributable to common stockholders						$	189,813					$	171,070					$	18,743					11		%
(1) See "Non-GAAP Financial Measures" below for additional information and reconciliations.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Rental income increased primarily due to acquisitions and annual rent increases. 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 three months ended March 31, 2024, we had 20 leases with rental rate increases ranging from 0.05% to 10.00% in our Triple-net portfolio.

This increase was partially offset by the write off of straight-line receivable balances of $9,356,000 during the three months ended March 31, 2024, which relate to leases for which the collection of substantially all contractual lease payments was no longer deemed probable.

The increase in interest income is primarily driven by increased advances on loans receivable during 2023.

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

						QTD Pool
						Three Months Ended												Change
						March 31,
						2024						2023						$						%
SSNOI (1)						$	153,048					$	147,817					$	5,231					3.5		%

(1) For the QTD Pool, amounts relate to 527 same store properties. Please see "Non-GAAP Financial Measures" below for additional information and reconciliations.

Depreciation and amortization fluctuates 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.

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.

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 transactions that closed in 2021 and 2023.

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 foreign currency 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):

						Three Months Ended
						March 31,
						2024						2023
Beginning balance						$	38,260					$	39,179
Principal payments						(237)						(230)
Ending balance						$	38,023					$	38,949
Ending weighted average interest						4.39		%				4.39		%

A portion of our Triple-net properties were formed through partnerships. Income (loss) from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. The fluctuation in income (loss) from unconsolidated entities from the prior year relates primarily to the timing and amount of hypothetical liquidation at book value adjustments related to in substance real estate investments. Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.

Item 2. 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):

						Three Months Ended												Change
						March 31,
						2024						2023						$						%
Revenues:
Rental income						$	195,908					$	181,640					$	14,268					8		%
Interest income						852						91						761						836		%
Other income						2,402						3,100						(698)						(23)		%
Total revenues						199,162						184,831						14,331						8		%
Property operating expenses						62,463						58,365						4,098						7		%
NOI (1)						136,699						126,466						10,233						8		%
Other expenses:
Depreciation and amortization						66,532						64,177						2,355						4		%
Interest expense						1,718						4,104						(2,386)						(58)		%
Loss (gain) on extinguishment of debt, net						—						5						(5)						(100)		%
Provision for loan losses, net						13						—						13						n/a
Other expenses						609						547						62						11		%
						68,872						68,833						39						—		%
Income (loss) from continuing operations before income taxes and other items						67,827						57,633						10,194						18		%
Income (loss) from unconsolidated entities						(363)						86						(449)						(522)		%
Gain (loss) on real estate dispositions, net						79						(606)						685						113		%
Income (loss) from continuing operations						67,543						57,113						10,430						18		%
Net income (loss)						67,543						57,113						10,430						18		%
Less: Net income (loss) attributable to noncontrolling interests						(352)						536						(888)						(166)		%
Net income (loss) attributable to common stockholders						$	67,895					$	56,577					$	11,318					20		%
(1) See "Non-GAAP Financial Measures" below for additional information and reconciliations.

Rental income has increased due primarily to acquisitions and construction conversions that occurred during 2023 and year to date in 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 three months ended March 31, 2024, our consolidated Outpatient Medical portfolio signed 100,966 square feet of new leases and 464,987 square feet of renewals. The weighted-average term of these leases was seven years, with a rate of $40.50 per square foot and tenant improvement and lease commission costs of $33.26 per square foot. Substantially all of these leases contain an annual fixed or contingent escalation rent structure ranging from 2.5% to 5.0%.

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

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

						QTD Pool
						Three Months Ended												Change
						March 31,
						2024						2023						$						%
SSNOI (1)						$	119,373					$	117,057					$	2,316					2.0		%

(1) For the QTD Pool, amounts relate to 378 same store properties. Please see "Non-GAAP Financial Measures" below for additional information and reconciliations.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

During the three months ended March 31, 2024, we completed construction conversions representing $91,248,000 or $661 per square foot. The following is a summary of our consolidated Outpatient Medical construction projects in process, excluding expansions (dollars in thousands):

As of March 31, 2024
Expected Conversion Year						Properties						Square Feet						Anticipated Remaining Funding						Construction in Progress Balance
2024						9						660,307						$	211,768					$	152,053
2025						3						290,559						146,138						19,103
TBD(1)						1																		33,571
Total						13																		$	204,727
(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, extinguishments and principal amortizations. The following is a summary of our Outpatient Medical secured debt principal activity (dollars in thousands):

