EX-99.2 3 a4q18supplement992.htm EXHIBIT 99.2 Exhibit
supplementalcover4q18.jpg

Table of Contents
 


    
Overview
 
 
Portfolio
 
 
Investment
 
 
Financial
 
 
Glossary
 
 
Supplemental Reporting Measures
 
 
Forward Looking Statements and Risk Factors


Overview     
 


(dollars in thousands, at Welltower pro rata ownership)
 
 
Portfolio Composition
Beds/Unit Mix
 
Average Age
 
Properties
Total
 
Independent Living
 
Assisted Living
 
Memory Care
 
Long-Term/ Post-Acute Care
Seniors Housing Operating
16

 
568
     67,306
 
29,660

 
24,866

 
12,332

 
448

Seniors Housing Triple-net
13

 
361
30,438
 
6,749

 
17,487

 
5,784

 
418

Outpatient Medical
13

 
287
17,947,619
(1) 
N/A

 
N/A

 
N/A

 
N/A

Health System
30

 
218
26,093
 
201

 
723

 
3,051

 
22,118

Long-Term/Post-Acute Care
19

 
187
     22,187
 
40

 
911

 
127

 
21,109

Total
16

 
1,621
 
 
 
 
 
 
 
 
 

NOI Performance
Same Store(2)
 
In-Place Portfolio(3)
 
 
Properties
 
4Q17 NOI
 
4Q18 NOI
% Change
 
Properties
 
Annualized
In-Place NOI
% of Total
Seniors Housing Operating
473

 
$
222,312

 
$
223,670

0.6
%
 
540

 
$
965,408

46.1
%
Seniors Housing Triple-net(4)
296

 
87,939

 
91,684

4.3
%
 
337

 
411,428

19.7
%
Outpatient Medical
233

 
81,572

 
83,007

1.8
%
 
270

 
366,820

17.5
%
Health System
—

 
—

 
—

n/a

 
218

 
143,200

6.8
%
Long-Term/Post-Acute Care(4)
124

 
44,057

 
44,668

1.4
%
 
152

 
205,324

9.9
%
Total
1,126

 
$
435,880

 
$
443,029

1.6
%
 
1,517

 
$
2,092,180

100.0
%

Portfolio Performance
 
 
 
Facility Revenue Mix
Stable Portfolio(5)
Occupancy
 
EBITDAR Coverage(6)
 
EBITDARM Coverage(6)
 
Private Pay
 
Medicaid
 
Medicare
 
Other Government(7)
Seniors Housing Operating
88.2
%
 
n/a
 
n/a
 
97.5
%
 
0.6
%
 
0.6
%
 
1.3
%
Seniors Housing Triple-net
87.1
%
 
1.09
 
1.25
 
92.7
%
 
2.9
%
 
0.5
%
 
3.9
%
Outpatient Medical
93.3
%
 
n/a
 
n/a
 
99.0
%
 
—

 
—

 
1.0
%
Long-Term/Post-Acute Care
81.3
%
 
1.40
 
1.70
 
31.7
%
 
33.0
%
 
35.3
%
 
—

Total
 
 
1.18
 
1.39
 
94.5
%
 
2.1
%
 
2.0
%
 
1.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Indicates the total square footage of Outpatient Medical.
(2) See pages 22 and 23 for reconciliation.
(3) Excludes land parcels, loans, developments and investments held for sale. See page 22 for reconciliation.
(4) Same store NOI for these property types represents rent cash receipts excluding the impact of expansions.
(5) Data as of December 31, 2018 for Seniors Housing Operating and Outpatient Medical and September 30, 2018 for remaining asset types. Health System excluded due to partial period.
(6) Represents trailing twelve month coverage metrics.
(7) Represents various federal and local reimbursement programs in the United Kingdom and Canada.

1
Portfolio
 



(dollars in thousands at Welltower pro rata ownership)
In-Place NOI Diversification(1)
By Partner:
Total Properties
 
Seniors Housing Operating

Seniors Housing
Triple-net

Outpatient
Medical

Health
System

Long-Term/ Post-Acute Care

Total
% of Total
Sunrise Senior Living North America
124

 
$
252,687

 
$
—

 
$
—

 
$
—

 
$
—

 
$
252,687

12.1
%
Sunrise Senior Living United Kingdom
44

 
71,638

 
—

 
—

 
—

 
—

 
71,638

3.4
%
ProMedica
218

 
—

 
—

 
—

 
143,200

 
—

 
143,200

6.8
%
Revera
98

 
113,750

 
—

 
—

 
—

 
—

 
113,750

5.4
%
Brookdale Senior Living
84

 
—

 
56,874

 
—

 
—

 
—

 
56,874

2.7
%
Brookdale Senior Living - Transitions(2)
28

 
34,640

 
—

 
—

 
—

 
—

 
34,640

1.7
%
Genesis HealthCare
79

 
—

 
752

 
—

 
—

 
87,289

 
88,041

4.2
%
Benchmark Senior Living
37

 
75,264

 
—

 
—

 
—

 
—

 
75,264

3.6
%
Belmont Village
21

 
69,086

 
—

 
—

 
—

 
—

 
69,086

3.3
%
Senior Resource Group
23

 
64,704

 
—

 
—

 
—

 
—

 
64,704

3.1
%
Avery
52

 
4,977

 
56,564

 
—

 
—

 
—

 
61,541

2.9
%
Brandywine Living
27

 
58,944

 
—

 
—

 
—

 
—

 
58,944

2.8
%
Remaining
682

 
219,718

 
297,238

 
366,820

 
—

 
118,035

 
1,001,811

48.0
%
Total
1,517

 
$
965,408


$
411,428


$
366,820


$
143,200


$
205,324


$
2,092,180

100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By Country:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United States
1,255

 
$
723,488

 
$
330,777

 
$
347,010

 
$
143,200

 
$
198,725

 
$
1,743,200

83.3
%
Canada
151

 
164,580

 
3,373

 
—

 
—

 
6,599

 
174,552

8.4
%
United Kingdom
111

 
77,340

 
77,278

 
19,810

 
—

 
—

 
174,428

8.3
%
Total
1,517

 
$
965,408


$
411,428


$
366,820


$
143,200


$
205,324


$
2,092,180

100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By MSA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New York
62

 
$
87,187

 
$
27,688

 
$
11,313

 
$
3,465

 
$
8,552

 
$
138,205

6.6
%
Los Angeles
64

 
104,732

 
1,704

 
25,432

 
417

 
—

 
132,285

6.3
%
Greater London
50

 
50,325

 
34,473

 
19,810

 
—

 
—

 
104,608

5.0
%
Philadelphia
50

 
20,643

 
469

 
24,355

 
11,969

 
25,966

 
83,402

4.0
%
Dallas
53

 
21,248

 
21,500

 
28,597

 
730

 
3,808

 
75,883

3.6
%
Boston
37

 
60,351

 
—

 
1,173

 
—

 
2,139

 
63,663

3.0
%
San Francisco
19

 
38,226

 
8,548

 
—

 
4,210

 
—

 
50,984

2.4
%
Seattle
31

 
25,143

 
7,498

 
14,228

 
1,565

 
—

 
48,434

2.3
%
Chicago
38

 
20,279

 
11,903

 
5,115

 
9,409

 
1,478

 
48,184

2.3
%
Washington D.C.
36

 
28,370

 
2,100

 
876

 
10,940

 
3,483

 
45,769

2.2
%
Houston
28

 
12,464

 
6,059

 
23,626

 
—

 
—

 
42,149

2.0
%
Toronto
25

 
39,792

 
—

 
—

 
—

 
—

 
39,792

1.9
%
San Diego
13

 
26,998

 
—

 
1,467

 
—

 
2,780

 
31,245

1.5
%
Miami
32

 
7,550

 
—

 
17,890

 
5,009

 
—

 
30,449

1.5
%
Minneapolis
19

 
3,624

 
12,961

 
13,724

 
—

 
—

 
30,309

1.4
%
Kansas City
22

 
4,845

 
10,581

 
6,189

 
—

 
5,475

 
27,090

1.3
%
Indianapolis
18

 
—

 
8,204

 
10,023

 
683

 
8,043

 
26,953

1.3
%
Atlanta
21

 
7,102

 
1,910

 
16,203

 
1,735

 
—

 
26,950

1.3
%
Montréal
19

 
26,840

 
—

 
—

 
—

 
—

 
26,840

1.3
%
Raleigh
11

 
7,051

 
17,253

 
—

 
—

 
—

 
24,304

1.2
%
Remaining
869

 
372,638

 
238,577

 
146,799

 
93,068

 
143,600

 
994,682

47.5
%
Total
1,517

 
$
965,408


$
411,428


$
366,820


$
143,200


$
205,324


$
2,092,180

100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Represents current quarter annualized In-Place NOI. See page 22 for reconciliation.
(2) Represents the 28 properties to be transitioned to other operators as announced in our June 27, 2018 press release.



2
Portfolio
 


(dollars in thousands at Welltower pro rata ownership)
Seniors Housing Operating
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Portfolio Performance
 
4Q17
 
1Q18
 
2Q18
 
3Q18
 
4Q18
Properties
 
 
509

 
517

 
521

 
587

 
568

Units
 
 
59,179

 
61,753

 
62,557

 
69,345

 
67,306

Total occupancy
 
 
87.3
%
 
86.3
%
 
85.9
%
 
86.9
%
 
87.2
%
Total revenues
 
 
$
700,663

 
$
706,158

 
$
733,306

 
$
849,054

 
$
834,356

Operating expenses
 
 
477,431

 
484,637

 
498,278

 
585,525

 
582,412

NOI
 
 
$
223,232

 
$
221,521

 
$
235,028

 
$
263,529

 
$
251,944

NOI margin
 
 
31.9
%
 
31.4
%
 
32.1
%
 
31.0
%
 
30.2
%
Recurring cap-ex
 
 
$
17,120

 
$
12,551

 
$
9,959

 
$
13,750

 
$
22,569

Other cap-ex
 
 
$
59,481

 
$
19,212

 
$
36,023

 
$
38,984

 
$
49,813


Same Store Performance(1)
 
4Q17
 
1Q18
 
2Q18
 
3Q18
 
4Q18
Properties
 
 
473

 
473

 
473

 
473

 
473

Occupancy
 
 
87.9
%
 
87.3
%
 
87.2
%
 
88.1
%
 
88.3
%
Same store revenues
 
 
$
683,391

 
$
681,677

 
$
687,992

 
$
700,770

 
$
702,029

Compensation
 
 
286,575

 
288,468

 
289,604

 
296,659

 
301,338

Utilities
 
 
24,978

 
27,075

 
23,363

 
26,360

 
25,535

Food
 
 
25,336

 
24,265

 
24,664

 
25,090

 
26,032

Repairs and maintenance
 
16,792

 
16,226

 
16,311

 
15,980

 
15,983

Property taxes
 
 
19,419

 
21,451

 
21,311

 
20,816

 
20,363

All other
 
 
87,979

 
84,418

 
88,403

 
89,753

 
89,108

Same store operating expenses
 
461,079

 
461,903

 
463,656

 
474,658

 
478,359

Same store NOI
 
 
$
222,312


$
219,774


$
224,336


$
226,112


$
223,670

Year over year growth rate
 
 
 
 
 
 
 
 
 
 
0.6
%

Partners
 
Properties
 
Units
 
Welltower Ownership %(2)
 
Core Markets
 
4Q18 NOI
 
% of Total
Sunrise Senior Living
 
178

 
14,798

 
96.1
%
 
Southern California
 
$
37,625

 
14.9
%
Revera
 
98

 
12,156

 
75.0
%
 
New York / New Jersey
 
21,696

 
8.6
%
Benchmark Senior Living
 
48

 
4,137

 
95.0
%
 
Northern California
 
20,676

 
8.2
%
Belmont Village
 
21

 
2,952

 
95.0
%
 
Boston
 
15,021

 
6.0
%
Senior Resource Group
 
25

 
4,496

 
66.7
%
 
Greater London
 
12,228

 
4.9
%
Brandywine Living
 
28

 
2,719

 
99.3
%
 
Toronto
 
9,993

 
4.0
%
Silverado Senior Living
 
28

 
2,522

 
95.7
%
 
Washington D.C.
 
8,370

 
3.3
%
Chartwell Retirement Residences
 
40

 
7,898

 
52.0
%
 
Seattle
 
6,887

 
2.7
%
Brookdale Senior Living
 
28

 
3,269

 
100.0
%
 
Montréal
 
6,730

 
2.7
%
Sagora Senior Living
 
14

 
2,697

 
98.3
%
 
Ottawa
 
4,589

 
1.8
%
Merrill Gardens
 
11

 
1,508

 
80.0
%
 
Vancouver
 
3,054

 
1.2
%
Senior Star Living
 
11

 
2,064

 
90.0
%
 
Birmingham, UK
 
2,082

 
0.8
%
Cogir
 
10

 
2,092

 
90.6
%
 
Manchester, UK
 
1,169

 
0.5
%
Discovery Senior Living
 
6

 
1,930

 
53.6
%
 
Core Markets
 
150,120

 
59.6
%
Northbridge
 
6

 
506

 
95.0
%
 
All Other
 
101,824

 
40.4
%
EPOCH Senior Living
 
3

 
230

 
95.0
%
 
Total
 
$
251,944

 
100.0
%
Oakmont Senior Living
 
2

 
145

 
100.0
%
 
 
 
 
 
 
Avery
 
5

 
445

 
88.3
%
 
 
 
 
 
 
Kisco
 
1

 
176

 
90.0
%
 
 
 
 
 
 
StoryPoint
 
1

 
199

 
90.0
%
 
 
 
 
 
 
Signature Senior Lifestyle
 
4

 
367

 
87.5
%
 
 
 
 
 
 
Total
 
568

 
67,306

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) See pages 22 and 23 for reconciliation.
(2) Welltower ownership percentage weighted based on In-Place NOI. See page 22 for reconciliation.




