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

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

Results of Operations

Summary

Our primary sources of revenue include resident fees and services, rent, interest income and interest earned on short-term deposits. Our primary expenses include property operating expenses, depreciation and amortization, interest expense, general and administrative expenses and other expenses. We evaluate our business and make resource allocations on our three business segments: Seniors Housing Operating, Triple-net and Outpatient Medical. The primary performance measures for our properties are NOI and same store NOI ("SSNOI") and other supplemental measures include FFO and EBITDA, which are further discussed below. Please see Non-GAAP Financial Measures for additional information and reconciliations related to these supplemental measures.


	Three Months Ended						Change
	March 31,
	2025			2024			Amount			%
Net income (loss)	$	257,266		$	131,634		$	125,632		95	%
NICS	257,957			127,146			130,811			103	%
FFO	765,197			556,703			208,494			37	%
EBITDA	882,578			651,006			231,572			36	%
NOI	960,697			762,828			197,869			26	%
SSNOI	650,832			576,049			74,783			13	%

Per share data (fully diluted):
NICS	$	0.40		$	0.22		$	0.18		82	%
FFO	$	1.17		$	0.96		$	0.21		22	%

Interest coverage ratio	6.14		x	4.29		x	1.85		x	43	%
Fixed charge coverage ratio	5.58		x	3.98		x	1.60		x	40	%

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,
	2025		2024		$		%
Revenues:
Resident fees and services	$	1,864,530	$	1,360,274	$	504,256	37	%

Other income	3,341		1,463		1,878		128	%
Total revenues	1,867,871		1,361,737		506,134		37	%
Property operating expenses	1,384,684		1,019,347		365,337		36	%
NOI (1)	483,187		342,390		140,797		41	%
Other expenses:
Depreciation and amortization	340,756		236,796		103,960		44	%
Interest expense	16,269		11,186		5,083		45	%
Loss (gain) on extinguishment of debt, net	6,156		6		6,150		n/a

Impairment of assets	23,601		43,331		(19,730)		(46)	%
Other expenses	12,167		8,757		3,410		39	%
	398,949		300,076		98,873		33	%

Income (loss) from continuing operations before income taxes and other items	84,238		42,314		41,924		99	%
Income (loss) from unconsolidated entities	(1,982)		(4,582)		2,600		57	%
Gain (loss) on real estate dispositions and acquisitions of controlling interests, net	53,282		4,602		48,680		n/a
Income (loss) from continuing operations	135,538		42,334		93,204		220	%
Net income (loss)	135,538		42,334		93,204		220	%
Less: Net income (loss) attributable to noncontrolling interests	87		(1,016)		1,103		109	%
Net income (loss) attributable to common stockholders	$	135,451	$	43,350	$	92,101	212	%

(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

Resident fees and services and property operating expenses increased for the three month periods ended March 31, 2025 compared to the same period in the prior year primarily due to acquisitions including the acquisition of Care UK as described in Note 3 to our consolidated financial statements, construction conversions outpacing dispositions and the conversions of Triple-net properties to Seniors Housing Operating RIDEA structures throughout 2024. Additionally, our Seniors Housing Operating revenues are dependent on occupancy and rate growth, both of which have continued to steadily increase from the prior year. Average occupancy is as follows:


	Three Months Ended(1)
	March 31,		June 30,		September 30,		December 31,
2024	82.5	%	82.8	%	83.8	%	84.8	%
2025	85.1	%

(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
	Three Months Ended				Change
	March 31,
	2025		2024		$		%
SSNOI (1)	$	364,858	$	298,617	$	66,241	22.2	%

(1) For the QTD Pool, amounts relate to 725 same store properties. Please see "Non-GAAP Financial Measures" below for additional information and reconciliations.

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

During the three months ended March 31, 2025, we recorded $23,601,000 of impairment charges related to six properties. During the three months ended March 31, 2024, we recorded impairment charges of $43,331,000 related to ten 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 unaudited consolidated financial statements.