						Three Months Ended
						March 31,
						2024						2023
Beginning balance						$	229,137					$	388,836
Debt assumed						—						46,741
Debt extinguished						—						(24,631)
Principal payments						(803)						(1,705)
Ending balance						$	228,334					$	409,241
Ending weighted average interest						5.42		%				4.43		%

A portion of our Outpatient Medical properties 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. 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):

						Three Months Ended												Change
						March 31,
						2024						2023						$						%
Revenues:
Other income						$	24,087					$	1,152					$	22,935					n/a
Total revenues						24,087						1,152						22,935						n/a
Property operating expenses						4,286						3,881						405						10		%
Consolidated net operating income (loss) (1)						19,801						(2,729)						22,530						826		%
Expenses:
Interest expense						134,056						128,827						5,229						4		%
General and administrative expenses						53,318						44,371						8,947						20		%
Other expenses						3,560						2,152						1,408						65		%
						190,934						175,350						15,584						9		%
Income (loss) from continuing operations before income taxes and other items						(171,133)						(178,079)						6,946						4		%
Income tax benefit (expense)						(6,191)						(3,045)						(3,146)						(103)		%
Income (loss) from continuing operations						(177,324)						(181,124)						3,800						2		%
Net income (loss)						(177,324)						(181,124)						3,800						2		%
Less: Net income (loss) attributable to noncontrolling interests						344						83						261						314		%
Net income (loss) attributable to common stockholders						$	(177,668)					$	(181,207)					$	3,539					2		%
(1) See "Non-GAAP Financial Measures" below for additional information and reconciliations.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The increase in other income for three month periods ended March 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):

						Three Months Ended												Change
						March 31,
						2024						2023						$						%
Senior unsecured notes						$	127,960					$	120,814					$	7,146					6		%
Unsecured credit facility and commercial paper program						1,535						2,406						(871)						(36)		%
Loan expense						4,561						5,607						(1,046)						(19)		%
Totals						$	134,056					$	128,827					$	5,229					4		%

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 our unaudited 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 to our unaudited 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 three months ended March 31, 2024 and 2023 were 2.87% and 2.84%, respectively. The increase during the three month period is primarily driven by compensation costs associated with increased employee headcount. 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.

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 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 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 after acquisition or being placed into service for the QTD Pool. Land parcels, loans and sub-leases, 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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from SSNOI until five full quarters post completion of the redevelopment for the QTD Pool. Properties undergoing operator transitions and/or segment transitions are also excluded from SSNOI until five full quarters post completion of the transition for the QTD Pool. In addition, properties significantly impacted by force majeure, acts of God, or other extraordinary adverse events are excluded from SSNOI until five full quarters after the properties are placed back into service for the QTD Pool. 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/loss/impairments on properties, 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, these measures are utilized by the Board of Directors to evaluate management. 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.

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.

																		Three Months Ended
																		March 31,						December 31,						September 30,						June 30,						March 31,
FFO Reconciliation:																		2024						2023						2023						2023						2023
Net income (loss) attributable to common stockholders																		$	127,146					$	83,911					$	127,470					$	103,040					$	25,673
Depreciation and amortization																		365,863						380,730						339,314						341,945						339,112
Impairment of assets																		43,331						14,994						7,388						1,086						12,629
Loss (gain) on real estate dispositions, net																		(4,707)						1,783						(71,102)						2,168						(747)
Noncontrolling interests																		(11,996)						(11,436)						(8,789)						(12,841)						(13,327)
Unconsolidated entities																		37,066						21,877						24,843						30,784						22,722
FFO																		$	556,703					$	491,859					$	419,124					$	466,182					$	386,062
Average diluted shares outstanding																		577,530						552,380						525,138						501,970						494,494
Per diluted share data:
Net income attributable to common stockholders(1)																		$	0.22					$	0.15					$	0.24					$	0.20					$	0.05
FFO																		$	0.96					$	0.89					$	0.80					$	0.93					$	0.78
(1) Includes adjustment to the numerator for income (loss) attributable to OP Unitholders.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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

