Document

EX-99.2 3 a2q20supplement992.htm EX-99.2 Document


Table of Contents


Overview			1

Portfolio			2

Investment			9

Financial			15

Glossary			20

Supplemental Reporting Measures			21

Forward Looking Statements and Risk Factors			25


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	17	612	72,485		34,739		26,034	11,172	540
Seniors Housing Triple-net	14	340	27,659		4,878		16,252	6,225	304
Outpatient Medical	15	383	22,890,460	(1)	n/a		n/a	n/a	n/a
Health System	31	215	25,943		201		663	3,089	21,990
Long-Term/Post-Acute Care	19	137	16,081		40		873	—	15,168
Total	17	1,687


NOI Performance		Same Store⁽²⁾																In-Place Portfolio⁽³⁾
	Properties		2Q19 NOI			2Q20 NOI	% Change				Properties		Annualized In-Place NOI	% of Total
Seniors Housing Operating		497		$	215,479		$	162,605	(24.5)	%		572		$	669,332	36.2	%
Seniors Housing Triple-net⁽⁴⁾		302		92,078			93,411		1.4	%		324		401,644		21.7	%
Outpatient Medical		246		77,236			78,649		1.8	%		361		455,304		24.6	%
Health System		215		35,315			35,800		1.4	%		215		143,200		7.7	%
Long-Term/Post-Acute Care⁽⁴⁾		124		42,272			43,146		2.1	%		135		179,800		9.8	%
Total		1,384		$	462,380		$	413,611	(10.5)	%		1,607		$	1,849,280	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	82.9	%	n/a	n/a	97.4	%	0.8	%		0.3	%	1.5	%
Seniors Housing Triple-net	85.6	%	1.04	1.20	92.5	%	3.4	%		0.5	%	3.6	%
Outpatient Medical	94.1	%	n/a	n/a	99.5	%	—			—		0.5	%
Health System⁽⁸⁾	83.8	%	2.13	2.75	36.9	%	42.2	%		20.9	%	—
Long-Term/Post-Acute Care	84.0	%	1.13	1.43	28.3	%	41.7	%		30.0	%	—
Total			1.29	1.59	92.3	%	4.1	%		2.2	%	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 cash rent excluding the impact of expansions.

(5) Data as of June 30, 2020 for Seniors Housing Operating and Outpatient Medical and March 31, 2020 for remaining asset types.

(6) Represents trailing twelve month coverage metrics.

(7) Represents various federal and local reimbursement programs in the United Kingdom and Canada.

(8) EBITDAR and EBITDARM coverage as reported by ProMedica inclusive of the three properties disposed of during the quarter ended March 31, 2020.


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	127	$	153,083	$	—	$	—	$	—	$	—	$	153,083	8.3	%
Sunrise Senior Living United Kingdom	45	31,663		—		—		—		—		31,663		1.7	%
ProMedica	215	—		—		—		143,200		—		143,200		7.7	%
Genesis Healthcare	79	—		1,481		—		—		86,436		87,917		4.8	%
Revera	94	73,163		—		—		—		—		73,163		4.0	%
Avery Healthcare	54	5,763		59,829		—		—		—		65,592		3.5	%
Sagora Senior Living	31	36,620		25,814		—		—		—		62,434		3.4	%
Belmont Village	21	62,234		—		—		—		—		62,234		3.4	%
Brookdale Senior Living⁽²⁾	87	2,395		59,384		—		—		—		61,779		3.3	%
Senior Resource Group	24	49,406		—		—		—		—		49,406		2.7	%
Legend Senior Living	33	—		45,857		—		—		1,066		46,923		2.5	%
Remaining	797	255,005		209,279		455,304		—		92,298		1,011,886		54.7	%
Total	1,607	$	669,332	$	401,644	$	455,304	$	143,200	$	179,800	$	1,849,280	100.0	%