During the three months ended March 31, 2025, we completed construction conversions representing $132,210,000 or $451,229 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, 2025
Expected Conversion Year(1)	Properties	Units/Beds	Anticipated Remaining Funding		Construction in Progress Balance
2025	15	2,636	$	127,293	$	644,560
2026	9	1,320	228,401		120,727
2027	1	225	49,785		9,548

TBD(2)	3				46,665
Total	28				$	821,500

(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,
	2025			2024
Beginning balance	$	2,042,583		$	1,955,048

Debt issued	—			1,379
Debt assumed	316,869			—
Debt extinguished	(96,037)			(120,946)


Principal payments	(12,107)			(10,847)
Effect of foreign currency	2,355			(20,215)
Ending balance	$	2,253,663		$	1,804,419

Ending weighted average interest	4.17		%	4.52		%

A portion of our Seniors Housing Operating property investments 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. 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,
	2025		2024		$		%
Revenues:
Rental income	$	252,688	$	221,744	$	30,944	14	%
Interest income	2,111		—		2,111		n/a
Other income	231		1,199		(968)		(81)	%
Total revenues	255,030		222,943		32,087		14	%
Property operating expenses	8,818		10,817		(1,999)		(18)	%
NOI (1)	246,212		212,126		34,086		16	%
Other expenses:
Depreciation and amortization	77,684		62,535		15,149		24	%
Interest expense	4,010		358		3,652		n/a



Impairment of assets	28,801		—		28,801		n/a
Other expenses	630		1,205		(575)		(48)	%
	111,125		64,098		47,027		73	%
Income (loss) from continuing operations before income taxes and other items	135,087		148,028		(12,941)		(9)	%
Income (loss) from unconsolidated entities	(574)		(5,637)		5,063		90	%
Gain (loss) on real estate dispositions and acquisitions of controlling interests, net	(6,497)		26		(6,523)		n/a
Income (loss) from continuing operations	128,016		142,417		(14,401)		(10)	%
Net income (loss)	128,016		142,417		(14,401)		(10)	%
Less: Net income (loss) attributable to noncontrolling interests	(2,363)		5,498		(7,861)		(143)	%
Net income attributable to common stockholders	$	130,379	$	136,919	$	(6,540)	(5)	%

(1) See "Non-GAAP Financial Measures" below for additional information and reconciliations.

The increase in rental income for the three months ended March 31, 2025 was 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. During the three months ended March 31, 2025, our Triple-net portfolio had 20 leases with rental rate increases and a weighted average increase of 4.8%.

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

These increases were partially offset by the transition of Triple-net properties to Seniors Housing Operating structures during 2024. Additionally during the three months ended March 31, 2024, we wrote off previously recognized straight-line rent receivable and unamortized lease incentive balances of $9,356,000 through a reduction of rental income related to leases for which the collection of substantially all contractual lease payments was no longer probable.

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

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,
	2025		2024		$		%
SSNOI (1)	$	153,152	$	147,451	$	5,701	3.9	%

(1) For the QTD Pool, amounts relate to 470 same store properties. Please see "Non-GAAP Financial Measures" below for additional information and reconciliations.

Depreciation and amortization expense 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.

During the three months ended March 31, 2025, we recorded an impairment charge of $28,801,000 related to four 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 (loss) on real estate dispositions and acquisitions of controlling interests, net were related to the volume, timing and price of related transactions.

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,
	2025			2024
Beginning balance	$	335,552		$	38,260






Principal payments	(1,779)			(237)

Ending balance	$	333,773		$	38,023

Ending weighted average interest	3.44		%	4.39		%

A portion of our Triple-net property investments 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 ("HLBV") adjustments for 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,
	2025		2024		$		%
Revenues:
Rental income	$	208,879	$	195,908	$	12,971	7	%

Other income	2,137		2,402		(265)		(11)	%
Total revenues	211,016		198,310		12,706		6	%
Property operating expenses	64,606		62,463		2,143		3	%
NOI (1)	146,410		135,847		10,563		8	%
Other expenses:
Depreciation and amortization	67,429		66,532		897		1	%
Interest expense	(581)		1,718		(2,299)		(134)	%