3
Portfolio
 


(dollars in thousands at Welltower pro rata ownership)
New Supply in Our US Seniors Housing Operating Portfolio
We have strategically acquired and developed properties in major US metro markets that benefit from population growth and density, affluence, job growth, and higher barriers to entry. New supply in a 3-mile ring around our properties potentially impacts just 3.9% of our total annualized In-Place NOI (IPNOI).
3-Mile Ring(1)
 
Welltower
 
Welltower
 
 
 
 
 
 
 
 
MSA
Prop. / Units
Annualized
IPNOI(2)
% of US SHO Portfolio
Prop. / Units Under Construction(3)
Prop. / Units Potentially Impacted
IPNOI Potentially Impacted(4)
5 Year Total Pop. Growth(5)
5 Year 75+ Pop. Growth(5)
Avg. Pop. Density(6)
Household Income(7)
Housing Value(7)
Est. Net Annual Inventory Growth(8)
 
Est. Annual Job Growth(9)
Los Angeles
37 / 4,236
$
104,732

14.5
%
5 / 528

7 / 1,005

$
8,577

3.3
 %
13.4
%
6,945

$
94,911

$
906,269

0.9
 %
 
1.1
 %
New York
30 / 2,598
87,187

12.1
%
8 / 986

9 / 704

16,730

1.3
 %
7.5
%
4,167

110,610

516,854

4.4
 %
 
1.2
 %
Boston
33 / 2,489
60,351

8.3
%
2 / 236

2 / 163

3,424

3.5
 %
10.0
%
3,043

111,289

604,615

4.8
 %
 
1.9
 %
San Francisco
13 / 1,523
38,226

5.3
%
1 / 125

1 / 79

3,279

4.7
 %
15.2
%
7,472

123,931

1,088,168

(0.6
)%
 
1.9
 %
Washington D.C.
13 / 1,408
28,370

3.9
%
4 / 464

5 / 435

5,557

4.4
 %
16.0
%
5,505

126,009

721,512

4.1
 %
 
(0.1
)%
San Diego
10 / 1,309
26,998

3.7
%
—

—

—

4.2
 %
18.6
%
4,896

98,622

822,903

2.8
 %
 
1.8
 %
Seattle
13 / 1,667
25,143

3.5
%
1 / 118

1 / 70

1,904

6.4
 %
22.3
%
5,936

94,376

563,026

(0.6
)%
 
3.5
 %
Dallas
11 / 1,409
21,248

2.9
%
1 / 83

1 / 90

121

7.6
 %
28.4
%
3,570

78,825

290,521

4.5
 %
 
2.6
 %
Philadelphia
12 / 980
20,643

2.9
%
3 / 334

3 / 218

4,063

1.3
 %
6.3
%
2,196

101,951

363,826

3.0
 %
 
1.5
 %
Chicago
14 / 1,654
20,279

2.8
%
1 / 102

1 / 120

609

0.4
 %
14.1
%
3,391

88,824

340,755

2.1
 %
 
1.0
 %
San Jose
6 / 735
16,715

2.3
%
—

—

—

5.1
 %
14.8
%
6,414

120,857

1,205,264

(1.1
)%
 
3.5
 %
Houston
8 / 940
12,464

1.7
%
3 / 541

2 / 263

4,651

7.9
 %
29.4
%
3,379

83,983

422,742

4.8
 %
 
3.7
 %
New Haven
5 / 524
10,992

1.5
%
—

—

—

0.0
 %
5.2
%
2,363

72,987

240,880

(0.2
)%
 
1.3
 %
Sacramento
5 / 447
9,346

1.3
%
—

—

—

4.2
 %
13.7
%
3,945

85,572

428,610

6.9
 %
 
1.5
 %
Santa Maria, CA
2 / 605
9,337

1.3
%
—

—

—

3.8
 %
7.5
%
2,809

82,493

648,827

N/A

 
0.6
 %
Phoenix
5 / 624
8,999

1.2
%
2 / 194

2 / 234

1,963

6.1
 %
16.6
%
3,549

72,376

331,238

5.2
 %
 
4.2
 %
Norwalk
3 / 305
8,775

1.2
%
2 / 252

2 / 215

5,084

1.9
 %
9.4
%
1,646

126,791

522,062

20.2
 %
 
1.3
 %
San Antonio
3 / 725
7,729

1.1
%
—

—

—

8.8
 %
26.2
%
2,830

58,864

219,189

(0.1
)%
 
1.4
 %
Santa Rosa, CA
4 / 511
7,802

1.1
%
—

—

—

3.0
 %
9.1
%
2,090

82,399

644,145

N/A

 
2.1
 %
Trenton, NJ
2 / 207
7,745

1.1
%
—

—

—

3.2
 %
12.1
%
829

128,425

485,371

N/A

 
3.2
 %
Denver
2 / 425
7,705

1.1
%
2 / 253

1 / 219

142

7.2
 %
25.4
%
4,170

100,344

580,847

3.4
 %
 
2.1
 %
Austin
4 / 409
7,689

1.1
%
—

—

—

9.6
 %
41.8
%
1,711

127,862

638,023

2.3
 %
 
3.3
 %
Miami
2 / 849
7,550

1.0
%
—

—

—

6.3
 %
19.2
%
4,332

79,675

354,902

2.7
 %
 
2.3
 %
Detroit
5 / 296
7,339

1.0
%
3 / 278

1 / 69

2,031

0.7
 %
5.3
%
3,693

84,127

234,281

1.4
 %
 
0.6
 %
Atlanta
7 / 679
7,102

1.0
%
5 / 807

5 / 521

4,762

7.1
 %
30.7
%
3,564

94,677

514,600

7.3
 %
 
2.1
 %
Total - Top 25
249 / 27,554
$
570,466

78.8
%
43 / 5,301

43 / 4,405

$
62,897

3.8
 %
14.9
%
4,415

$
101,975

$
647,044

2.9
 %
 
1.7
 %
All Other US SHO Markets
94 / 11,960
153,022

21.2
%
12 / 1,682

14 / 2,372

18,267

3.6
 %
11.9
%
2,258

77,507

335,969

 
 
 
Total US SHO
343 / 39,514
$
723,488

100.0
%
55 / 6,983

57 / 6,777

$
81,164

3.7
 %
14.0
%
3,798

$
96,170

$
573,246

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% of Total IPNOI
 
 
 
 
 
3.9
%
 
 
 
 
 
 
 
 
US National Average
 
 
 
 
 
3.6
 %
12.3
%
92

$
63,174

$
226,495

2.9
 %
(10) 
1.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Based on historical drawing patterns in our portfolio, a 3-mile ring is appropriate for most urban markets, which accounts for the vast majority of our portfolio. A 5-mile ring is appropriate for most suburban markets. A larger ring is appropriate for rural markets. Each market is unique due to population density, town lines, geographic barriers, and roads/infrastructure. In the interest of simplicity, we have applied a 3-mile competitive ring to all of our properties given the preponderance of urban locations. We have also included a sensitivity with a 5-mile ring.
(2) Represents annualized IPNOI. See pages 2 and 22 for a reconciliation.
(3) Construction data provided by NIC, reflects competitive seniors housing properties within 3 miles of Welltower SHO properties for US markets.
(4) Reflects annualized IPNOI for Welltower SHO properties within 3 miles of new construction for the component of our project that potentially competes with the project under construction.
(5) Total population and 75+ population growth data represents simple averages of Claritas estimates for 2019-2024.
(6) Average population density data represents average population per square mile within a 3-mile ring based on 2019 Claritas estimates.
(7) Household income and household value data are medians weighted by IPNOI.
(8) NIC MAP Data and Analysis Service, 4Q18. Net inventory growth is calculated at the MSA level based on historical deletions from inventory and a 5-6 quarter construction period to reflect our urban locations. Total - Top 25 Net Inventory Growth weighted by IPNOI.
(9) Annual job growth data represents MSA level growth from November 2017-November 2018 per Bureau of Labor Statistics. Total - Top 25 Estimated Annual Job Growth weighted by IPNOI
(10) Reflects net inventory growth for NIC Top 99 Markets.












4
Portfolio
 



(dollars in thousands at Welltower pro rata ownership)
New Supply in Our US Seniors Housing Operating Portfolio
We have strategically acquired and developed properties in major US metro markets that benefit from population growth and density, affluence, job growth, and higher barriers to entry. New supply in a 5-mile ring around our properties potentially impacts just 6.3% of our total annualized In-Place NOI (IPNOI).
5-Mile Ring(1)
 
Welltower
 
Welltower
 
 
 
 
 
 
 
 
MSA
Prop. / Units
Annualized IPNOI(2)
% of US SHO Portfolio
Prop. / Units Under Construction(3)
Prop. / Units Potentially Impacted
IPNOI Potentially Impacted(4)
5 Year Total Pop. Growth(5)
5 Year 75+ Pop. Growth(5)
Avg. Pop. Density(6)
Household Income(7)
Housing Value(7)
Est. Net Annual Inventory Growth(8)
 
Est. Annual Job Growth(9)
Los Angeles
37 / 4,236
$
104,732

14.5
%
6 / 653

12 / 1,581

$
14,555

3.3
%
13.8
%
6,713

$
88,900

$
829,424

0.9
 %
 
1.1
 %
New York
30 / 2,598
87,187

12.1
%
12 / 1,557

14 / 1,171

27,440

1.4
%
7.3
%
4,093

104,449

483,877

4.4
 %
 
1.2
 %
Boston
33 / 2,489
60,351

8.3
%
4 / 495

5 / 334

4,856

3.6
%
10.6
%
2,857

109,812

579,706

4.8
 %
 
1.9
 %
San Francisco
13 / 1,523
38,226

5.3
%
1 / 125

1 / 79

3,279

4.8
%
15.3
%
6,267

119,613

1,043,077

(0.6
)%
 
1.9
 %
Washington D.C.
13 / 1,408
28,370

3.9
%
6 / 651

9 / 1,110

5,255

4.8
%
16.8
%
5,432

119,727

680,625

4.1
 %
 
(0.1
)%
San Diego
10 / 1,309
26,998

3.7
%
1 / 200

2 / 249

1,808

4.4
%
17.6
%
4,419

97,831

775,102

2.8
 %
 
1.8
 %
Seattle
13 / 1,667
25,143

3.5
%
1 / 118

2 / 185

2,831

6.4
%
23.8
%
5,386

93,962

557,270

(0.6
)%
 
3.5
 %
Dallas
11 / 1,409
21,248

2.9
%
3 / 320

2 / 168

1,000

7.5
%
26.0
%
3,156

72,613

289,096

4.5
 %
 
2.6
 %
Philadelphia
12 / 980
20,643

2.9
%
6 / 606

5 / 388

7,534

1.5
%
7.1
%
2,325

93,356

333,028

3.0
 %
 
1.5
 %
Chicago
14 / 1,654
20,279

2.8
%
3 / 390

3 / 358

4,252

0.2
%
14.6
%
3,154

91,705

346,269

2.1
 %
 
1.0
 %
San Jose
6 / 735
16,715

2.3
%
—

—

—

5.0
%
15.0
%
5,497

121,127

1,205,297

(1.1
)%
 
3.5
 %
Houston
8 / 940
12,464

1.7
%
3 / 541

2 / 263

4,651

8.2
%
32.5
%
3,298

78,995

307,649

4.8
 %
 
3.7
 %
New Haven
5 / 524
10,992

1.5
%
2 / 269

2 / 200

3,110

0.3
%
5.6
%
2,409

71,385

255,491

(0.2
)%
 
1.3
 %
Sacramento
5 / 447
9,346

1.3
%
4 / 535

3 / 238

5,234

4.2
%
14.5
%
3,604

81,184

423,590

6.9
 %
 
1.5
 %
Santa Maria, CA
2 / 605
9,337

1.3
%
—

—

—

4.4
%
8.7
%
1,672

79,858

668,022

N/A

 
0.6
 %
Phoenix
5 / 624
8,999

1.2
%
8 / 1310

5 / 624

6,577

6.5
%
16.4
%
3,470

72,854

311,004

5.2
 %
 
4.2
 %
Norwalk
3 / 305
8,775

1.2
%
3 / 392

2 / 215

5,605

1.8
%
10.3
%
1,325

95,819

496,422

20.2
 %
 
1.3
 %
San Antonio
3 / 725
7,729

1.1
%
—

—

—

8.5
%
25.8
%
2,613

60,968

218,766

(0.1
)%
 
1.4
 %
Santa Rosa, CA
4 / 511
7,802

1.1
%
—

—

—

3.3
%
10.1
%
1,159

84,098

632,665

N/A

 
2.1
 %
Trenton, NJ
2 / 207
7,745

1.1
%
—

—

—

2.2
%
12.4
%
1,094

121,665

453,582

N/A

 
3.2
 %
Denver
2 / 425
7,705

1.1
%
2 / 253

1 / 219

142

6.8
%
27.3
%
4,010

96,566

435,017

3.4
 %
 
2.1
 %
Austin
4 / 409
7,689

1.1
%
1 / 86

1 / 90

555

9.4
%
40.6
%
1,996

97,962

530,257

2.3
 %
 
3.3
 %
Miami
2 / 849
7,550

1.0
%
—

—

—

6.5
%
14.6
%
4,331

65,599

320,535

2.7
 %
 
2.3
 %
Detroit
5 / 296
7,339

1.0
%
5 / 460

3 / 201

3,807

0.8
%
7.4
%
3,691

75,126

205,265

1.4
 %
 
0.6
 %
Atlanta
7 / 679
7,102

1.0
%
5 / 807

5 / 521

4,762

7.1
%
30.5
%
3,373

89,944

456,511

7.3
 %
 
2.1
 %
Total - Top 25
249 / 27,554
$
570,466

78.8
%
76 / 9,768

79 / 8,194

$
107,253

3.9
%
15.2
%
4,173

$
97,105

$
608,436

2.9
 %
 
1.7
 %
All Other US SHO Markets
94 / 11,960
153,022

21.2
%
23 / 3,170

25 / 3,960

24,024

3.9
%
13.0
%
1,894

75,638

325,101

 
 