By Country:
United States	1,341	$	509,847	$	315,128	$	435,229	$	143,200	$	173,508	$	1,576,912	85.2	%
United Kingdom	117	38,304		83,300		20,075		—		—		141,679		7.7	%
Canada	149	121,181		3,216		—		—		6,292		130,689		7.1	%
Total	1,607	$	669,332	$	401,644	$	455,304	$	143,200	$	179,800	$	1,849,280	100.0	%

By MSA:
Los Angeles	68	$	68,590	$	18,144	$	35,245	$	422	$	—	$	122,401	6.6	%
New York	79	42,452		25,427		28,850		3,512		12,096		112,337		6.1	%
Greater London	51	29,682		34,974		20,075		—		—		84,731		4.6	%
Dallas	56	27,600		19,024		33,021		740		3,927		84,312		4.6	%
Philadelphia	51	9,549		1,125		24,043		12,134		23,515		70,366		3.8	%
Houston	32	12,190		4,469		31,902		—		—		48,561		2.6	%
Washington D.C.	38	28,585		822		6,428		9,733		2,653		48,221		2.6	%
San Francisco	20	28,256		9,830		—		4,268		—		42,354		2.3	%
Seattle	31	20,376		3,063		15,080		1,586		—		40,105		2.2	%
San Diego	19	21,777		6,251		6,754		—		2,697		37,479		2.0	%
Minneapolis	20	1,098		14,815		15,516		—		—		31,429		1.7	%
Chicago	40	9,351		7,126		5,077		9,538		—		31,092		1.7	%
Toronto	25	30,434		—		—		—		—		30,434		1.6	%
Miami	34	1,827		—		21,224		5,078		—		28,129		1.5	%
Montréal	20	27,281		—		—		—		—		27,281		1.5	%
Raleigh	12	6,514		17,142		899		—		—		24,555		1.3	%
Charlotte	22	—		8,755		14,258		—		—		23,013		1.2	%
Pittsburgh	23	6,407		6,377		3,345		5,889		—		22,018		1.2	%
Denver	11	8,115		4,641		1,855		2,002		5,079		21,692		1.2	%
Atlanta	23	2,212		—		17,193		1,759		—		21,164		1.1	%
Remaining	932	287,036		219,659		174,539		86,539		129,833		897,606		48.6	%
Total	1,607	$	669,332	$	401,644	$	455,304	$	143,200	$	179,800	$	1,849,280	100.0	%

Notes:

(1) Represents current quarter annualized In-Place NOI. See page 22 for reconciliation.

(2) Includes 3 Seniors Housing Operating properties to be transitioned to other operators as previously announced.


Portfolio


(dollars in thousands at Welltower pro rata ownership)
Seniors Housing Operating

Total Portfolio Performance⁽¹⁾				2Q19				3Q19				4Q19				1Q20				2Q20
Properties	619				566				578				586				578
Units	74,145				68,918				70,144				71,710				69,434
Total occupancy	85.7		%		86.0		%		86.1		%		85.3		%		81.4		%
Total revenues	$	880,320			$	805,251			$	804,403			$	821,990			$	752,586
Operating expenses	607,836				554,782				564,895				582,533				573,042
NOI	$	272,484			$	250,469			$	239,508			$	239,457			$	179,544
NOI margin	31.0		%		31.1		%		29.8		%		29.1		%		23.9		%
Recurring cap-ex	$	20,275			$	27,306			$	38,756			$	15,414			$	11,042
Other cap-ex	$	30,320			$	40,117			$	55,536			$	36,751			$	26,445