Other expenses	5		609		(604)		(99)	%
	66,853		68,859		(2,006)		(3)	%
Income (loss) from continuing operations before income taxes and other items	79,557		66,988		12,569		19	%
Income (loss) from unconsolidated entities	454		(426)		880		207	%
Gain (loss) on real estate dispositions and acquisitions of controlling interests, net	4,992		79		4,913		n/a
Income (loss) from continuing operations	85,003		66,641		18,362		28	%
Net income (loss)	85,003		66,641		18,362		28	%
Less: Net income (loss) attributable to noncontrolling interests	773		(352)		1,125		320	%
Net income (loss) attributable to common stockholders	$	84,230	$	66,993	$	17,237	26	%

(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 2024 and year to date in 2025. 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, 2025, our consolidated Outpatient Medical portfolio signed 103,020 square feet of new leases and 361,875 square feet of renewals. The weighted-average term of these leases was 8 years, with a rate of $44.53 per square foot and tenant improvement and lease commission costs of $38.83 per square foot. Substantially all of these leases contain an annual fixed or contingent escalation rent structure ranging from 2.0% to 5.0%.

The fluctuation in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions that occurred during 2024 and year to date in 2025. 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,
	2025		2024		$		%
SSNOI (1)	$	132,822	$	129,981	$	2,841	2.2	%

(1) For the QTD Pool, amounts relate to 420 same store properties. Please see "Non-GAAP Financial Measures" below for additional information and reconciliations.

Changes in the gain (loss) on real estate dispositions and acquisitions of controlling interests, net were related to the volume and timing and price of related transactions.

During the three months ended March 31, 2025, we completed construction conversions representing $175,046,000 or $590 per square foot. The following is a summary of our consolidated Outpatient Medical construction projects in process, excluding expansions (dollars in thousands):

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


As of March 31, 2025
Expected Conversion Year	Properties	Square Feet	Anticipated Remaining Funding		Construction in Progress Balance
2025	4	350,394	$	62,171	$	116,045

TBD(1)	1				34,169
Total	5				$	150,214

(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,
	2025			2024
Beginning balance	$	89,088		$	229,137



Debt extinguished	(23,796)			—

Principal payments	(558)			(803)

Ending balance	$	64,734		$	228,334

Ending weighted average interest	4.35		%	5.42		%

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. 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,
	2025		2024		$		%
Revenues:

Interest income	$	60,379	$	52,664	$	7,715	15	%
Other income	28,791		24,087		4,704		20	%
Total revenues	89,170		76,751		12,419		16	%
Property operating expenses	4,282		4,286		(4)		—	%
Consolidated net operating income (loss) (1)	84,888		72,465		12,423		17	%
Expenses:
Interest expense	125,264		134,056		(8,792)		(7)	%
General and administrative expenses	63,758		53,318		10,440		20	%
Loss (gain) on derivatives and financial instruments, net	(3,210)		(3,054)		(156)		(5)	%

Provision for loan losses, net	(2,007)		1,014		(3,021)		(298)	%
Other expenses	1,258		3,560		(2,302)		(65)	%
	185,063		188,894		(3,831)		(2)	%
Income (loss) from continuing operations before income taxes and other items	(100,175)		(116,429)		16,254		14	%
Income tax benefit (expense)	5,519		(6,191)		11,710		189	%
Income (loss) from unconsolidated entities	3,365		2,862		503		18	%

Income (loss) from continuing operations	(91,291)		(119,758)		28,467		24	%
Net income (loss)	(91,291)		(119,758)		28,467		24	%
Less: Net income (loss) attributable to noncontrolling interests	812		358		454		127	%
Net income (loss) attributable to common stockholders	$	(92,103)	$	(120,116)	$	28,013	23	%

(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 interest income is primarily driven by increased advances on loans receivable during 2024 and the three months ended March 31, 2025. The increase in other income 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,
	2025		2024		$		%
Senior unsecured notes	$	116,424	$	127,960	$	(11,536)	(9)	%

Unsecured credit facility and commercial paper program	1,578		1,535		43		3	%
Loan expense	7,262		4,561		2,701		59	%
Totals	$	125,264	$	134,056	$	(8,792)	(7)	%

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, 2025 and 2024 were 2.63% and 2.87%, respectively.