 
Total US SHO
343 / 39,514
$
723,488

100.0
%
99 / 12,938

104 / 12,154

$
131,277

3.9
%
14.6
%
3,556

$
92,012

$
541,218

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% of Total IPNOI
 
 
 
 
6.3
%
 
 
 
 
 
 
 
 
US National Average
 
 
 
 
 
3.6
%
12.3
%
92

$
63,174

$
226,495

2.9
 %
(10) 
1.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Based on historical drawing patterns in our portfolio, a 3-mile ring is appropriate for most urban markets, which accounts for the vast majority of our portfolio. A 5-mile ring is appropriate for most suburban markets. A larger ring is appropriate for rural markets. Each market is unique due to population density, town lines, geographic barriers, and roads/infrastructure. In the interest of simplicity, we have applied a 3-mile competitive ring to all of our properties given the preponderance of urban locations. We have also included a sensitivity with a 5-mile ring.
(2) Represents annualized IPNOI. See pages 2 and 22 for a reconciliation.
(3) Construction data provided by NIC, reflects competitive seniors housing properties within 5 miles of Welltower SHO properties for US markets.
(4) Reflects annualized IPNOI for Welltower SHO properties within 5 miles of new construction for the component of our project that potentially competes with the project under construction.
(5) Total population and 75+ population growth data represents simple averages of Claritas estimates for 2019-2024.
(6) Average population density data represents average population per square mile within a 5-mile ring based on 2019 Claritas estimates.
(7) Household income and household value data are medians weighted by IPNOI.
(8) NIC MAP Data and Analysis Service, 4Q18. Net inventory growth is calculated at the MSA level based on historical deletions from inventory and a 5-6 quarter construction period to reflect our urban locations. Total - Top 25 Net Inventory Growth weighted by IPNOI.
(9) Annual job growth data represents MSA level growth from November 2017-November 2018 per Bureau of Labor Statistics. Total -Top 25 Estimated Annual Job Growth weighted by IPNOI.
(10) Reflects net inventory growth for NIC Top 99 Markets.



5
Portfolio
 


(Currency amounts in thousands, except per unit and REVPOR. Company amounts at Welltower pro rata ownership. DNA = data not available.)
Seniors Housing Operating Quality Indicators
 
 
 
 
 
 
 
 
 
US Portfolio(1,3,4)
 
Industry Benchmarks(2)
Property age
 
16
 
20
5 year total population growth
 
3.7
 %
 
3.6
%
5 year 75+ population growth
 
14.0
 %
 
12.3
%
Housing value
 
$
573,246

 
$
226,495

Household income
 
$
96,170

 
$
63,174

REVPOR
 
$
6,784

 
$
4,803

SS REVPOR growth
 
2.0
 %
 
2.7
%
SSNOI per unit
 
$
23,636

 
$
18,930

SSNOI growth
 
(0.2
)%
 
DNA

 
 
 
 
 
 
 
UK Portfolio(1,3,4)
 
Industry Benchmarks(5)
Property age
 
10

 
21

Units per property
 
79

 
41

5 year total population growth
 
3.8
 %
 
3.3
%
5 year 75+ population growth
 
18.6
 %
 
8.9
%
Housing value
 
£
477,307

 
£
289,612

REVPOR
 
£
6,417

 
£
3,720

SS REVPOR growth
 
1.7
 %
 
3.3
%
SSNOI per unit
 
£
16,968

 
£
9,544

SSNOI growth
 
8.1
 %
 
DNA

 
 
 
 
 
 
 
Canadian Portfolio(1,3,4)
 
Industry Benchmarks(6)
5 year total population growth
 
5.2
 %
 
5.0
%
5 year 75+ population growth
 
17.4
 %
 
DNA

Housing value
 
C$
845,347

 
C$
692,675

Household income
 
C$
106,574

 
C$
95,952

REVPOR
 
C$
3,600

 
C$
2,320

SS REVPOR growth
 
1.7
 %
 
2.4
%
SSNOI per unit
 
C$
15,324

 
DNA

SSNOI growth
 
1.1
 %
 
DNA


Notes:
(1) Property age, housing value and household income are NOI-weighted as of December 31, 2018. The median housing value and household income is used for the US, and the average housing value and household income is used for the UK and Canada. Housing value, household income and population growth are based on a 3-mile radius. Growth figures represent performance of Welltower's same store portfolio for current quarter. See page 24 for reconciliations.
(2) Property age, REVPOR and REVPOR growth per 4Q18 NIC MAP for Majority AL Properties in the primary and secondary markets; AMR is used as a proxy for REVPOR; population growth reflects 2019-2024 Claritas projections; housing value and household income are the US median per Claritas 2019; NOI per unit per The State of Seniors Housing 2018 and represents 2017 results.
(3) REVPOR is based on total 4Q18 results. See page 24 for reconciliation.
(4) SSNOI per unit represents the SSNOI per unit available based on trailing four quarters for those properties in the portfolio for 15 months preceding the end of the current portfolio performance period. SSNOI per unit for UK portfolio in GBP calculated by taking SSNOI per unit in USD divided by a standardized GBP/USD rate of 1.35. SSNOI per unit for Canadian portfolio in CAD calculated by taking SSNOI per unit in USD divided by a standardized USD/CAD rate of 1.25. See page 24 for reconciliation.
(5) Property age, units per property, REVPOR, REVPOR growth and NOI per Unit derived from LaingBuisson, Care of Older People UK Market Report 29th Edition; population growth reflects 2017-2022 CACI projections; housing value represents UK average per CACI 2017.
(6) Occupancy per Canada Mortgage and Housing Corporation's Seniors' Housing Report 2017; population growth reflects 2018-2023 Environics projection; housing value and household income represents Canadian average per Environics WealthScapes 2018; REVPOR and REVPOR growth represent annual averages from 2018 CMHC Seniors' Housing Survey.


6
Portfolio
 


(dollars in thousands at Welltower pro rata ownership)
Payment Coverage Stratification
 
 
 
EBITDARM Coverage(1)
 
EBITDAR Coverage(1)
% of In-Place NOI
Seniors Housing Triple-net
Long-Term/ Post- Acute Care
Total
 
Weighted Average Maturity
 
Number of Leases
 
Seniors Housing Triple-net
Long-Term/ Post- Acute Care
Total
 
Weighted Average Maturity
 
Number of Leases
<0.85x
0.3
%
0.1
%
0.4
%
 
6

 
3

 
1.3
%
0.1
%
1.4
%
 
8

 
7

0.85x - 0.95x
—
%
—
%
—
%
 
—

 
—

 
0.7
%
0.8
%
1.5
%
 
11

 
2

0.95x - 1.05x
0.7
%
0.1
%
0.8
%
 
8

 
3

 
4.3
%
0.9
%
5.2
%
 
10

 
7

1.05x - 1.15x
3.6
%
0.8
%
4.4
%
 
12

 
6

 
3.0
%
—
%
3.0
%
 
11

 
5

1.15x - 1.25x
2.1
%
0.9
%
3.0
%
 
9

 
5

 
5.8
%
—
%
5.8
%
 
12

 
4

1.25x - 1.35x
2.6
%
—
%
2.6
%
 
11

 
3

 
0.1
%
4.0
%
4.1
%
 
16

 
4

>1.35x
6.6
%
6.3
%
12.9
%
 
12

 
17

 
0.7
%
2.4
%
3.1
%
 
9

 
8

Total
15.9
%
8.2
%
24.1
%
 
11

 
37

 
15.9
%
8.2
%
24.1
%
 
11

 
37

 
Revenue and Lease Maturity(2)
 
 
 
 
 
 
 
 
Rental Income
 
 
 
 
 
 
Year
 
Seniors Housing
Triple-net (3)
 
Outpatient Medical
 
Health
System
 
Long-Term / Post-Acute Care
 
Interest
Income
 
Total
Revenues
 
% of Total
2019
 
$
28,224

 
$
30,888

 
$
—

 
$
—

 
$
10,811

 
$
69,923

 
5.8
%
2020
 
—

 
34,095

 
—

 
—

 
7,294

 
41,389

 
3.4
%
2021
 
3,505

 
42,880

 
—

 
10,187

 
2,349

 
58,921

 
4.9
%
2022
 
3,561

 
44,429

 
—

 
4,710

 
20,482

 
73,182

 
6.0
%
2023
 
—

 
35,189

 
—

 
—

 
1,269

 
36,458

 
3.0
%
2024
 
11,096

 
39,900

 
—

 
—

 
1,175

 
52,171

 
4.3
%
2025
 
61,003

 
21,126

 
—

 
—

 
2,787

 
84,916

 
7.0
%
2026
 
89,241

 
33,305

 
—

 
34,452

 
—

 
156,998

 
13.0
%
2027
 
30,965

 
12,806

 
—

 
1,026

 
578

 
45,375

 
3.7
%
2028
 
10,721

 
19,125

 
—

 
42,601

 
1,198

 
73,645

 
6.1
%
2029
 
5,775

 
15,897

 
—

 
—

 
207

 
21,879

 
1.8
%
Thereafter
 
164,140

 
78,013

 
143,200

 
107,978

 
2,184

 
495,515

 
41.0
%
 
 
$
408,231

 
$
407,653

 
$
143,200

 
$
200,954

 
$
50,334

 
$
1,210,372

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Avg Maturity Years
 
9

 
6

 
14

 
12

 
3

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Represents trailing twelve month coverage metrics as of September 30, 2018 for stable portfolio only, adjusted for the lease restructurings noted on page 23. Health System excluded due to partial period. Agreements included represent 82% of total Seniors Housing Triple-net and Long-Term/Post-Acute Care In-Place NOI. See page 22 for a reconciliation. Agreements with mixed units use the predominant type based on investment balance.
(2) Excludes all land parcels, developments and investments held for sale. Rental income represents annualized cash base rent for effective lease agreements. The amounts are derived from the current contracted monthly cash base rent, net of collectability reserves, if applicable. Rental income does not include common area maintenance charges, the amortization of above/below market lease intangibles, or other non cash income. Interest income represents contractual rate of interest for loans, net of collectability reserves if applicable.
(3) 2019 maturity includes short term lease on properties expected to transition from Seniors Housing Triple-net to Seniors Housing Operating in early 2019.




7
Portfolio
 


(dollars in thousands at Welltower pro rata ownership)
Outpatient Medical
Total Portfolio Performance
 
4Q17
 
1Q18
 
2Q18
 
3Q18
 
4Q18
Properties
 
274

 
259

 
259

 
263

 
287

Square feet
 
17,631,245

 
16,330,391

 
16,330,593

 
16,606,129

 
17,947,619

Occupancy(1)
 
94.1
%
 
93.8
%
 
93.4
%
 
93.0
%
 
93.1
%
Total revenues
 
$
132,511

 
$
127,124

 
$
126,405

 
$
130,344

 
$
134,844

Operating expenses
 
40,116

 
41,172

 
39,658

 
42,524

 
40,136

NOI
 
$
92,395

 
$
85,952

 
$
86,747

 
$
87,820

 
$
94,708

NOI margin
 
69.7
%
 
67.6
%
 
68.6
%
 
67.4
%
 
70.2
%
Revenues per square foot(1)
 
$
31.57

 
$
32.88

 
$
32.70

 
$
33.13

 
$
31.58

NOI per square foot(1)
 
$
22.01

 
$
22.23

 
$
22.44

 
$
22.32

 
$
22.18

Recurring cap-ex
 
$
5,280

 
$
5,847

 
$
5,910

 
$
8,729

 
$
9,095

Other cap-ex
 
$
7,097

 
$
5,239

 
$
7,165

 
$
3,938

 
$
4,852


Same Store Performance(2)
 
4Q17
 
1Q18
 
2Q18
 
3Q18
 
4Q18
Properties
 
233

 
233

 
233

 
233

 
233

Occupancy
 
93.7
%
 
93.9
%
 
93.5
%
 
93.4
%
 
93.0
%
Same store revenues
 
$
120,468

 
$
121,787

 
$
120,232

 
$
123,074

 
$
119,955

Same store operating expenses
 
38,896

 
39,384

 
37,864

 
40,690

 
36,948

Same store NOI
 
$
81,572


$
82,403


$
82,368


$
82,384


$
83,007

Year over year growth rate
 
 
 
 
 
 
 
 
 
1.8
%

Portfolio Diversification
by Tenant(3)
 
Rental Income
 
% of Total
 
Quality Indicators
 
Kelsey-Seybold
 
$
20,710

 
5.1
%
 
Health system affiliated properties as % of NOI(3)
95.3
%
NMC Health
 
19,640

 
4.8
%
 
Health system affiliated tenants as % of rental income(3)
62.8
%
Virtua
 
16,609

 
4.1
%
 
Retention (trailing twelve months)(3)
76.8
%
Texas Health Resources
 
11,921

 
2.9
%
 
In-house managed properties as % of square feet(3,4)
95.6
%
Catholic Health Initiatives
 
10,346

 
2.5
%
 
Average remaining lease term (years)(3)
6.5

Remaining portfolio
 
328,427

 
80.6
%
 
Average building size (square feet)(3)
63,503

Total
 
$
407,653

 
100.0
%
 
Average age (years)
13


Expirations(3)
 
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
Occupied square feet
 
1,221,358

 
1,346,567

 
1,631,527

 
1,773,130

 
1,402,867

 
8,547,812

% of occupied square feet
 
7.7
%
 
8.5
%
 
10.2
%
 
11.1
%
 
8.8
%
 
53.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Includes consolidated rental properties, mortgages, unconsolidated rental properties and development properties. Per square foot amounts are annualized.
(2) Includes 233 same store properties representing 15,345,470 square feet. See pages 22 and 23 for reconciliation.
(3) Excludes all land parcels, developments and investments held for sale. Rental income represents annualized cash base rent for effective lease agreements. The amounts are derived from the current contracted monthly cash base rent, net of collectability reserves, if applicable. Rental income does not include common area maintenance charges, the amortization of above/below market lease intangibles, or other non cash income.
(4) Includes only multi-tenant properties.