Same Store Performance⁽²⁾				2Q19				3Q19				4Q19				1Q20				2Q20
Properties	497				497				497				497				497
Occupancy	86.4		%		86.9		%		87.3		%		86.8		%		82.7		%
Same store revenues	$	683,150			$	693,632			$	696,636			$	701,533			$	651,467
Compensation	289,182				295,002				296,126				298,221				292,246
Utilities	23,323				26,373				26,574				27,798				23,812
Food	24,945				26,145				26,356				26,036				24,392
Repairs and maintenance				16,606				17,402				17,488				16,245				12,745
Property taxes	22,918				22,232				22,871				24,314				24,234
All other	90,697				87,884				92,999				96,700				111,433
Same store operating expenses				467,671				475,038				482,414				489,314				488,862
Same store NOI	$	215,479			$	218,594			$	214,222			$	212,219			$	162,605
Year over year growth rate																	(24.5)		%


Partners	Properties⁽³⁾	Units⁽³⁾	Welltower Ownership %⁽⁴⁾		Core Markets	2Q20 NOI		% of Total
Sunrise Senior Living	172	14,629	99.5	%	Southern California	$	25,852	14.4	%
Revera	94	11,823	75.0	%	Northern California	17,081		9.5	%
Belmont Village	21	2,952	95.0	%	New York / New Jersey	10,661		5.9	%
Senior Resource Group	24	4,656	65.7	%	Washington D.C.	9,052		5.0	%
Brandywine Living	27	2,588	99.5	%	Toronto	7,574		4.2	%
Sagora Senior Living	14	2,697	100.0	%	Greater London	7,425		4.1	%
Chartwell Retirement Residences	40	8,071	51.0	%	Montréal	6,910		3.8	%
Pegasus Senior Living	35	3,812	98.0	%	Seattle	5,049		2.8	%
Cogir	18	3,268	88.8	%	Boston	4,163		2.3	%
Clover Management	32	3,892	89.8	%	Ottawa	2,684		1.5	%
Merrill Gardens	11	1,508	80.0	%	Vancouver	1,694		0.9	%
Oakmont Senior Living	8	623	100.0	%	Manchester, UK	958		0.5	%
Frontier Management	28	1,579	96.0	%	Birmingham, UK	799		0.4	%
Balfour Senior Living	6	637	95.0	%	Core Markets	99,902		55.3	%
Remaining	42	6,193			All Other	79,642		44.7	%
Total	572	68,928			Total	$	179,544	100.0	%

Notes:

(1) Properties, units and occupancy exclude land parcels and properties under development.

(2) See pages 22 and 23 for reconciliation.

(3) Represents In-Place Portfolio.

(4) Welltower ownership percentage weighted based on In-Place NOI. See page 22 for reconciliation.