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

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

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 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 portfolio.

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, 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 acquisitions of controlling interests, and impairment of assets. Amounts are in thousands except for per share data.

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


	Three Months Ended
		March 31,		December 31,		September 30,		June 30,		March 31,
FFO Reconciliation:		2025		2024		2024		2024		2024
Net income (loss) attributable to common stockholders		$	257,957	$	119,971	$	449,849	$	254,714	$	127,146
Depreciation and amortization		485,869		480,406		403,779		382,045		365,863
Impairment of assets		52,402		23,647		23,421		2,394		43,331
Loss (gain) on real estate dispositions and acquisitions of controlling interests, net		(51,777)		(8,195)		(272,266)		(166,443)		(4,707)
Noncontrolling interests		(9,468)		(6,667)		(5,801)		(6,348)		(11,996)
Unconsolidated entities		30,214		27,978		36,835		27,411		37,066
FFO		$	765,197	$	637,140	$	635,817	$	493,773	$	556,703

Average diluted shares outstanding		653,795		634,259		618,306		604,563		577,530

Per diluted share data:
Net income attributable to common stockholders(1)		$	0.40	$	0.19	$	0.73	$	0.42	$	0.22
FFO		$	1.17	$	1.00	$	1.03	$	0.82	$	0.96

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

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:		2025		2024		2024		2024		2024
Net income (loss)		$	257,266	$	123,753	$	456,800	$	260,670	$	131,634
Loss (gain) on real estate dispositions and acquisitions of controlling interests, net		(51,777)		(8,195)		(272,266)		(166,443)		(4,707)
Loss (income) from unconsolidated entities		(1,263)		(6,429)		4,038		(4,896)		7,783
Income tax expense (benefit)		(5,519)		114		(4,706)		1,101		6,191
Other expenses		14,060		34,405		20,239		48,684		14,131
Impairment of assets		52,402		23,647		23,421		2,394		43,331
Provision for loan losses, net		(2,007)		(245)		4,193		5,163		1,014
Loss (gain) on extinguishment of debt, net		6,156		—		419		1,705		6
Loss (gain) on derivatives and financial instruments, net		(3,210)		(9,102)		(9,906)		(5,825)		(3,054)
General and administrative expenses		63,758		48,707		77,901		55,565		53,318
Depreciation and amortization		485,869		480,406		403,779		382,045		365,863
Interest expense		144,962		154,469		139,050		133,424		147,318
Consolidated net operating income (NOI)		$	960,697	$	841,530	$	842,962	$	713,587	$	762,828

NOI by segment:
Seniors Housing Operating		$	483,187	$	430,689	$	378,135	$	360,467	$	342,390
Triple-net		246,212		185,032		219,304		131,587		212,126
Outpatient Medical		146,410		142,361		142,217		136,052		135,847
Non-segment/Corporate		84,888		83,448		103,306		85,481		72,465
Total NOI		$	960,697	$	841,530	$	842,962	$	713,587	$	762,828

Item 2. 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 for SSNOI:


	QTD Pool
SSNOI Property Reconciliations:	Seniors Housing Operating	Triple-net	Outpatient Medical	Total
Consolidated properties	1,212	633	371	2,216
Unconsolidated properties	44	—	76	120
Total properties	1,256	633	447	2,336
Recent acquisitions/development conversions(1)	(153)	(108)	(11)	(272)
Under development	(30)	—	(5)	(35)
Under redevelopment(2)	(1)	(3)	(2)	(6)
Current held for sale	(10)	(5)	—	(15)
Land parcels, loans and subleases	(107)	(4)	(8)	(119)
Transitions(3)	(224)	(41)	—	(265)
Other(4)	(6)	(2)	(1)	(9)
Same store properties	725	470	420	1,615

(1) Acquisitions and development conversions will enter the QTD Pool after five full quarters from 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.