8
Investment
 


(dollars in thousands at Welltower pro rata ownership)
Relationship Investment History
chart-e5ce416983895f29acc.jpg
Detail of Acquisitions/JVs(1)
 
2014

2015

2016

2017
 
1Q18
 
2Q18
 
3Q18
 
4Q18
 
14-18 Total

Count
 
41

 
44

 
22

 
18

 
5

 
2

 
2
 
6
 
140

Total
 
$
2,981,276

 
$
3,765,912

 
$
2,287,973

 
$
742,020

 
$
475,786

 
$
171,600

 
$
2,511,971

 
$
628,904

 
$
13,565,442

Low
 
3,500

 
6,080

 
10,618

 
7,310

 
4,950

 
75,600

 
30,248

 
15,000

 
3,500

Median
 
31,150

 
33,513

 
27,402

 
24,025

 
42,789

 
85,800

 
1,255,985

 
55,900

 
31,393

High
 
880,157

 
437,472

 
1,150,000

 
149,400

 
217,000

 
96,000

 
2,481,723

 
390,667

 
2,481,723

Notes:
(1) Includes land and non-yielding asset acquisitions.


9
Investment
 

Property Acquisitions/Joint Ventures Detail(1)
Operator
 
Units
 
Location
 
MSA
Seniors Housing Operating
 
StoryPoint Senior Living
 
199
 
3717 Orders Road
Grove City
Ohio
US
 
Columbus
 
 
 
 
 
 
 
 
 
 
 
Outpatient Medical
 
Health System
 
Square Feet
 
Location
 
MSA
 
Ascension Health
 
53,270
 
6600 Fish Pond Rd
Waco
Texas
US
 
Waco
 
Ascension Health
 
27,427
 
2217 Decatur Highway
Gardendale
Alabama
US
 
Birmingham
 
Ascension Health
 
105,787
 
601 Highway 6 West
Waco
Texas
US
 
Waco
 
Catholic Health Initiatives
 
35,868
 
20207 Chasewood Park Drive
Houston
Texas
US
 
Houston
 
Catholic Health Initiatives
 
68,034
 
450 South Kitsap Boulevard
Port Orchard
Washington
US
 
Bremerton
 
Catholic Health Initiatives
 
55,680
 
2200 NW Myhre Road
Silverdale
Washington
US
 
Bremerton
 
Edward-Elmhurst Health
 
75,033
 
133 E Brush Hill Road
Elmhurst
Illinois
US
 
Chicago
 
Edward-Elmhurst Health
 
27,733
 
556 Egg Harbor Road
Sewell
New Jersey
US
 
Philadelphia
 
Edward-Elmhurst Health
 
51,233
 
303 West Lake Street
Addison
Illinois
US
 
Chicago
 
Johns Hopkins Health System
 
160,190
 
10710 Charter Drive
Columbia
Maryland
US
 
Baltimore
 
Northwell Health
 
106,403
 
444 Merrick Road
Lynbrook
New York
US
 
New York
 
Providence St. Joseph Health
 
28,500
 
2555 Marvin Road Northeast
Lacey
Washington
US
 
Olympia
 
Sentara Healthcare
 
35,066
 
5659 Parkway Drive
Gloucester
Virginia
US
 
Virginia Beach
 
Sentara Healthcare
 
40,303
 
12825 Minnieville Road
Woodbridge
Virginia
US
 
Washington D.C.
 
Unaffiliated
 
36,161
 
3485 Independence Drive
Birmingham
Alabama
US
 
Birmingham
 
Unaffiliated
 
60,330
 
6144 Airport Boulevard
Mobile
Alabama
US
 
Mobile
 
UNC Health Care
 
21,906
 
6011 Farrington Road
Chapel Hill
North Carolina
US
 
Durham
 
UNC Health Care
 
22,116
 
6013 Farrington Road
Chapel Hill
North Carolina
US
 
Durham
 
UNC Health Care
 
62,567
 
2226 North Carolina Highway 54
Chapel Hill
North Carolina
US
 
Durham
 
UnitedHealth Group, Inc.
 
65,760
 
100 Trich Drive
Washington
Pennsylvania
US
 
Pittsburgh
 
US Oncology
 
38,237
 
5206 Research Drive
San Antonio
Texas
US
 
San Antonio
 
Total
 
1,177,604
 
 
 
 
 
 
 
Investment Timing
 
 
Acquisitions/Joint Ventures(1)

Yield

 
Loan Advances(2)
Yield

 
Dispositions
Yield

October
 
$
—

—
%
 
$
100

7.7
%
 
$
98,361

6.5
%
November
 
94,388

5.0
%
 
—

—

 
93,948

2.9
%
December
 
464,394

5.7
%
 
100

7.7
%
 
202,153

0.8
%
Total
 
$
558,782

5.6
%
 
$
200

7.7
%
 
$
394,462

2.7
%
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Excludes land acquisitions. Address may include multiple properties.
(2) Includes advances for non-real estate loans and excludes advances for development loans.

10
Investment
 

(dollars in thousands, except per bed / unit / square foot, at Welltower pro rata ownership)
Gross Investment Activity
 
 
 
 
 
 
 
 
 
 
Fourth Quarter 2018
 
Properties
Beds / Units / Square Feet
 
Pro Rata
Amount
 
Investment Per
Bed / Unit /
SqFt
Yield
Acquisitions / Joint Ventures(1)
 
 
 
 
 
 
 
 
Seniors Housing Operating
1
199

units
 
$
73,727

 
370,487

6.0
%
Outpatient Medical
25
1,177,604

sf
 
485,055

 
412

5.5
%
Total acquisitions
26
 
 
 
$
558,782

 
 
5.6
%
 
 
 
 
 
 
 
 
 
Development(2)
 
 
 
 
 
 
 
 
Development projects:
 
 
 
 
 
 
 
 
Seniors Housing Operating
8
1,127

units
 
$
30,253

 
 
 
Seniors Housing Triple-net
7
712

units
 
12,022

 
 
 
Outpatient Medical
6
655,103

sf
 
44,965

 
 
 
Total development projects
21
 
 
 
87,240

 
 
 
Expansion projects:
 
 
 
 
 
 
 
 
Seniors Housing Operating
2
92

units
 
4,198

 
 
 
Seniors Housing Triple-net
1
64

units
 
1,031

 
 
 
Total expansion projects
3
 
 
 
5,229

 
 
 
 
 
 
 
 
 
 
 
 
Total development
24
 
 
 
$
92,469

 
 
7.5
%
 
 
 
 
 
 
 
 
 
Loan advances(3)
 
 
 
 
$
200

 
 
7.7
%
Yielding gross investments
 
 
 
 
$
651,451

 
 
5.8
%
 
 
 
 
 
 
 
 
 
Land acquisitions
2


 
 
70,122

 


 
Total gross investments
 
 
 
 
$
721,573

 
 
 
 
 
 
 
 
 
 
 
 
Dispositions(4)
 
 
 
 
 
 
 
Seniors Housing Operating
2
223
units
 
$
33,165

 
148,722

7.7
%
Outpatient Medical
3
132,095
sf
 
36,116

 
273

9.0
%
Long-Term/Post-Acute Care
3
332

beds
 
40,500

 
121,988

3.9
%
Real property dispositions
8
 
 
 
109,781

 
 
6.7
%
 
 
 
 
 
 
 
 
 
Loan payoffs
 
 
 
 
46,002

 
 
7.1
%
Dispositions
 
 
 
 
155,783

 
 
6.8
%
 
 
 
 
 
 
 
 
 
QCP non-yielding dispositions(5)
40
5,274

beds
 
238,679
 
45,256

—

Total dispositions
48
 
 
 
$
394,462

 
 
2.7
%
 
 
 
 
 
 
 
 
 
Net investments
 
 
 
 
$
327,111

 
 
 
 
Notes:
(1) Amounts represent purchase price excluding accounting adjustments pursuant to U.S. GAAP for all consolidated and unconsolidated property acquisitions. Yield represents annualized contractual or projected cash rent/NOI to be generated divided by investment amount, excluding land parcels.
(2) Amounts represent cash funded and capitalized interest for all developments/expansions including construction in progress, loans and in-substance real estate. Yield represents projected annualized cash rent/NOI to be generated upon conversion/stabilization divided by commitment amount.
(3) Amounts represent cash funded to operators for real estate and non-real estate loans, excluding development loans. Yield represents annualized contractual interest divided by investment amount.
(4) Amounts represent proceeds received for loan payoffs and consolidated and unconsolidated property sales. Yield represents annualized cash rent/interest/NOI that was being generated pre-disposition divided by proceeds.
(5) QCP non-yielding dispositions represents cash proceeds for property sales.






11
Investment
 

(dollars in thousands, except per bed / unit / square foot, at Welltower pro rata ownership)
Gross Investment Activity
 
 
 
 
 
 
 
 
 
 
Year-To-Date 2018
 
Properties
Beds / Units / Square Feet
 
Pro Rata
Amount
 
Investment Per
Bed / Unit /
SqFt
Yield
Acquisitions / Joint Ventures(1)
 
 
 
 
 
 
 
 
Seniors Housing Operating
12
3,097

units
 
$
673,374

 
217,428

6.7
%
Outpatient Medical
30
1,368,871

sf
 
563,042

 
411

5.5
%
QCP acquisition(2)
246
26,093

 
 
2,169,963

 
N/A

7.9
%
Total acquisitions
288
 
 
 
$
3,406,379

 
 
7.3
%
 
 
 
 
 
 
 
 
 
Development(3)
 
 
 
 
 
 
 
 
Development projects:
 
 
 
 
 
 
 
 
Seniors Housing Operating
9
1,222

units
 
$
89,326

 
 
 
Seniors Housing Triple-net
9
882

units
 
63,928

 
 
 
Outpatient Medical
9
839,918

sf
 
104,366

 
 
 
Long-Term/Post-Acute Care
1
120

beds
 
12,307

 
 
 
Total development projects
28
 
 
 
269,927

 
 
 
Expansion projects:
 
 
 
 
 
 
 
 
Seniors Housing Operating
2
102

units
 
7,006

 
 
 
Seniors Housing Triple-net
2
81

units
 
12,885

 
 
 
Total expansion projects
4
 
 
 
19,891

 
 
 
 
 
 
 
 
 
 
 
 
Total development
32
 
 
 
$
289,818

 
 
7.6
%
 
 
 
 
 
 
 
 
 
Loan advances(4)
 
 
 
 
$
48,192

 
 
6.1
%
Yielding gross investments
 
 
 
 
$
3,744,389

 
 
7.3
%
 
 
 
 
 
 
 
 
 
QCP non-yielding acquisition(5)
59
7,986

beds
 
$
311,760

 
 
 
Land acquisitions
2
N/A

 
 
70,122

 
 
 
Total gross investments
 
 
 
 
$
4,126,271

 
 
 
 
 
 
 
 
 
 
 
 
Dispositions(6)
 
 
 
 
 
 
 
Seniors Housing Operating
4
473

units
 
$
40,073

 
84,721

7.5
%
Seniors Housing Triple-net
26
2,625

units
 
452,841

 
172,511

7.2
%
Outpatient Medical
21
1,573,683

sf
 
464,843

 
295

6.2
%
Long-Term/Post-Acute Care
10
1,122

beds
 
134,047

 
119,471

8.7
%
QCP non-core dispositions
12
1,328

beds
 
77,262

 
58,179

15.3
%
Real property dispositions
73
 
 
 
1,169,066

 
 
7.5
%
 
 
 
 
 
 
 
 
 
Loan payoffs
 
 
 
 
209,471

 
 
7.9
%
Dispositions

 
 
 
1,378,537

 
 
7.6
%
 
 
 
 
 
 
 
 
 
QCP non-yielding dispositions(5)
59
7,986

beds
 
386,141

 
48,352

—

Total dispositions
132
 
 
 
$
1,764,678

 
 
5.9
%
 
 
 
 
 
 
 
 
 
Net investments
 
 
 
 
$
2,361,593

 
 
 
 
Notes:
(1) Amounts represent purchase price excluding accounting adjustments pursuant to U.S. GAAP for all consolidated and unconsolidated property acquisitions. Yield represents annualized contractual or projected cash rent/NOI to be generated divided by investment amount, excluding land parcels.
(2) QCP acquisition includes 26,093 Health System beds, 69 Seniors Housing Triple-net units, 2,741 Long-Term/Post-Acute Care beds, and 151,503 Outpatient Medical square feet.
(3) Amounts represent cash funded and capitalized interest for all developments/expansions including construction in progress, loans and in-substance real estate. Yield represents projected annualized cash rent/NOI to be generated upon conversion/stabilization divided by commitment amount.
(4) Amounts represent cash funded to operators for real estate and non-real estate loans, excluding development loans. Yield represents annualized contractual interest divided by investment amount.
(5) QCP non-yielding acquisition represents allocated purchase price. QCP non-yielding dispositions represents cash proceeds for property sales.
(6) Amounts represent proceeds received for loan payoffs and consolidated and unconsolidated property sales. Yield represents annualized cash rent/interest/NOI that was being generated pre-disposition divided by proceeds.