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 2.5% 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	31 / 3,676	$	68,590	13.5	%	6 / 753	5 / 413	$	10,169		2.6	%	12.4	%	6,868		$	98,785	$	1,016,142	1.6		%			(13.8)	%
New York	31 / 2,668	42,452		8.3	%	3 / 349	4 / 339	2,588			0.4	%	5.8	%	4,037		114,116		542,462		3.4		%			(18.1)	%
Washington D.C.	12 / 1,358	28,585		5.6	%	4 / 457	4 / 342	3,517			3.7	%	13.9	%	5,554		133,093		697,607		6.3		%			(8.5)	%
San Francisco	13 / 1,623	28,256		5.5	%	—	—	—			4.0	%	13.0	%	9,068		129,691		1,142,457		(0.3)		%			(14.1)	%
Dallas	15 / 2,278	27,600		5.4	%	1 / 83	1 / 52	191			7.5	%	30.4	%	3,376		84,364		318,012		2.6		%			(6.0)	%
San Diego	9 / 1,150	21,777		4.3	%	—	—	—			3.3	%	17.0	%	5,020		109,274		893,482		(0.1)		%			(13.0)	%
Seattle	17 / 1,987	20,376		4.0	%	3 / 307	5 / 680	3,299			6.3	%	21.7	%	5,195		99,519		628,391		1.0		%			(11.8)	%
San Jose	6 / 735	15,404		3.0	%	—	—	—			4.3	%	14.1	%	6,386		132,387		1,361,403		(1.1)		%			(11.0)	%
Boston	11 / 751	13,203		2.6	%	—	—	—			3.3	%	8.4	%	2,613		142,292		818,482		2.4		%			(16.2)	%
Houston	9 / 879	12,190		2.4	%	2 / 414	3 / 448	2,459			7.3	%	27.4	%	3,637		84,930		391,890		6.0		%			(7.2)	%
San Antonio	4 / 1,075	11,556		2.3	%	1 / 112	1 / 162	1,149			8.8	%	30.5	%	2,370		74,756		262,347		1.0		%			(6.4)	%
Sacramento	7 / 598	10,751		2.1	%	2 / 509	2 / 172	3,252			4.1	%	14.4	%	3,697		90,432		517,012		8.9		%			(11.5)	%
Philadelphia	11 / 885	9,549		1.9	%	1 / 250	1 / 76	397			0.9	%	5.0	%	2,143		110,111		385,225		1.9		%			(13.9)	%
Chicago	16 / 1,724	9,351		1.8	%	2 / 188	3 / 257	1,335			-0.1	%	10.3	%	3,416		84,162		317,837		1.2					(12.1)	%
Boulder, CO	6 / 518	8,688		1.7	%	—	—	—			6.0	%	31.4	%	2,029		104,635		673,633		N/A					(6.2)	%
Buffalo	10 / 1,254	8,136		1.6	%	—	—	—			0.4	%	3.5	%	2,799		69,937		181,006		5.3		%			(18.8)	%
Denver	4 / 661	8,115		1.6	%	4 / 594	1 / 163	1,523			7.0	%	25.3	%	5,056		80,541		556,077		2.5		%			(8.8)	%
Charlottesville, VA	1 / 302	7,258		1.4	%	—	—	—			3.7	%	10.6	%	2,123		57,071		350,000		N/A					(8.1)	%
Phoenix	7 / 767	7,002		1.4	%	2 / 309	2 / 167	1,631			6.7	%	13.6	%	3,659		79,560		393,136		1.8					(5.1)	%
Santa Rosa, CA	4 / 511	6,979		1.4	%	—	—	—			2.1	%	8.1	%	2,060		87,287		757,926		N/A					(12.7)	%
Raleigh	2 / 250	6,514		1.3	%	1 / 152	1 / 74	1,793			6.5	%	26.1	%	3,148		91,484		310,640		2.8		%			(12.5)	%
Santa Maria, CA	2 / 605	6,479		1.3	%	—	—	—			3.1	%	6.8	%	2,807		102,312		735,281		N/A					(15.1)	%
Las Vegas	5 / 788	6,458		1.3	%	—	—	—			5.9	%	17.6	%	5,889		58,066		271,653		(0.1)		%			(21.3)	%
Pittsburgh	4 / 434	6,407		1.3	%	1 / 179	1 / 101	2,158			0.2	%	6.6	%	1,899		90,075		238,956		1.8					(14.6)	%
Trenton, NJ	2 / 207	6,096		1.2	%	1 / 120	1 / 112	2,847			2.2	%	9.9	%	819		136,998		495,351		N/A					(11.7)	%
Total - Top 25	239 / 27,684	$	397,772	78.0	%	34 / 4,776	35 / 3,558	$	38,308		3.4	%	14.3	%	4,478		$	103,605	$	687,065	2.1		%			(12.3)	%
All Other US SHO Markets	136 / 15,372	112,075		22.0	%	14 / 1,744	13 / 1,486	7,974			3.5	%	13.4	%	2,373		78,610		342,490
Total US SHO	375 / 43,056	$	509,847	100.0	%	48 / 6,520	48 / 5,044	$	46,282		3.5	%	14.0	%	3,725		$	97,465	$	602,418

% of Total IPNOI								2.5		%
US National Average													3.3	%	11.7	%	94		$	66,010	$	245,219		2.3	%	⁽¹⁰⁾		(11.7)	%

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 2020-2025.

(6) Average population density data represents average population per square mile within a 3-mile ring based on 2020 Claritas estimates.