															Three Months Ended
																		March 31,						December 31,						September 30,						June 30,						March 31,
NOI Reconciliations:																		2024						2023						2023						2023						2023
Net income (loss)																		$	131,634					$	88,440					$	134,722					$	106,342					$	28,635
Loss (gain) on real estate dispositions, net																		(4,707)						1,783						(71,102)						2,168						(747)
Loss (income) from unconsolidated entities																		7,783						2,008						4,031						40,332						7,071
Income tax expense (benefit)																		6,191						(4,768)						4,584						3,503						3,045
Other expenses																		14,131						36,307						38,220						11,069						22,745
Impairment of assets																		43,331						14,994						7,388						1,086						12,629
Provision for loan losses, net																		1,014						2,517						4,059						2,456						777
Loss (gain) on extinguishment of debt, net																		6						—						1						1						5
Loss (gain) on derivatives and financial instruments, net																		(3,054)						(7,215)						2,885						1,280						930
General and administrative expenses																		53,318						44,327						46,106						44,287						44,371
Depreciation and amortization																		365,863						380,730						339,314						341,945						339,112
Interest expense																		147,318						154,574						156,532						152,337						144,403
Consolidated net operating income (NOI)																		$	762,828					$	713,697					$	666,740					$	706,806					$	602,976
NOI by segment:
Seniors Housing Operating																		$	347,413					$	301,077					$	284,909					$	279,252					$	252,897
Triple-net																		258,915						256,985						226,278						291,530						226,342
Outpatient Medical																		136,699						135,484						129,754						127,495						126,466
Non-segment/corporate																		19,801						20,151						25,799						8,529						(2,729)
Total NOI																		$	762,828					$	713,697					$	666,740					$	706,806					$	602,976

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

						QTD Pool
SSNOI Property Reconciliations:						Seniors Housing Operating						Triple-net						Outpatient Medical						Total
Consolidated properties						918						613						372						1,903
Unconsolidated properties						76						39						78						193
Total properties						994						652						450						2,096
Recent acquisitions/development conversions(1)						(69)						(69)						(40)						(178)
Under development						(34)						—						(13)						(47)
Under redevelopment(2)						(5)						(4)						(2)						(11)
Current held for sale						(37)						(29)						(6)						(72)
Land parcels, loans and subleases						(15)						(4)						(8)						(27)
Transitions(3)						(159)						(15)						—						(174)
Other(4)						(10)						(4)						(3)						(17)
Same store properties						665						527						378						1,570
(1) Acquisitions and development conversions will enter the QTD Pool five full quarters after acquisition or certificate of occupancy.
(2) Redevelopment properties will enter the QTD Pool after five full quarters of operations post redevelopment completion.
(3) Transitioned properties will enter the QTD Pool after five 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 2. 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 QTD Pool (dollars in thousands):

						Three Months Ended
						March 31,
SSNOI Reconciliations:						2024						2023
Seniors Housing Operating:
Consolidated NOI						$	347,413					$	252,897
NOI attributable to unconsolidated investments						21,782						12,126
NOI attributable to noncontrolling interests						(17,359)						(16,260)
NOI attributable to non-same store properties						(86,107)						(35,153)
Non-cash NOI attributable to same store properties						(195)						(851)
Currency and ownership adjustments (1)						(374)						357
SSNOI at Welltower Share						265,160						213,116
Triple-net:
Consolidated NOI						258,915						226,342
NOI attributable to unconsolidated investments						5,597						9,293
NOI attributable to noncontrolling interests						(8,006)						(7,608)
NOI attributable to non-same store properties						(95,017)						(57,928)
Non-cash NOI attributable to same store properties						(8,082)						(22,709)
Currency and ownership adjustments (1)						(359)						427
SSNOI at Welltower Share						153,048						147,817
Outpatient Medical:
Consolidated NOI						136,699						126,466
NOI attributable to unconsolidated investments						4,711						4,935
NOI attributable to noncontrolling interests						(2,723)						(5,188)
NOI attributable to non-same store properties						(16,081)						(6,984)
Non-cash NOI attributable to same store properties						(3,253)						(5,167)
Currency and ownership adjustments (1)						20						2,995
SSNOI at Welltower Share						119,373						117,057
SSNOI at Welltower Share:
Seniors Housing Operating						265,160						213,116
Triple-net						153,048						147,817
Outpatient Medical						119,373						117,057
Total						$	537,581					$	477,990
(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 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The table below reflects the reconciliation of EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented (dollars in thousands):