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


	QTD Pool
	Three Months Ended
	March 31,
SSNOI Reconciliations:	2025		2024

Seniors Housing Operating:
Consolidated NOI	$	483,187	$	342,390
NOI attributable to unconsolidated investments	20,546		21,782
NOI attributable to noncontrolling interests	(13,085)		(17,052)
NOI attributable to non-same store properties	(122,638)		(47,316)
Non-cash NOI attributable to same store properties	(2,509)		(2,520)
Currency and ownership adjustments (1)	(643)		1,333
SSNOI at Welltower Share	364,858		298,617

Triple-net:
Consolidated NOI	246,212		212,126
NOI attributable to unconsolidated investments	—		5,597
NOI attributable to noncontrolling interests	(3,717)		(12,518)
NOI attributable to non-same store properties	(70,110)		(40,073)
Non-cash NOI attributable to same store properties	(18,803)		(20,374)
Currency and ownership adjustments (1)	(430)		2,693
SSNOI at Welltower Share	153,152		147,451

Outpatient Medical:
Consolidated NOI	146,410		135,847
NOI attributable to unconsolidated investments	4,033		4,711
NOI attributable to noncontrolling interests	(2,554)		(2,723)
NOI attributable to non-same store properties	(9,802)		(4,231)
Non-cash NOI attributable to same store properties	(5,265)		(3,697)
Currency and ownership adjustments (1)	—		74
SSNOI at Welltower Share	132,822		129,981

SSNOI at Welltower Share:
Seniors Housing Operating	364,858		298,617
Triple-net	153,152		147,451
Outpatient Medical	132,822		129,981
Total	$	650,832	$	576,049

(1) Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.43 and to translate U.K. properties at a GBP/USD rate of 1.23.

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:		2025			2024			2024			2024			2024
Net income (loss)		$	257,266		$	123,753		$	456,800		$	260,670		$	131,634
Interest expense		144,962			154,469			139,050			133,424			147,318
Income tax expense (benefit)		(5,519)			114			(4,706)			1,101			6,191
Depreciation and amortization		485,869			480,406			403,779			382,045			365,863
EBITDA		$	882,578		$	758,742		$	994,923		$	777,240		$	651,006

Interest Coverage Ratio:
Interest expense		$	144,962		$	154,469		$	139,050		$	133,424		$	147,318
Capitalized interest		11,520			14,160			15,668			14,478			13,809
Non-cash interest expense		(12,625)			(15,143)			(9,008)			(8,953)			(9,284)
Total interest		143,857			153,486			145,710			138,949			151,843
EBITDA		$	882,578		$	758,742		$	994,923		$	777,240		$	651,006
Interest coverage ratio		6.14		x	4.94		x	6.83		x	5.59		x	4.29		x

Fixed Charge Coverage Ratio:
Total interest		$	143,857		$	153,486		$	145,710		$	138,949		$	151,843
Secured debt principal payments		14,444			14,918			10,417			10,107			11,887
Total fixed charges		158,301			168,404			156,127			149,056			163,730
EBITDA		$	882,578		$	758,742		$	994,923		$	777,240		$	651,006
Fixed charge coverage ratio		5.58		x	4.51		x	6.37		x	5.21		x	3.98		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:	2025			2024			2024			2024			2024
Net income (loss)	$	1,098,489		$	972,857		$	937,544		$	615,466		$	461,138
Interest expense	571,905			574,261			574,366			591,848			610,761
Income tax expense (benefit)	(9,010)			2,700			(2,182)			7,108			9,510
Depreciation and amortization	1,752,099			1,632,093			1,532,417			1,467,952			1,427,852
EBITDA	3,413,483			3,181,911			3,042,145			2,682,374			2,509,261
Loss (income) from unconsolidated entities	(8,550)			496			8,933			8,926			54,154
Stock-based compensation expense	80,645			74,482			69,542			38,364			38,829
Loss (gain) on extinguishment of debt, net	8,280			2,130			2,130			1,712			8
Loss (gain) on real estate dispositions and acquisitions of controlling interests, net	(498,681)			(451,611)			(441,633)			(240,469)			(71,858)
Impairment of assets	101,864			92,793			84,140			68,107			66,799
Provision for loan losses, net	7,104			10,125			12,887			12,753			10,046
Loss (gain) on derivatives and financial instruments, net	(28,043)			(27,887)			(26,000)			(13,209)			(6,104)
Other expenses	117,388			117,459			119,361			137,342			99,727
Lease termination and leasehold interest adjustment (1)	—			—			—			—			(65,485)
Casualty losses, net of recoveries	13,945			12,261			8,373			6,163			7,778
Other impairment (2)	130,296			139,652			102,007			114,316			25,998
Adjusted EBITDA	$	3,337,731		$	3,151,811		$	2,981,885		$	2,816,379		$	2,669,153