(7) Household income and household value data are medians weighted by IPNOI.

(8) NIC MAP Data and Analysis Service, 2Q20. 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 May 2019 - May 2020 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.


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 5.0% 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	31 / 3,676	$	68,590	13.5	%	8 / 1,004	13 / 1,422	$	18,988	2.6	%	13.0	%	6,666		$	92,019	$	932,979	1.6		%			(13.8)	%
New York	31 / 2,668	42,452		8.3	%	7 / 839	10 / 796	7,463		0.5	%	5.7	%	3,956		108,727		506,556		3.4		%			(18.1)	%
Washington D.C.	12 / 1,358	28,585		5.6	%	7 / 1,010	10 / 1,139	5,953		4.1	%	14.6	%	5,489		126,706		681,126		6.3		%			(8.5)	%
San Francisco	13 / 1,623	28,256		5.5	%	1 / 79	1 / 171	442		4.0	%	13.2	%	7,723		127,655		1,123,685		(0.3)		%			(14.1)	%
Dallas	15 / 2,278	27,600		5.4	%	4 / 850	3 / 286	2,605		7.4	%	29.2	%	3,207		78,124		307,197		2.6		%			(6.0)	%
San Diego	9 / 1,150	21,777		4.3	%	1 / 200	2 / 249	3,263		3.5	%	15.8	%	4,895		107,308		830,659		(0.1)		%			(13.0)	%
Seattle	17 / 1,987	20,376		4.0	%	3 / 307	5 / 680	3,335		6.4	%	22.8	%	4,775		98,901		623,994		1.0		%			(11.8)	%
San Jose	6 / 735	15,404		3.0	%	1 / 200	1 / 95	1,108		4.3	%	14.0	%	5,477		131,385		1,351,291		(1.1)		%			(11.0)	%
Boston	11 / 751	13,203		2.6	%	3 / 362	3 / 261	2,355		3.3	%	8.4	%	2,551		125,746		712,118		2.4		%			(16.2)	%
Houston	9 / 879	12,190		2.4	%	3 / 594	3 / 448	4,330		7.5	%	30.5	%	3,689		81,726		308,546		6.0		%			(7.2)	%
San Antonio	4 / 1,075	11,556		2.3	%	1 / 112	1 / 162	1,149		8.6	%	29.4	%	2,254		70,244		246,001		1.0		%			(6.4)	%
Sacramento	7 / 598	10,751		2.1	%	6 / 916	4 / 367	4,502		4.0	%	15.0	%	3,464		88,703		485,663		8.9		%			(11.5)	%
Philadelphia	11 / 885	9,549		1.9	%	2 / 446	2 / 146	1,638		1.0	%	5.4	%	2,330		100,713		345,834		1.9		%			(13.9)	%
Chicago	16 / 1,724	9,351		1.8	%	6 / 690	7 / 701	4,754		-0.2	%	11.0	%	3,283		89,596		328,805		1.2					(12.1)	%
Boulder, CO	6 / 518	8,688		1.7	%	—	—	—		6.4	%	28.7	%	1,406		110,687		662,146		N/A					(6.2)	%
Buffalo	10 / 1,254	8,136		1.6	%	—	—	—		0.2	%	3.5	%	2,522		66,636		172,721		5.3		%			(18.8)	%
Denver	4 / 661	8,115		1.6	%	4 / 594	3 / 455	3,595		6.7	%	25.0	%	4,589		81,078		487,638		2.5		%			(8.8)	%
Charlottesville, VA	1 / 302	7,258		1.4	%	—	—	—		4.9	%	13.9	%	1,500		73,864		354,630		N/A					(8.1)	%
Phoenix	7 / 767	7,002		1.4	%	5 / 675	3 / 286	2,151		7.1	%	15.1	%	3,463		77,668		362,754		1.8					(5.1)	%
Santa Rosa, CA	4 / 511	6,979		1.4	%	—	—	—		2.3	%	9.2	%	1,144		89,918		764,168		N/A					(12.7)	%
Raleigh	2 / 250	6,514		1.3	%	1 / 152	2 / 250	4,052		7.6	%	32.7	%	2,640		98,711		363,419		2.8		%			(12.5)	%
Santa Maria, CA	2 / 605	6,479		1.3	%	—	—	—		3.8	%	7.9	%	1,667		93,577		772,480		N/A					(15.1)	%
Las Vegas	5 / 788	6,458		1.3	%	1 / 62	1 / 80	277		6.3	%	19.7	%	5,575		56,183		267,480		(0.1)		%			(21.3)	%
Pittsburgh	4 / 434	6,407		1.3	%	2 / 306	2 / 174	3,638		0.6	%	5.7	%	1,730		84,775		224,178		1.8					(14.6)	%
Trenton, NJ	2 / 207	6,096		1.2	%	2 / 218	1 / 112	2,847		1.4	%	9.8	%	1,079		126,215		457,974		N/A					(11.7)	%
Total - Top 25	239 / 27,684	$	397,772	78.0	%	68 / 9,616	77 / 8,280	$	78,445	3.5	%	14.6	%	4,211		$	99,815	$	651,907	2.1		%			(12.3)	%
All Other US SHO Markets	136 / 15,372	112,075		22.0	%	26 / 3,319	24 / 2,589	14,672		3.4	%	13.6	%	2,048		73,800		327,340
Total US SHO	375 / 43,056	$	509,847	100.0	%	94 / 12,935	101 / 10,869	$	93,117	3.5	%	14.3	%	3,437		$	93,424	$	572,176