12
Investment
 

(dollars in thousands at Welltower pro rata ownership)
Development Summary(1)
 
 
 
 
 
Unit Mix
 
 
 
 
 
 
Facility
Total
Independent Living
Assisted Living
Memory Care
Long-term/Post-acute Care
 
Commitment Amount
 
Balance at 12/31/18
Estimated Conversion
 
 
 
 
 
 
 
 
 
 
 
 
Seniors Housing Operating
 
 
 
 
 
 
 
 
 
 
Toronto, ON
332

332

—

—

—

 
$
32,564

 
$
28,491

2Q19
 
Scarborough, ON
172

141

—

31

—

 
23,608

 
4,609

4Q19
 
Shrewsbury, NJ
81

—

52

29

—

 
11,696

 
5,767

4Q19
 
New York, NY
151

—

69

82

—

 
141,666

 
90,665

1Q20
 
Wandsworth, UK
98

—

78

20

—

 
56,389

 
31,374

1Q20
 
Wilton, CT
90

—

59

31

—

 
13,974

 
7,093

1Q20
 
Potomac, MD
120

—

90

30

—

 
55,208

 
7,436

4Q20
 
Fairfield, CT
83

—

54

29

—

 
12,648

 
5,914

4Q20
 
Subtotal
1,127

473

402

252

—

 
$
347,753

 
$
181,349

 
 
 
 
 
 
 
 
 
 
 
 
 
Seniors Housing Triple-net
 
 
 
 
 
 
 
 
 
 
Kingswood, UK
73

—

46

27

—

 
$
11,041

 
$
6,638

2Q19
 
El Dorado, CA
80

—

57

23

—

 
28,000

 
9,247

3Q19
 
Westerville, OH
90

—

63

17

10

 
22,800

 
8,160

3Q19
 
Union, KY
162

162

—

—

—

 
34,600

 
9,848

1Q20
 
Apex, NC
152

98

30

24

—

 
30,883

 
3,000

1Q20
 
Edenbridge, UK
85

—

51

34

—

 
19,104

 
6,507

2Q20
 
Droitwich, UK
70

—

45

25

—

 
16,153

 
4,573

4Q20
 
Subtotal
712

260

292

150

10

 
$
162,581

 
$
47,973

 
 
 
 
 
 
 
 
 
 
 
 
 
Outpatient Medical
 
 
 
 
 
 
 
 
 
 
 
 
Rentable Square Ft
Preleased %
Health System Affiliation
 
 
Commitment Amount
 
Balance at 12/31/18
Estimated Conversion
 
Brooklyn, NY
 
140,955

100
%
Yes
 
 
$
105,306

 
$
58,390

3Q19
 
Mission Viejo, CA
 
104,500

100
%
Yes
 
 
71,372

 
31,002

3Q19
 
Houston, TX
 
73,500

100
%
Yes
 
 
23,455

 
5,097

4Q19
 
Porter, TX
 
55,000

100
%
Yes
 
 
20,800

 
4,198

4Q19
 
Charlotte, NC
 
176,640

100
%
Yes
 
 
95,703

 
16,632

2Q20
 
Charlotte, NC
 
104,508

100
%
Yes
 
 
52,255

 
5,367

3Q20
 
Subtotal
 
655,103

 
 
 
 
$
368,891

 
$
120,686

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Development Projects
 
 
 
 
$
879,225

 
$
350,008

 
 
 
 
 
 
 
 
 
 
 
 
 
Note:
(1) Includes development projects (construction in progress, development loans and in-substance real estate) and excludes expansion projects. Commitment amount represents current balances plus unfunded commitments to complete development.




13
Investment
 

(dollars in thousands at Welltower pro rata ownership)
 
 
Development Funding Projections(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Projected Future Funding
 
 
 
Projects
 
Beds / Units / Square Feet
 
Projected Yields(2)
 
2019 Funding
 
Funding Thereafter
 
Total Unfunded Commitments
 
Committed Balances
Seniors Housing Operating
8

 
1,127

 
8.1
%
 
$
115,105

 
$
51,299

 
$
166,404

 
$
347,753

Seniors Housing Triple-net
7

 
712

 
7.5
%
 
77,935

 
36,673

 
114,608

 
162,581

Outpatient Medical
6

 
655,103

 
6.3
%
 
191,731

 
56,474

 
248,205

 
368,891

Total
21

 
 
 
7.0
%
 
$
384,771

 
$
144,446

 
$
529,217

 
$
879,225


Development Project Conversion Estimates(1)
Quarterly Conversions
 
Annual Conversions
 
 
Amount
 
Projected
Yields(2)
 
 
 
Amount
 
Projected
Yields(2)
1Q18 actual
 
$
136,762

 
9.3
%
 
2018 actual
 
$
321,722

 
8.4
%
2Q18 actual
 
89,118

 
7.0
%
 
2019 estimate
 
350,642

 
7.2
%
3Q18 actual
 
95,842

 
8.5
%
 
2020 estimate
 
528,583

 
7.3
%
4Q18 actual
 
—

 
—
%
 
Total
 
$
1,200,947

 
7.6
%
2Q19 estimate
 
43,605

 
7.7
%
 
 
 
 
 
 
3Q19 estimate
 
227,478

 
6.9
%
 
 
 
 
 
 
4Q19 estimate
 
79,559

 
7.6
%
 
 
 
 
 
 
1Q20 estimate
 
277,512

 
7.6
%
 
 
 
 
 
 
2Q20 estimate
 
114,807

 
6.0
%
 
 
 
 
 
 
3Q20 estimate
 
52,255

 
5.7
%
 
 
 
 
 
 
4Q20 estimate
 
84,009

 
8.9
%
 
 
 
 
 
 
Total
 
$
1,200,947

 
7.5
%
 
 
 
 
 
 

Unstabilized Properties
 
 
 
9/30/2018 Properties
 
Stabilizations
 
Construction Conversions(3)
 
Acquisitions/ Dispositions
 
12/31/2018 Properties
 
Beds / Units
Seniors Housing Operating
25

 
(3
)
 
—

 
1

 
23

 
2,504

Seniors Housing Triple-net
19

 
(4
)
 
1

 
—

 
16

 
1,744

Long-Term/Post-Acute Care
9

 
(1
)
 
—

 
—

 
8

 
886

Total
53

 
(8
)
 
1

 
1

 
47

 
5,134


Occupancy
9/30/2018 Properties
 
Stabilizations
 
Construction Conversions(3)
 
Acquisitions/ Dispositions
 
Progressions
 
12/31/2018 Properties
0% - 50%
15

 
—

 
—

 
—

 
(3
)
 
12

50% - 70%
23

 
(5
)
 
1

 
1

 
2

 
22

70% +
15

 
(3
)
 
—

 
—

 
1

 
13

Total
53

 
(8
)
 
1

 
1

 
—

 
47

 
 
 
 
 
 
 
 
 
 
 
 
Occupancy
12/31/2018 Properties
 
Months In Operation
 
Revenues
 
% of Total Revenues(4)
 
Gross Investment Balance
 
% of Total Gross Investment
0% - 50%
12

 
7

 
$
29,476

 
0.6
%
 
$
333,715

 
1.0
%
50% - 70%
22

 
19

 
63,580

 
1.3
%
 
539,908

 
1.6
%
70% +
13

 
21

 
26,019

 
0.5
%
 
341,034

 
1.0
%
Total
47

 
16

 
$
119,075

 
2.4
%
 
$
1,214,657

 
3.7
%
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Includes development projects (construction in progress, development loans, and in-substance real estate) and excludes expansion projects.
(2) Actual yields may vary.
(3) Includes expansion and development loan conversions.
(4) Percent of total revenues based on current quarter annualized pro rata total revenues on page 16.


14
Financial
 


(dollars in thousands at Welltower pro rata ownership)
 
 
 
Components of NAV
 
 
 
 
 
 
 
 
 
Stabilized NOI
 
 
Pro rata beds/units/square feet
Seniors Housing Operating(1)
 
$
965,408

52,742

units
 
Seniors Housing Triple-net
 
411,428

26,814

units
 
Outpatient Medical
 
366,820

16,287,922

square feet
 
Health System
 
143,200

20,874

beds
 
Long-Term/Post-Acute Care
 
205,324

14,764

beds
 
Total In-Place NOI(2)
 
2,092,180

 
 
 
Incremental stabilized NOI(3)
 
41,103

 
 
 
Total stabilized NOI
 
$
2,133,283

 
 
 
 
 
 
 
 
 
Obligations
 
 
 
 
 
Lines of credit
 
$
1,147,000

 

 
Senior unsecured notes(4)
 
9,699,984

 

 
Secured debt(4)
 
2,705,362

 

 
Capital lease obligations
 
70,668

 

 
Total Debt
 
$
13,623,014

 

 
Add (Subtract):
 
 
 

 
Other liabilities (assets), net(5)
 
$
454,003

 

 
Cash and cash equivalents and restricted cash
 
(316,129
)
 

 
Preferred stock
 
718,498

 

 
Net obligations
 
$
14,479,386

 

 
 
 
 
 
 
 
Other Assets
 
 
 
 
 
Land parcels
 
$
92,155

 
Effective Interest Rate(7)

Real estate loans receivable(6)
 
362,317

 
8.1%

Non real estate loans receivable
 
282,443

 
8.8%

Other investments(8)
 
39,117

 
 

Investments held for sale(9)
 
694,296

 
 

Development properties:(10)
 
 
 
 

Current balance
 
$
355,109

 
 

Unfunded commitments
 
558,552

 
 

Committed balances
 
$
913,661

 
 

Projected yield
 
7.0
%
 
 

Projected NOI
 
$
63,956

 
 

 
 
 
 
 
 
Common Shares Outstanding
 
383,675

 
 
 
 
 
 
 
 
 
Notes:
(1) Includes $9,889,000 attributable to our proportional share of income from unconsolidated management company investments.
(2) See page 22 for reconciliation.
(3) Represents incremental NOI from Seniors Housing Operating lease-up properties that have been open for less than two years.
(4) Represents principal amounts due and do not include unamortized premiums/discounts, deferred loan expenses or other fair value adjustments as reflected on the balance sheet. Includes $1,257,251,000 of foreign secured debt.
(5) Includes liabilities / (assets) that impact cash or NOI and excludes non-real estate loans and non-cash items such as the following:
Unearned revenues
 
$
209,166

Below/(above) market lease intangibles, net
 
45,950

Deferred taxes, net
 
(21,458
)
Available-for-sale equity investments
 
(11,286
)
In place lease intangibles, net
 
(49,945
)
Other non-cash liabilities / (assets), net
 
3,451

Total non-cash liabilities/(assets), net
 
$
175,878


(6) Represents $430,689,000 of real estate loans excluding development loans and net of $68,372,000 of allowance for loan losses.
(7) Average cash-pay interest rates are 8.1% and 6.0% for real estate and non real estate loans, respectively. Rates exclude non-accrual/interest-free loans.
(8) Represents fair value estimate of unconsolidated equity investments including Genesis HealthCare stock and a management company investment not reflected in IPNOI.
(9) Represents expected proceeds from assets held for sale.
(10) See pages 13-14. Also includes expansion projects.