Adjusted Interest Coverage Ratio:
Interest expense	$	571,905		$	574,261		$	574,366		$	591,848		$	610,761
Capitalized interest	55,826			58,115			58,502			56,781			54,173
Non-cash interest expense	(45,729)			(42,388)			(33,116)			(30,824)			(27,695)
Total interest	582,002			589,988			599,752			617,805			637,239
Adjusted EBITDA	$	3,337,731		$	3,151,811		$	2,981,885		$	2,816,379		$	2,669,153
Adjusted interest coverage ratio	5.73		x	5.34		x	4.97		x	4.56		x	4.19		x

Adjusted Fixed Charge Coverage Ratio:
Total interest	$	582,002		$	589,988		$	599,752		$	617,805		$	637,239
Secured debt principal payments	49,886			47,329			44,841			47,289			51,021
Total fixed charges	631,888			637,317			644,593			665,094			688,260
Adjusted EBITDA	$	3,337,731		$	3,151,811		$	2,981,885		$	2,816,379		$	2,669,153
Adjusted fixed charge coverage ratio	5.28		x	4.95		x	4.63		x	4.23		x	3.88		x

(1) Primarily relates to the derecognition of leasehold interests and the gain recognized in other income.
(2) Represents the write-off of straight-line rent receivable and unamortized lease incentive 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,
	2025		2024		2024		2024		2024
Book capitalization:
Unsecured credit facility and commercial paper	$	—	$	—	$	—	$	—	$	—
Long-term debt obligations (1)	15,831,799		15,608,294		15,854,937		14,027,128		14,285,686
Cash and cash equivalents and restricted cash	(3,610,285)		(3,711,457)		(3,784,408)		(2,863,598)		(2,478,335)
Total net debt	12,221,514		11,896,837		12,070,529		11,163,530		11,807,351
Total equity and noncontrolling interests(2)	34,581,977		32,572,586		31,064,003		29,688,579		28,547,908
Book capitalization	$	46,803,491	$	44,469,423	$	43,134,532	$	40,852,109	$	40,355,259
Net debt to book capitalization ratio	26%		27%		28%		27%		29%

Undepreciated book capitalization:
Total net debt	$	12,221,514	$	11,896,837	$	12,070,529	$	11,163,530	$	11,807,351
Accumulated depreciation and amortization	11,092,885		10,626,263		10,276,509		9,908,007		9,537,562
Total equity and noncontrolling interests(2)	34,581,977		32,572,586		31,064,003		29,688,579		28,547,908
Undepreciated book capitalization	$	57,896,376	$	55,095,686	$	53,411,041	$	50,760,116	$	49,892,821
Net debt to undepreciated book capitalization ratio	21%		22%		23%		22%		24%

Enterprise value:
Common shares outstanding	651,889		635,289		618,396		608,151		590,934
Period end share price	$	153.21	$	126.03	$	128.03	$	104.25	$	93.44
Common equity market capitalization	$	99,875,914	$	80,065,473	$	79,173,240	$	63,399,742	$	55,216,873
Total net debt	12,221,514		11,896,837		12,070,529		11,163,530		11,807,351
Noncontrolling interests(2)	625,218		616,378		729,722		712,153		999,965
Consolidated enterprise value	$	112,722,646	$	92,578,688	$	91,973,491	$	75,275,425	$	68,024,189
Net debt to consolidated enterprise value ratio	11%		13%		13%		15%		17%

(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 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 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, 2024 for further information on significant accounting policies that impact us. There have been no material changes to these policies in 2025.

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 healthcare 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 healthcare 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, 2024, 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 healthcare 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):

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