% of Total IPNOI										5.0	%
US National Average												3.3	%	11.7	%	94		$	66,010	$	245,219		2.3	%	⁽¹⁰⁾		(11.7)	%

Notes:

(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 2020-2025.

(6) Average population density data represents average population per square mile within a 5-mile ring based on 2020 Claritas estimates.

(7) Household income and household value data are medians weighted by IPNOI.

(9) Annual job growth data represents MSA level growth from May 2019 - May 2020 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.


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			21
5 year total population growth	3.5		%	3.3		%
5 year 75+ population growth	14.0		%	11.7		%
Housing value	$	602,418		$	245,219
Household income	$	97,465		$	66,010
REVPOR	$	6,229		$	5,072
SS REVPOR growth	(0.5)		%	1.9		%
SSNOI per unit	$	18,472		$	18,307
SSNOI growth	(24.5)		%	DNA

	UK Portfolio^(1,3,4)			Industry Benchmarks⁽⁵⁾
Property age	12			21
Units per property	80			41
5 year total population growth	3.1		%	2.7		%
5 year 75+ population growth	16.9		%	18.4		%
Housing value	£	408,687		£	229,352
REVPOR	£	6,756		£	3,720
SS REVPOR growth	4.4		%	3.3		%
SSNOI per unit	£	15,404		£	9,544
SSNOI growth	(38.4)		%	DNA

	Canadian Portfolio^(1,3,4)			Industry Benchmarks⁽⁶⁾
5 year total population growth	5.6		%	5.5		%
5 year 75+ population growth	19.0		%	22.2		%
Housing value	C$	551,834		C$	456,053
Household income	C$	111,057		C$	102,231
REVPOR	C$	3,688		C$	2,469
SS REVPOR growth	0.7		%	3.4		%
SSNOI per unit	C$	13,771		DNA
SSNOI growth	(19.0)		%	DNA

Notes:

(1) Property age, housing value and household income are NOI weighted as of June 30, 2020. 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 2Q20 NIC MAP for Majority AL Properties in the primary and secondary markets; AMR is used as a proxy for REVPOR; population growth reflects 2020-2025 Claritas projections; housing value and household income are the US median per Claritas 2020; NOI per unit per The State of Seniors Housing 2019 and represents 2018 results.