																		Three Months Ended
																		March 31,						December 31,						September 30,						June 30,						March 31,
EBITDA Reconciliations:																		2024						2023						2023						2023						2023
Net income (loss)																		$	131,634					$	88,440					$	134,722					$	106,342					$	28,635
Interest expense																		147,318						154,574						156,532						152,337						144,403
Income tax expense (benefit)																		6,191						(4,768)						4,584						3,503						3,045
Depreciation and amortization																		365,863						380,730						339,314						341,945						339,112
EBITDA																		$	651,006					$	618,976					$	635,152					$	604,127					$	515,195
Interest Coverage Ratio:
Interest expense																		$	147,318					$	154,574					$	156,532					$	152,337					$	144,403
Capitalized interest																		13,809						14,547						13,947						11,870						10,335
Non-cash interest expense																		(9,284)						(5,871)						(6,716)						(5,824)						(5,083)
Total interest																		151,843						163,250						163,763						158,383						149,655
EBITDA																		$	651,006					$	618,976					$	635,152					$	604,127					$	515,195
Interest coverage ratio																		4.29		x				3.79		x				3.88		x				3.81		x				3.44		x
Fixed Charge Coverage Ratio:
Total interest																		$	151,843					$	163,250					$	163,763					$	158,383					$	149,655
Secured debt principal payments																		11,887						12,430						12,865						13,839						14,942
Total fixed charges																		163,730						175,680						176,628						172,222						164,597
EBITDA																		$	651,006					$	618,976					$	635,152					$	604,127					$	515,195
Fixed charge coverage ratio																		3.98		x				3.52		x				3.60		x				3.51		x				3.13		x

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The table below reflects the reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented (dollars in thousands):

																		Twelve Months Ended
																		March 31,						December 31,						September 30,						June 30,						March 31,
Adjusted EBITDA Reconciliations:																		2024						2023						2023						2023						2023
Net income																		$	461,138					$	358,139					$	271,497					$	134,122					$	123,452
Interest expense																		610,761						607,846						593,663						576,813						552,226
Income tax expense (benefit)																		9,510						6,364						7,044						5,717						5,279
Depreciation and amortization																		1,427,852						1,401,101						1,362,657						1,377,042						1,345,392
EBITDA																		2,509,261						2,373,450						2,234,861						2,093,694						2,026,349
Loss (income) from unconsolidated entities																		54,154						53,442						56,084						58,751						25,477
Stock-based compensation expense																		38,829						36,611						34,762						32,299						27,709
Loss (gain) on extinguishment of debt, net																		8						7						94						95						697
Loss (gain) on real estate dispositions, net																		(71,858)						(67,898)						(65,258)						4,780						6,144
Impairment of assets																		66,799						36,097						34,249						31,217						30,131
Provision for loan losses, net																		10,046						9,809						17,761						14,192						11,098
Loss (gain) on derivatives and financial instruments, net																		(6,104)						(2,120)						5,353						9,373						5,751
Other expenses																		99,727						108,341						96,988						74,249						98,346
Lease termination and leasehold interest adjustment (1)																		(65,485)						(65,485)						(65,485)						(65,485)						(56,397)
Casualty losses, net of recoveries																		7,778						10,107						16,446						15,760						14,865
Other impairment (2)																		25,998						16,642						12,309						—						(620)
Adjusted EBITDA																		$	2,669,153					$	2,509,003					$	2,378,164					$	2,268,925					$	2,189,550
Adjusted Interest Coverage Ratio:
Interest expense																		$	610,761					$	607,846					$	593,663					$	576,813					$	552,226
Capitalized interest																		54,173						50,699						45,914						40,830						35,347
Non-cash interest expense																		(27,695)						(23,494)						(21,903)						(21,946)						(22,728)
Total interest																		637,239						635,051						617,674						595,697						564,845
Adjusted EBITDA																		$	2,669,153					$	2,509,003					$	2,378,164					$	2,268,925					$	2,189,550
Adjusted interest coverage ratio																		4.19		x				3.95		x				3.85		x				3.81		x				3.88		x
Adjusted Fixed Charge Coverage Ratio:
Total interest																		$	637,239					$	635,051					$	617,674					$	595,697					$	564,845
Secured debt principal payments																		51,021						54,076						55,635						56,545						57,088
Total fixed charges																		688,260						689,127						673,309						652,242						621,933
Adjusted EBITDA																		$	2,669,153					$	2,509,003					$	2,378,164					$	2,268,925					$	2,189,550
Adjusted fixed charge coverage ratio																		3.88		x				3.64		x				3.53		x				3.48		x				3.52		x
(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 receivable balances relating to leases placed on cash recognition.