15
Financial
 

(dollars in thousands at Welltower pro rata ownership)
Net Operating Income(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q17
 
1Q18
 
2Q18
 
3Q18
 
4Q18
Revenues:
 
 
 
 
 
 
 
 
 
 
Seniors Housing Operating
 
 
 
 
 
 
 
 
 
 
Resident fees and service
 
$
699,545

 
$
704,930

 
$
731,580

 
$
847,712

 
$
833,134

Interest income
 
—

 
85

 
172

 
159

 
157

Other income
 
1,118

 
1,143

 
1,554

 
1,183

 
1,065

Total revenues
 
700,663

 
706,158

 
733,306

 
849,054

 
834,356

 
 
 
 
 
 
 
 
 
 
 
Seniors Housing Triple-net
 
 
 
 
 
 
 
 
 
 
Rental income
 
145,825

 
143,925

 
137,864

 
102,205

 
104,431

Interest income
 
7,144

 
7,087

 
7,428

 
6,911

 
5,749

Other income
 
936

 
312

 
12,959

 
1,303

 
637

Total revenues
 
153,905

 
151,324

 
158,251

 
110,419

 
110,817

 
 
 
 
 
 
 
 
 
 
 
Outpatient Medical
 
 
 
 
 
 
 
 
 
 
Rental income
 
131,975

 
126,870

 
126,106

 
129,953

 
130,076

Interest income
 
—

 
12

 
43

 
85

 
170

Other income
 
536

 
242

 
256

 
306

 
4,598

Total revenues
 
132,511

 
127,124

 
126,405

 
130,344

 
134,844

 
 
 
 
 
 
 
 
 
 
 
Health System
 
 
 
 
 
 
 
 
 
 
Rental income
 
—

 
—

 
—

 
30,614

 
43,033

Total revenues
 
—

 
—

 
—

 
30,614

 
43,033

 
 
 
 
 
 
 
 
 
 
 
Long-Term/Post-Acute Care
 
 
 
 
 
 
 
 
 
 
Rental income
 
74,422

 
63,284

 
61,598

 
63,868

 
64,216

Interest income
 
4,831

 
7,463

 
5,819

 
7,468

 
7,006

Other income
 
(900
)
 
1,064

 
236

 
390

 
201

Total revenues
 
78,353

 
71,811

 
67,653

 
71,726

 
71,423

 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
 
 
 
 
 
 
Other income
 
247

 
246

 
378

 
572

 
591

Total revenues
 
247

 
246

 
378

 
572

 
591

 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
Rental income
 
352,222

 
334,079

 
325,568

 
326,640

 
341,756

Resident fees and service
 
699,545

 
704,930

 
731,580

 
847,712

 
833,134

Interest income
 
11,975

 
14,647

 
13,462

 
14,623

 
13,082

Other income
 
1,937

 
3,007

 
15,383

 
3,754

 
7,092

Total revenues
 
$
1,065,679

 
$
1,056,663

 
$
1,085,993

 
$
1,192,729

 
$
1,195,064

 
 
 
 
 
 
 
 
 
 
 
Property operating expenses:
 
 
 
 
 
 
 
 
 
 
Seniors Housing Operating
 
$
477,431

 
$
484,637

 
$
498,278

 
$
585,525

 
$
582,412

Seniors Housing Triple-net
 
—

 
17

 
9

 
(1
)
 
21

Outpatient Medical
 
40,116

 
41,172

 
39,658

 
42,524

 
40,136

Health System
 
—

 
—

 
—

 
12

 
17

Long-Term/Post-Acute Care
 
—

 
—

 
124

 
412

 
287

Total property operating expenses
 
$
517,547

 
$
525,826

 
$
538,069

 
$
628,472

 
$
622,873

 
 
 
 
 
 
 
 
 
 
 
Net operating income:
 
 
 
 
 
 
 
 
 
 
Seniors Housing Operating
 
$
223,232

 
$
221,521

 
$
235,028


$
263,529


$
251,944

Seniors Housing Triple-net
 
153,905

 
151,307

 
158,242


110,420


110,796

Outpatient Medical
 
92,395

 
85,952

 
86,747


87,820


94,708

Health System
 
—

 
—

 
—


30,602


43,016

Long-Term/Post-Acute Care
 
78,353

 
71,811

 
67,529


71,314


71,136

Corporate
 
247

 
246

 
378


572


591

Net operating income
 
$
548,132

 
$
530,837

 
$
547,924

 
$
564,257

 
$
572,191

 
Note:
(1) Please see discussion of Supplemental Reporting Measures on page 21. Includes amounts from investments sold or held for sale.


16
Financial
 

(dollars in thousands)
Leverage and EBITDA Reconciliations(1)
 
 
 
 
Twelve Months Ended
 
Three Months Ended
 
 
12/31/2018
 
12/31/2018
Net income (loss)
 
$
829,750

 
$
124,696

Interest expense
 
526,592

 
144,369

Income tax expense (benefit)
 
8,674

 
1,504

Depreciation and amortization
 
950,459

 
242,834

EBITDA
 
$
2,315,475

 
$
513,403

Loss (income) from unconsolidated entities
 
641

 
(195
)
Stock-based compensation(2)
 
27,646

 
4,847

Loss (gain) on extinguishment of debt, net
 
16,097

 
53

Loss (gain) on real estate dispositions, net
 
(415,575
)
 
(41,913
)
Impairment of assets
 
115,579

 
76,022

Loss (gain) on derivatives and financial instruments, net
 
(4,016
)
 
1,626

Other expenses(2)
 
111,990

 
10,502

Additional other income(4)
 
(14,832
)
 
(4,027
)
Total adjustments
 
(162,470
)
 
46,915

Adjusted EBITDA
 
$
2,153,005

 
$
560,318

0
Interest Coverage Ratios
 
 
 
 
Interest expense
 
$
526,592

 
$
144,369

Capitalized interest
 
7,905

 
1,548

Non-cash interest expense
 
(10,860
)
 
(3,307
)
Total interest
 
$
523,637

 
$
142,610

EBITDA
 
$
2,315,475

 
$
513,403

Interest coverage ratio
 
4.42
 x
 
3.60
 x
Adjusted EBITDA
 
$
2,153,005

 
$
560,318

Adjusted Interest coverage ratio
 
4.11
 x
 
3.93
 x
0
Fixed Charge Coverage Ratios
 
 
 
 
Total interest
 
$
523,637

 
$
142,610

Secured debt principal amortization
 
56,288

 
13,994

Preferred dividends
 
46,704

 
11,676

Total fixed charges
 
$
626,629

 
$
168,280

EBITDA
 
$
2,315,475

 
$
513,403

Fixed charge coverage ratio
 
3.70
 x
 
3.05
 x
Adjusted EBITDA
 
$
2,153,005

 
$
560,318

Adjusted Fixed charge coverage ratio
 
3.44
 x
 
3.33
 x
0
Net Debt to EBITDA Ratios
Total debt
 
 
 
$
13,297,144

  Less: cash and cash equivalents(3)
 
 
 
(215,376
)
Net debt
 
 
 
$
13,081,768

EBITDA Annualized
 
 
 
$
2,053,612

Net debt to EBITDA ratio
 
 
 
6.37
 x
Adjusted EBITDA Annualized
 
 
 
$
2,241,272

Net debt to Adjusted EBITDA ratio
 
 
 
5.84
 x
 
Notes:
(1) Please see discussion of Supplemental Reporting Measures on page 21.
(2) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.
(3) Includes IRC Section 1031 deposits, if any.
(4) Relates to the recognition of lease termination fee income and the reversal of a contingent liability related to a prior year acquisition.




17
Financial
 

(amounts in thousands except share price)
Leverage and Current Capitalization(1)
 
 
 
 
% of Total
Book Capitalization
 
 
 
 
 
Lines of credit
 
 
$
1,147,000

 
3.94
 %
Long-term debt obligations(2)
 
 
12,150,144

 
41.77
 %
Cash and cash equivalents(3)
 
 
(215,376
)
 
(0.74
)%
Net debt to consolidated book capitalization
 
 
$
13,081,768

 
44.97
 %
Total equity(4)
 
 
16,010,645

 
55.03
 %
Consolidated book capitalization
 
 
$
29,092,413

 
100.00
 %
Joint venture debt, net(5)
 
 
219,651

 
 
Total book capitalization
 
 
$
29,312,064

 
 
 
 
 
 
 
 
Undepreciated Book Capitalization
 
 
 
 
 
Lines of credit
 
 
$
1,147,000

 
3.32
 %
Long-term debt obligations(2)
 
 
12,150,144

 
35.12
 %
Cash and cash equivalents(3)
 
 
(215,376
)
 
(0.62
)%
Net debt to consolidated undepreciated book capitalization
 
 
$
13,081,768

 
37.82
 %
Accumulated depreciation and amortization
 
 
5,499,958

 
15.90
 %
Total equity(4)
 
 
16,010,645

 
46.28
 %
Consolidated undepreciated book capitalization
 
 
$
34,592,371

 
100.00
 %
Joint venture debt, net(5)
 
 
219,651

 
 
Total undepreciated book capitalization
 
 
$
34,812,022

 
 
 
 
 
 
 
 
Enterprise Value
 
 
 
 
 
Lines of credit
 
 
$
1,147,000

 
2.74
 %
Long-term debt obligations(2)
 
 
12,150,144

 
29.06
 %
Cash and cash equivalents(3)
 
 
(215,376
)
 
(0.52
)%
Net debt to consolidated enterprise value
 
 
$
13,081,768

 
31.28
 %
Common shares outstanding
 
 
383,675

 
 
Period end share price
 
 
69.41

 
 
Common equity market capitalization
 
 
$
26,630,882

 
63.70
 %
Noncontrolling interests(4)
 
 
1,378,311

 
3.30
 %
Preferred stock
 
 
718,498

 
1.72
 %
Consolidated enterprise value
 
 
$
41,809,459

 
100.00
 %
Joint venture debt, net(5)
 
 
219,651

 
 
Total enterprise value
 
 
$
42,029,110

 
 
 
 
 
 
 
 
Secured Debt as % of Total Assets
 
 
 
 
 
Secured debt(2)
 
 
$
2,476,177

 
8.16
 %
Total assets
 
 
$
30,342,072

 
 
 
 
 
 
 
 
Total Debt as % of Total Assets
 
 
 
 
 
Total debt(2)
 
 
$
13,297,144

 
43.82
 %
Total assets
 
 
$
30,342,072

 
 
 
 
 
 
 
 
Unsecured Debt as % of Unencumbered Assets
 
 
 
 
 
Unsecured debt(2)
 
 
$
10,750,299

 
37.25
 %
Unencumbered assets
 
 
$
28,857,047

 
 
 
 
 
 
 
 
Notes:
(1) Please see discussion of Supplemental Reporting Measures on page 21.
(2) Amounts include unamortized premiums/discounts and other fair value adjustments as reflected on our balance sheet.
(3) Inclusive of IRC Section 1031 deposits, if any.
(4) Includes all noncontrolling interests (redeemable and permanent) as reflected on our balance sheet.
(5) Net of Welltower's share of unconsolidated debt and minority partners' share of Welltower consolidated debt.






18
Financial
 

(dollars in thousands)
 
 
 
 
 
 
 
 
 
Debt Maturities and Principal Payments(1)
Year
Lines of Credit(2)
 
Senior Unsecured Notes(3,4,5,6)
 
Consolidated Secured Debt
 
Share of Unconsolidated Secured Debt
 
Noncontrolling Interests' Share of Consolidated Secured Debt
 
Combined Debt(7)
 
% of Total
Wtd. Avg. Interest Rate
2019
$
—

 
$
600,000

 
$
508,899

 
$
51,614

 
$
(94,239
)
 
$
1,066,274

 
7.87
%
4.03
%
2020
—

 
677,489

 
138,288

 
61,284

 
(31,384
)
 
845,677

 
6.24
%
5.00
%
2021
—

 
450,000

 
369,124

 
26,740

 
(117,548
)
 
728,316

 
5.37
%
4.59
%
2022
—

 
600,000

 
280,418

 
17,771

 
(30,026
)
 
868,163

 
6.41
%
4.86
%
2023
1,147,000

 
1,783,325

 
325,371

 
21,724

 
(103,690
)
 
3,173,730

 
23.42
%
3.54
%
2024
—

 
400,000

 
285,847

 
35,733

 
(80,629
)
 
640,951

 
4.73
%
4.35
%
2025
—

 
1,250,000

 
197,581

 
404,933

 
(33,932
)
 
1,818,582

 
13.42
%
3.96
%
2026
—

 
700,000

 
36,426

 
16,152

 
(8,637
)
 
743,941

 
5.49
%
4.17
%
2027
—

 
—

 
132,920

 
60,659

 
(33,817
)
 
159,762

 
1.18
%
3.64
%
2028
—

 
1,451,470

 
39,536

 
21,252

 
(9,178
)
 
1,503,080

 
11.09
%
4.48
%
Thereafter
—

 
1,787,700

 
171,301

 
72,781

 
(27,912
)
 
2,003,870

 
14.78
%
5.03
%
Totals
$
1,147,000

 
$
9,699,984

 
$
2,485,711

 
$
790,643

 
$
(570,992
)
 
$
13,552,346

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Avg Interest Rate(8)
3.33
%
 
4.48
%
 
3.90
%
 
3.88
%
 
3.79
%
 
4.27
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Avg Maturity Years
4.6

 
8.3

 
5.3

 
8.7

 
5.1

 
7.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Floating Rate Debt
100.00
%
 
7.12
%
 
34.02
%
 
13.03
%
 
55.21
%
 
18.24
%
 
 
 

Debt by Local Currency(1)
 
 
 
Lines of Credit
 
Senior Unsecured Notes
 
Consolidated Secured Debt
 
Share of Unconsolidated Secured Debt
 
Noncontrolling Interests' Share of Consolidated Secured Debt
 
Combined Debt
 
Investment Hedges(9)
United States
 
$
1,147,000

 
$
7,957,500

 
$
1,228,460

 
$
590,140

 
$
(284,985
)
 
$
10,638,115

 
$
—

United Kingdom
 
—

 
1,339,170

 
171,771

 
—

 
(42,943
)
 
1,467,998

 
1,136,009

Canada
 
—

 
403,314

 
1,085,480

 
200,503

 
(243,064
)
 
1,446,233

 
421,647

Totals
 
$
1,147,000

 
$
9,699,984

 
$
2,485,711

 
$
790,643

 
$
(570,992
)
 
$
13,552,346

 
$
1,557,656

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Represents principal amounts due excluding unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(2) The primary unsecured credit facility has capacity of $3,700,000,000 with remaining availability of $1,853,000,000. The unsecured revolving credit facility matures on July 19, 2022 (with an option to extend for two successive terms of six months each at our discretion) and the term credit facilities mature on July 19, 2023.
(3) 2020 includes CAD $300,000,000 of 3.35% senior unsecured notes (approximately $219,989,000 USD at December 31, 2018). The notes mature on November 25, 2020.
(4) 2023 includes a $500,000,000 term loan and a CAD $250,000,000 unsecured term loan (approximately $183,325,000 USD at December 31, 2018). The loans mature on July 19, 2023. The interest rates on the loans are LIBOR + 0.9% for USD and CDOR + 0.9% for CAD.
(5) 2028 includes £550,000,000 of 4.80% senior unsecured notes (approximately $701,470,000 USD at December 31, 2018). The notes mature on November 20, 2028.
(6) Thereafter includes £500,000,000 of 4.50% senior unsecured notes (approximately $637,700,000 USD at December 31, 2018). The notes mature on December 1, 2034.
(7) Excludes capital lease obligations of $70,668,000, of which $69,016,000 mature in April 2023 and $1,652,000 have various maturities.
(8) The interest rate on the primary unsecured credit facility is 1-month LIBOR + 0.825%. Senior notes and secured debt average interest rate represents the face value note rate.
(9) Represents notional value of foreign currency derivative contracts at end of period spot FX rates. The fair market value of the gains (losses) of these contracts is currently USD $23,447,000, as represented in other assets (liabilities) on the balance sheet. We supplement our local currency debt with foreign currency derivative contracts to offset the translation and economic exposures related to our international investments. Currently, our foreign currency derivatives are comprised of forward contracts and cross-currency swaps.


19
Glossary
 

Age: Current year, less the year built, adjusted for major renovations. Average age is weighted by pro rata NOI.
Cap-ex, Tenant Improvements, Leasing Commissions: Represents amounts paid in cash for: 1) recurring and non-recurring capital expenditures required to maintain and re-tenant our properties; 2) second generation tenant improvements; and 3) leasing commissions paid to third party leasing agents to secure new tenants.
Construction Conversion: Represents completed construction projects that were placed into service and began generating NOI.
EBITDAR: Earnings before interest, taxes, depreciation, amortization and rent. The company uses unaudited, periodic financial information provided solely by tenants/borrowers to calculate EBITDAR and has not independently verified the information.
EBITDAR Coverage: Represents the ratio of EBITDAR to contractual rent for leases or interest and principal payments for loans. EBITDAR coverage is a measure of a property’s ability to generate sufficient cash flows for the operator/borrower to pay rent and meet other obligations. The coverage shown excludes properties that are unstabilized, closed or for which data is not available or meaningful.
EBITDARM: Earnings before interest, taxes, depreciation, amortization, rent and management fees. The company uses unaudited, periodic financial information provided solely by tenants/borrowers to calculate EBITDARM and has not independently verified the information.
EBITDARM Coverage: Represents the ratio of EBITDARM to contractual rent for leases or interest and principal payments for loans. EBITDARM coverage is a measure of a property’s ability to generate sufficient cash flows for the operator/borrower to pay rent and meet other obligations, assuming that management fees are not paid. The coverage shown excludes properties that are unstabilized, closed or for which data is not available or meaningful.
Health System: Includes independent, assisted living, dementia care and long-term post-acute care properties subject to triple-net operating leases to or guaranteed by investment-grade health systems.
Health System - Affiliated: Outpatient medical properties are considered affiliated with a health system if one or more of the following conditions are met: 1) the land parcel is contained within the physical boundaries of a hospital campus; 2) the land parcel is located adjacent to the campus; 3) the building is physically connected to the hospital regardless of the land ownership structure; 4) a ground lease is maintained with a health system entity; 5) a master lease is maintained with a health system entity; 6) significant square footage is leased to a health system entity; 7) the property includes an ambulatory surgery center with a hospital partnership interest; or (8) a significant square footage is leased to a physician group that is either employed, directly or indirectly by a health system, or has a significant clinical and financial affiliation with the health system.
Long-Term/Post-Acute Care: Includes all skilled nursing, rehabilitation and long-term acute-care facilities where the majority of individuals require 24-hour nursing or medical care.  Generally, these properties are licensed for Medicaid and/or Medicare reimbursement and are subject to triple-net operating leases.  Most of these facilities focus on higher acuity patients and offer rehabilitation units specializing in cardiac, orthopedic, dialysis, neurological or pulmonary rehabilitation.
MSA:  For the United States and Canada, we use the Metropolitan Statistical Area as defined by the U.S. Census Bureau and the Census Metropolitan Areas as defined by Statistics Canada, respectively.  For the United Kingdom, we generally use the Metro Region as defined by EuroStat with Greater London defined as a 55-mile radius around the city’s center.
Occupancy: Outpatient medical occupancy represents the percentage of total rentable square feet leased and occupied, including month-to-month leases, as of the date reported. Occupancy for all other property types represents average quarterly operating occupancy based on the most recent quarter of available data and excludes properties that are unstabilized, closed or for which data is not available or meaningful. The company uses unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy and has not independently verified the information.
Outpatient Medical: Outpatient medical buildings include properties offering ambulatory medical services such as primary and secondary care, outpatient surgery, diagnostic procedures and rehabilitation. These properties are typically affiliated with a health system and may be located on a hospital campus. They are specifically designed and constructed for use by health care professionals to provide services to patients. They also include medical office buildings that typically contain sole and group physician practices and may provide laboratory and other specialty services.
Seniors Housing Operating (SHO): Includes independent, assisted living, and dementia care properties in the U.S. and Canada and all care homes in the U.K. structured to take advantage of the REIT Investment Diversification and Empowerment Act of 2007.
Seniors Housing Triple-net (SH-NNN): Includes independent, assisted living, and dementia care properties in the U.S. and Canada and all care homes in the U.K. subject to triple-net operating leases and loans receivable.
Square Feet: Net rentable square feet calculated utilizing Building Owners and Managers Association measurement standards.
Stable: Generally, a triple-net rental property is considered stable (versus unstabilized or under development) when it has achieved EBITDAR coverage of 1.00x or greater for three consecutive months or, if targeted performance has not been achieved, 12 months following the budgeted stabilization date.   A seniors housing operating facility is considered stable upon the earliest of 90% occupancy, NOI at or above the underwritten target or 24 months past the closing date (for acquisitions) or the open date (for development). Excludes assets held for sale and assets disposed of during the current quarter.
Unstabilized: An acquisition that does not meet the stable criteria upon closing or a construction property that has opened but not yet reached stabilization.


20
Supplemental Reporting Measures
 


The company believes that revenues and net income, as defined by U.S. generally accepted accounting principles (U.S. GAAP), are the most appropriate earnings measurements. However, the company considers EBITDA, Adjusted EBITDA, REVPOR, SS REVPOR, NOI, In-Place NOI (IPNOI) and SSNOI to be useful supplemental measures of its operating performance. Excluding EBITDA and Adjusted EBITDA, these supplemental measures are disclosed on a Welltower pro rata ownership basis. Pro rata amounts are derived by reducing consolidated amounts for minority partners’ noncontrolling ownership interests and adding Welltower’s minority ownership share of unconsolidated amounts. Welltower does not control unconsolidated investments. While the company considers pro rata disclosures useful, they may not accurately depict the legal and economic implications of Welltower’s joint venture arrangements and should be used with caution.
The company defines 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 seniors housing operating and outpatient medical properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. IPNOI represents NOI excluding interest income, other income and non-IPNOI and adjusted for timing of current quarter portfolio changes such as acquisitions, development conversions, segment transitions, dispositions and investments held for sale. 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. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Land parcels, loans, and sub-leases as well as any properties acquired, developed/redeveloped (including major refurbishments where 20% or more of units are simultaneously taken out of commission for 30 days or more), sold or classified as held for sale during that period are excluded from the same store amounts. Properties undergoing operator transitions and/or segment transitions (except triple-net to seniors housing operating with the same operator) are also excluded from the same store amounts. Normalizers include adjustments that in management’s opinion are appropriate in considering SSNOI, a supplemental, non-GAAP performance measure. None of these adjustments, which may increase or decrease SSNOI, are reflected in the company’s financial statements prepared in accordance with U.S. GAAP. Significant normalizers (defined as any that individually exceed 0.50% of SSNOI growth per property type) are separately disclosed and explained. The company believes NOI, IPNOI and SSNOI provide investors relevant and useful information because they measure the operating performance of the company’s properties at the property level on an unleveraged basis. The company uses NOI, IPNOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.
REVPOR represents the average revenues generated per occupied room per month at the company’s seniors housing operating properties. It is calculated as our pro rata version of total resident fees and services revenues from the income statement divided by average monthly occupied room days. SS REVPOR is used to evaluate the REVPOR performance of our properties under a consistent population which eliminates changes in the composition of our portfolio. It is based on the same pool of properties used for SSNOI and includes any revenue normalizations used for SSNOI. The company uses REVPOR and SS REVPOR to evaluate the revenue-generating capacity and profit potential of its seniors housing operating portfolio independent of fluctuating occupancy rates. They are also used in comparison against industry and competitor statistics, if known, to evaluate the quality of the company’s seniors housing operating portfolio.
We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt, net of cash and Internal Revenue Code (“IRC”) Section 1031 deposits. We expect to maintain capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current profile. The coverage ratios are based on EBITDA which stands for earnings (net income per income statement) before interest expense, income taxes, depreciation and amortization. Covenants in our senior unsecured notes and primary credit facility contain financial ratios based on a definition of EBITDA that is specific to those agreements. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have defined Adjusted EBITDA to exclude unconsolidated entities and to include adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses/impairments on properties, gains/losses on derivatives and financial instruments, other expenses, and additional other income. We believe that EBITDA and Adjusted EBITDA, along with net income and cash flow provided from operating activities, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. We primarily utilize them to measure 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, secured debt principal amortization and preferred dividends. Our leverage ratios include net debt to Adjusted EBITDA, book capitalization, undepreciated book capitalization and market capitalization. Book capitalization represents the sum of net debt (defined as total long-term debt less cash and cash equivalents and any IRC Section 1031 deposits), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Market capitalization 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 company’s 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. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. None of the supplemental reporting 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 reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Multi-period amounts may not equal the sum of the individual quarterly amounts due to rounding.


21
Supplemental Reporting Measures
 

(dollars in thousands)
 
 
 
 
 
 
 
 
Non-GAAP Reconciliations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOI Reconciliation
 
4Q17
 
1Q18
 
2Q18
 
3Q18
 
4Q18
Net income (loss)
 
$
(89,743
)
 
$
453,555

 
$
167,273

 
$
84,226

 
$
124,696

Loss (gain) on real estate dispositions, net
 
(56,381
)
 
(338,184
)
 
(10,755
)
 
(24,723
)
 
(41,913
)
Loss (income) from unconsolidated entities
 
59,449

 
2,429

 
(1,249
)
 
(344
)
 
(195
)
Income tax expense (benefit)
 
25,663

 
1,588

 
3,841

 
1,741

 
1,504

Other expenses
 
60,167

 
3,712

 
10,058

 
88,626

 
10,502

Impairment of assets
 
99,821

 
28,185

 
4,632

 
6,740

 
76,022

Provision for loan losses
 
62,966

 
—

 
—

 
—

 
—

Loss (gain) on extinguishment of debt, net
 
371

 
11,707

 
299

 
4,038

 
53

Loss (gain) on derivatives and financial instruments, net
 
—

 
(7,173
)
 
(7,460
)
 
8,991

 
1,626

General and administrative expenses
 
28,365

 
33,705

 
32,831

 
28,746

 
31,101

Depreciation and amortization
 
238,458

 
228,201

 
236,275

 
243,149

 
242,834

Interest expense
 
127,217

 
122,775

 
121,416

 
138,032

 
144,369

Consolidated net operating income
 
$
556,353

 
$
540,500

 
$
557,161

 
$
579,222

 
$
590,599

NOI attributable to unconsolidated investments(1)
 
21,539

 
21,620

 
21,725

 
22,247

 
21,933

NOI attributable to noncontrolling interests(2)
 
(29,760
)
 
(31,283
)
 
(30,962
)
 
(37,212
)
 
(40,341
)
Pro rata net operating income (NOI)(3)
 
$
548,132

 
$
530,837

 
$
547,924

 
$
564,257

 
$
572,191


In-Place NOI Reconciliation
At Welltower pro rata ownership
 
Seniors Housing Operating
 
Seniors Housing Triple-net
 
Outpatient Medical
 
Health System
 
Long-Term
/Post-Acute Care
 
Corporate
 
Total
Revenues
 
$
834,356

 
$
110,817

 
$
134,844

 
$
43,033

 
$
71,423

 
$
591

 
$
1,195,064

Property operating expenses
 
(582,412
)
 
(21
)
 
(40,136
)
 
(17
)
 
(287
)
 
—

 
(622,873
)
NOI(3)
 
251,944

 
110,796

 
94,708

 
43,016

 
71,136

 
591

 
572,191

Adjust:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
(157
)
 
(5,749
)
 
(170
)
 
—

 
(7,006
)
 
—

 
(13,082
)
Other income
 
(1,065
)
 
(637
)
 
(4,598
)
 
—

 
(201
)
 
(591
)
 
(7,092
)
Sold / held for sale
 
(3,921
)
 
(266
)
 
(419
)
 
—

 
(8,118
)
 
—

 
(12,724
)
Developments / land
 
510

 
—

 
35

 
—

 
—

 
—

 
545

Non In-Place NOI(4)
 
(3,812
)
 
(4,521
)
 
(2,257
)
 
(7,216
)
 
(4,086
)
 
—

 
(21,892
)
Timing adjustments(5)
 
(2,147
)
 
3,234

 
4,406

 
—

 
(394
)
 
—

 
5,099

Total adjustments
 
(10,592
)
 
(7,939
)
 
(3,003
)
 
(7,216
)
 
(19,805
)
 
(591
)
 
(49,146
)
In-Place NOI
 
241,352

 
102,857

 
91,705

 
35,800

 
51,331

 
—

 
523,045

Annualized In-Place NOI
 
$
965,408


$
411,428


$
366,820


$
143,200


$
205,324

 
$
—

 
$
2,092,180

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Same Store Property Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
Seniors Housing Operating
 
Seniors Housing
Triple-net
 
Outpatient Medical
 
Health System
 
Long-Term
/Post-Acute Care
 
Total
Total properties
 
568

 
361

 
287

 
218

 
187

 
1,621

Recent acquisitions/ development conversions
 
(20
)
 
(3
)
 
(37
)
 
(218
)
 
(14
)
 
(292
)
Under development/redevelopment
 
(20
)
 
(3
)
 
(4
)
 
—

 
(1
)
 
(28
)
Current held for sale
 
(14
)
 
(5
)
 
(2
)
 
—

 
(35
)
 
(56
)
Land parcels, loans and sub-leases
 
(7
)
 
(17
)
 
(11
)
 
—

 
(7
)
 
(42
)
Transitions
 
(33
)
 
(37
)
 
—

 
—

 
(6
)
 
(76
)
Other(6)
 
(1
)
 
—

 
—

 
—

 
—

 
(1
)
Same store properties
 
473

 
296

 
233

 
—

 
124

 
1,126

Notes:
(1) Represents Welltower's interests in joint ventures where Welltower is the minority partner.
(2) Represents minority partners' interests in joint ventures where Welltower is the majority partner.
(3) Represents Welltower's pro rata share of NOI. See page 16 for more information.
(4) Primarily represents non-cash NOI.
(5) Represents timing adjustments for current quarter acquisitions, construction conversions and segment transitions.
(6) Includes 1 flooded property.