Item 2. 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.

																		As of
																		March 31,						December 31,						September 30,						June 30,						March 31,
																		2024						2023						2023						2023						2023
Book capitalization:
Unsecured credit facility and commercial paper																		$	—					$	—					$	—					$	—					$	—
Long-term debt obligations (1)																		14,285,686						15,815,226						15,899,420						16,040,530						15,074,320
Cash and cash equivalents and restricted cash																		(2,478,335)						(2,076,083)						(2,686,711)						(2,299,069)						(638,796)
Total net debt																		11,807,351						13,739,143						13,212,709						13,741,461						14,435,524
Total equity and noncontrolling interests(2)																		28,547,908						26,371,727						23,818,619						22,193,114						21,596,155
Book capitalization																		$	40,355,259					$	40,110,870					$	37,031,328					$	35,934,575					$	36,031,679
Net debt to book capitalization ratio																		29%						34%						36%						38%						40%
Undepreciated book capitalization:
Total net debt																		$	11,807,351					$	13,739,143					$	13,212,709					$	13,741,461					$	14,435,524
Accumulated depreciation and amortization																		9,537,562						9,274,814						8,868,627						8,599,622						8,417,151
Total equity and noncontrolling interests(2)																		28,547,908						26,371,727						23,818,619						22,193,114						21,596,155
Undepreciated book capitalization																		$	49,892,821					$	49,385,684					$	45,899,955					$	44,534,197					$	44,448,830
Net debt to undepreciated book capitalization ratio																		24%						28%						29%						31%						32%
Enterprise value:
Common shares outstanding																		590,934						564,241						532,268						508,159						496,295
Period end share price																		$	93.44					$	90.17					$	81.92					$	80.89					$	71.69
Common equity market capitalization																		$	55,216,873					$	50,877,611					$	43,603,395					$	41,104,982					$	35,579,389
Total net debt																		11,807,351						13,739,143						13,212,709						13,741,461						14,435,524
Noncontrolling interests(2)																		999,965						967,351						864,583						988,673						1,148,000
Consolidated enterprise value																		$	68,024,189					$	65,584,105					$	57,680,687					$	55,835,116					$	51,162,913
Net debt to consolidated enterprise value ratio																		17%						21%						23%						25%						28%
(1) Amounts include senior unsecured notes, secured debt and lease liabilities related to financing leases, as reflected on our Consolidated Balance Sheets. Operating lease liabilities related to the ASC 842 adoption 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 unaudited 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 unaudited 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 unaudited 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 financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for further information on significant accounting policies that impact us. There have been no material changes to these policies in 2024.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “pro forma,” “estimate” or similar expressions that do not relate solely to historical matters, Welltower is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower’s actual results to differ materially from Welltower’s expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; Welltower’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters, health emergencies (such as the COVID-19 pandemic) and other acts of God affecting Welltower’s properties; Welltower’s ability to re-lease space at similar rates as vacancies occur; Welltower’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower’s properties; changes in rules or practices governing Welltower’s financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower’s ability to maintain its qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower’s reports filed from time to time with the SEC. Other important factors are identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, including factors identified under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Finally, Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We seek to mitigate the underlying foreign currency exposures with gains and losses on derivative contracts hedging these exposures. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to match our variable rate investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. This section is presented to provide a discussion of the risks associated with potential fluctuations in interest rates and foreign currency exchange rates. For more information, see Notes 12 and 17 to our consolidated financial statements.

We historically borrow on our unsecured revolving credit facility and commercial paper program to acquire, construct or make loans relating to health care and seniors housing properties. Then, as market conditions dictate, we will issue equity or long-term fixed rate debt to repay the borrowings under our unsecured revolving credit facility and commercial paper program. We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these limitations, our ability to acquire additional properties may be limited.

A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate debt instruments after considering the effects of interest rate swaps, whereby we modeled the change in net present values arising from a hypothetical 1% increase in interest rates to determine the instruments’ change in fair value. The following table summarizes the analysis performed as of the dates indicated (in thousands):