22
Supplemental Reporting Measures
 

(dollars in thousands at Welltower pro rata ownership)













Same Store NOI Reconciliation

4Q17

1Q18

2Q18

3Q18

4Q18
Y/o/Y
Seniors Housing Operating











NOI

$
223,232


$
221,521


$
235,028


$
263,529


$
251,944


Non-cash NOI on same store properties

(875
)

(1,083
)

(923
)

(969
)

(568
)

NOI attributable to non-same store properties

(16,393
)

(16,289
)

(25,413
)

(39,149
)

(31,503
)

Currency and ownership adjustments(1)

932


(36
)

1,145


2,356


3,002


SH-NNN to SHO conversions(2)

15,413


15,539


14,891


—


—


Other normalizing adjustments(3)

3


122


(392
)

345


795


SSNOI

222,312


219,774


224,336


226,112


223,670

0.6
%












Seniors Housing Triple-net











NOI

153,905


151,307


158,242


110,420


110,796


Non-cash NOI on same store properties

(4,821
)

(5,856
)

(2,366
)

(2,727
)

(2,768
)

NOI attributable to non-same store properties

(60,452
)

(54,697
)

(64,057
)

(15,916
)

(16,329
)

Currency and ownership adjustments(1)

312


(518
)

(61
)

686


928


Normalizing adjustment for lease restructuring(4)

(1,133
)

(1,214
)

(1,228
)

(1,229
)

(522
)

Other normalizing adjustments(3)

128


(126
)

(983
)

(633
)

(421
)

SSNOI

87,939


88,896


89,547


90,601


91,684

4.3
%












Outpatient Medical











NOI

92,395


85,952


86,747


87,820


94,708


Non-cash NOI on same store properties

(2,619
)

(1,345
)

(1,556
)

(1,389
)

(5,397
)

NOI attributable to non-same store properties

(7,957
)

(1,913
)

(2,922
)

(3,957
)

(6,461
)

Currency and ownership adjustments(1)

(88
)

(244
)

(70
)

174


246


Other normalizing adjustments(3)

(159
)

(47
)

169


(264
)

(89
)

SSNOI

81,572


82,403


82,368


82,384


83,007

1.8
%












Health System











NOI

—


—


—


30,602


43,016


NOI attributable to non-same store properties

—


—


—


(30,602
)

(43,016
)

SSNOI

—


—


—


—


—















Long-Term/Post-Acute Care











NOI

78,353


71,811


67,529


71,314


71,136


Non-cash NOI on same store properties

(1,069
)

(3,993
)

(3,453
)

(3,455
)

(3,286
)

NOI attributable to non-same store properties

(29,296
)

(23,679
)

(19,416
)

(23,030
)

(23,355
)

Currency and ownership adjustments(1)

28


19


55


76


94


Normalizing adjustments for lease restructuring(5)

(4,343
)

—


—


—


—


Other normalizing adjustments(3)

384


—


—


(79
)

79


SSNOI

44,057


44,158


44,715


44,826


44,668

1.4
%












Corporate











NOI

247


246


378


572


591


NOI attributable to non-same store properties

(247
)

(246
)

(378
)

(572
)

(591
)

SSNOI

—


—


—


—


—














Total











NOI

548,132


530,837


547,924


564,257


572,191


Non-cash NOI on same store properties

(9,384
)

(12,277
)

(8,298
)

(8,540
)

(12,019
)

NOI attributable to non-same store properties

(114,345
)

(96,824
)

(112,186
)

(113,226
)

(121,255
)

Currency and ownership adjustments

1,184


(779
)

1,069


3,292


4,270


Normalizing adjustments, net

10,293


14,274


12,457


(1,860
)

(158
)

SSNOI

$
435,880


$
435,231


$
440,966


$
443,923


$
443,029

1.6
%












Notes:
(1) Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.25 and to translate UK properties at a GBP/USD rate of 1.35.
(2) Represents the performance of certain properties that were converted from Seniors Housing Triple-net to Seniors Housing Operating with the same operator. Amounts represent unaudited operating results provided by the operator and were not a component of WELL earnings.
(3) Represents aggregate normalizing adjustments which are individually less than 0.50% of SSNOI growth per property type.
(4) Represents adjustments to reflect the in place economics related to the lease restructuring for two Seniors Housing Triple-net master leases.
(5) Represents adjustments to reflect the in place economics related to the lease restructuring for one Long-Term/Post-Acute Care master lease.

23
Supplemental Reporting Measures
 

(dollars in thousands, except REVPOR, SS REVPOR and SSNOI/unit)







SHO REVPOR Reconciliation

United States

United Kingdom

Canada

Total
Consolidated SHO revenues

$
666,566


$
80,470


$
114,579


$
861,615

Unconsolidated SHO revenues attributable to Welltower(1)

23,519


—


20,422


43,941

SHO revenues attributable to noncontrolling interests(2)

(39,058
)

(6,568
)

(25,574
)

(71,200
)
Pro rata SHO revenues(3)

651,027


73,902


109,427


834,356

SHO interest and other income

(887
)

(31
)

(304
)

(1,222
)
SHO revenues attributable to held for sale properties

(20,203
)

(1,224
)

—


(21,427
)
Currency and ownership adjustments(4)

—


3,592


6,235


9,827

SHO local revenues

629,937


76,239


115,358


821,534

Average occupied units/month

30,701


2,909


13,244


46,854

REVPOR/month in USD

$
6,784


$
8,663


$
2,880


$
5,797

REVPOR/month in local currency(4)



£
6,417


C$
3,600



Reconciliations of SHO SS REVPOR Growth, SSNOI Growth and SSNOI/Unit
 
 
 
 
 
 
 
 

United States

United Kingdom

Canada

Total

4Q17

4Q18

4Q17

4Q18

4Q17

4Q18

4Q17

4Q18
SHO SS REVPOR Growth















Consolidated SHO revenues
$
544,735


$
666,566


$
75,745


$
80,470


$
110,308


$
114,579


$
730,788


$
861,615

Unconsolidated SHO revenues attributable to WELL(1)
21,787


23,519


—


—


21,018


20,422


42,805


43,941

SHO revenues attributable to noncontrolling interests(2)
(41,809
)

(39,058
)

(5,185
)

(6,568
)

(25,934
)

(25,574
)

(72,928
)

(71,200
)
SHO pro rata revenues(3)
524,713


651,027


70,560


73,902


105,392


109,427


700,665


834,356

Non-cash revenues on same store properties
(85
)

(59
)

(19
)

(19
)

—


—


(104
)

(78
)
Revenues attributable to non-same store properties
(49,609
)

(116,070
)

(14,864
)

(15,962
)

(2,672
)

(9,130
)

(67,145
)

(141,162
)
Currency and ownership adjustments(4)
36


—


959


2,862


1,703


5,732


2,698


8,594

SH-NNN to SHO conversions (5)
48,017


—


—


—


—


—


48,017


—

Other normalizing adjustments(6)
611


730


(1,351
)

(411
)

—


—


(740
)

319

SHO SS revenues(7)
523,683


535,628


55,285


60,372


104,423


106,029


683,391


702,029

Avg. occupied units/month(8)
24,637


24,696


2,218


2,381


11,824


11,799


38,679


38,876

SHO SS REVPOR(9)
$
7,028


$
7,171


$
8,241


$
8,383


$
2,920


$
2,971


$
5,841


$
5,970

SS REVPOR YOY growth
—
%

2.0
 %

—
%

1.7
%

—
%

1.7
%

—


2.2
%
























SHO SSNOI Growth























Consolidated SHO NOI
$
165,437


$
191,493


$
19,447


$
20,032


$
41,624


$
42,920


$
226,508


$
254,445

Unconsolidated SHO NOI attributable to WELL(1)
7,892


8,412


—


—


8,165


8,054


16,057


16,466

SHO NOI attributable to noncontrolling interests(2)
(9,231
)

(8,360
)

(209
)

(958
)

(9,893
)

(9,649
)

(19,333
)

(18,967
)
SHO pro rata NOI(3)
164,098


191,545


19,238


19,074


39,896


41,325


223,232


251,944

Non-cash NOI on same store properties
(856
)

(549
)

(19
)

(19
)

—


—


(875
)

(568
)
NOI attributable to non-same store properties
(12,348
)

(25,657
)

(3,507
)

(2,804
)

(538
)

(3,042
)

(16,393
)

(31,503
)
Currency and ownership adjustments(4)
3


—


279


806


650


2,196


932


3,002

SH-NNN to SHO conversions(5)
15,413


—


—


—


—


—


15,413


—

Other normalizing adjustments(6)
600


1,230


(597
)

(411
)

—


(24
)

3


795

SHO pro rata SSNOI(7)
$
166,910


$
166,569


$
15,394


$
16,646


$
40,008


$
40,455


$
222,312


$
223,670

SHO SSNOI growth



(0.2
)%




8.1
%




1.1
%




0.6
%
















SHO SSNOI/Unit















Trailing four quarters' SSNOI(7)


$
668,829




$
64,803




$
160,260




$
893,892

Average units in service(10)


28,297




2,829




13,073




44,199

SSNOI/unit in USD


$
23,636




$
22,907




$
12,259




$
20,224

SSNOI/unit in local currency(4)






£
16,968




C$
15,324





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
(1) Represents Welltower's interests in joint ventures where Welltower is the minority partner.
(2) Represents minority partners' interests in joint ventures where Welltower is the majority partner.
(3) Represents SHO revenues/NOI at Welltower pro rata ownership. See pages 16 & 23 for more information.
(4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.25 and to translate UK properties at a GBP/USD rate of 1.35.
(5) Represents the revenues and NOI of certain properties that were converted from Seniors Housing Triple-net to Seniors Housing Operating with the same operator. Amounts derived from unaudited operating results provided by the operator and were not a component of WELL earnings.
(6) Represents aggregate normalizing adjustments which are individually less than .50% of SSNOI growth.
(7) Represents SS SHO revenues/SSNOI at Welltower pro rata ownership. See page 23 for more information.
(8) Represents average occupied units for SS properties related solely to referenced country on a pro rata basis.
(9) Represents pro rata SS average revenues generated per occupied room per month.
(10) Represents average units in service for SS properties related solely to referenced country on a pro rata basis.

24
Forward-Looking Statement and Risk Factors
 

Forward-Looking Statements and Risk Factors
This document contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. In particular, these forward-looking statements include, but are not limited to, those relating to the company’s opportunities to acquire, develop or sell properties; the company’s ability to close its anticipated acquisitions, investments or dispositions on currently anticipated terms, or within currently anticipated timeframes; the expected performance of the company’s operators/tenants and properties; the company’s expected occupancy rates; the company’s ability to declare and to make distributions to shareholders; the company’s investment and financing opportunities and plans; the company’s continued qualification as a real estate investment trust (“REIT”); the company’s ability to access capital markets or other sources of funds; and the company’s ability to meet its earnings guidance. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the company’s actual results to differ materially from the company’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; the company’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting the company’s properties; the company’s ability to re-lease space at similar rates as vacancies occur; the company’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 the company’s properties; changes in rules or practices governing the company’s financial reporting; the movement of U.S. and foreign currency exchange rates; the company’s ability to maintain its qualification as a REIT; key management personnel recruitment and retention; and other risks described in the company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”). Finally, the company 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.
Additional Information
The information in this supplemental information package should be read in conjunction with the company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, earnings press release dated February 12, 2019 and other information filed with, or furnished to, the SEC.  The Supplemental Reporting Measures and reconciliations of Non-GAAP measures are an integral part of the information presented herein.
You can access the company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act at www.welltower.com as soon as reasonably practicable after they are filed with, or furnished to, the SEC.  You can also review these SEC filings and other information by accessing the SEC’s website at http://www.sec.gov.  The company also routinely posts important information on its website at www.welltower.com in the “Investors” section, including corporate and investor presentations and financial information.  The company intends to use its website as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD. Such disclosures will be included on its website under the heading “Investors.”  Accordingly, investors should monitor such portion of the company’s website in addition to following its press releases, public conference calls and filings with the SEC.  The information on or connected to the company’s website is not, and shall not be deemed to be, a part of, or incorporated into this supplemental information package.
About Welltower
Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a REIT, owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. More information is available at www.welltower.com.

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