(3) REVPOR is based on total 2Q20 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 1.30. SSNOI per unit for Canadian portfolio in CAD calculated by taking SSNOI per unit in USD divided by a standardized USD/CAD rate of 1.32. 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 29^th Edition; population growth reflects 2018-2023 Experian projections; housing value represents UK average per Experian 2019.

(6) Population growth reflects 2019-2024 Environics projection; housing value and household income represents Canadian average per Environics WealthScapes 2019; REVPOR and REVPOR growth are calculated weighted averages from 2019 CMHC Seniors Housing reports from each province.


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	2.1	%	0.2	%	2.3	%	6	6	3.0	%	0.2	%	3.2	%	6		9
0.85x - 0.95x	—	%	0.1	%	0.1	%	8	1	1.7	%	1.0	%	2.7	%	10		6
0.95x - 1.05x	2.3	%	—	%	2.3	%	10	5	3.2	%	—	%	3.2	%	11		2
1.05x - 1.15x	3.5	%	0.5	%	4.0	%	11	4	7.1	%	5.6	%	12.7	%	11		8
1.15x - 1.25x	0.6	%	0.5	%	1.1	%	13	3	2.2	%	0.4	%	2.6	%	8		3
1.25x - 1.35x	6.4	%	1.1	%	7.5	%	8	5	3.1	%	0.8	%	3.9	%	13		2
>1.35x	5.4	%	6.5	%	11.9	%	13	8	—	%	0.9	%	0.9	%	8		2
Total	20.3	%	8.9	%	29.2	%	10	32	20.3	%	8.9	%	29.2	%	10		32


Revenue and Lease Maturity⁽²⁾
	Rental Income
Year	Seniors Housing Triple-net		Outpatient Medical		Health System		Long-Term / Post-Acute Care		Interest Income		Total Revenues		% of Total
2020	$	—	$	23,368	$	—	$	—	$	9,373	$	32,741	2.5	%
2021	3,543		45,363		—		8,968		20,621		78,495		6.0	%
2022	625		53,499		—		5,783		20,108		80,015		6.1	%
2023	—		53,370		—		840		2,688		56,898		4.3	%
2024	11,262		60,297		—		—		1,141		72,700		5.6	%
2025	52,066		31,878		—		—		201		84,145		6.4	%
2026	87,223		33,054		—		16,800		3,805		140,882		10.8	%
2027	31,249		25,797		—		1,066		216		58,328		4.5	%
2028	6,918		23,864		—		19,913		170		50,865		3.9	%
2029	30,479		22,176		—		—		207		52,862		4.0	%
Thereafter	192,338		135,184		143,200		127,262		2,194		600,178		45.9	%
	$	415,703	$	507,850	$	143,200	$	180,632	$	60,724	$	1,308,109	100.0	%

Weighted Avg Maturity Years	10		6		13		11		2		9

Notes:

(1) Represents trailing twelve month coverage metrics as of March 31, 2020 for stable portfolio only. Agreements included represent 93% 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.


Portfolio


(dollars in thousands at Welltower pro rata ownership)
Outpatient Medical
Total Portfolio Performance⁽¹⁾	2Q19			3Q19			4Q19			1Q20			2Q20
Properties	340			348			378			388			373
Square feet	21,098,926			21,472,874			23,044,140			23,186,273			22,468,357
Occupancy	93.3		%	93.6		%	94.0		%	94.3		%	93.8		%
Total revenues	$	154,443		$	175,000		$	180,101		$	193,959		$	178,695
Operating expenses	47,894			57,272			55,915			58,533			50,855
NOI	$	106,549		$	117,728		$	124,186		$	135,426		$	127,840
NOI margin	69.0		%	67.3		%	69.0		%	69.8		%	71.5		%
Revenues per square foot	$	30.45		$	33.90		$	32.49		$	36.86		$	35.96
NOI per square foot	$	21.01		$	22.80		$	22.41		$	25.74		$	25.72
Recurring cap-ex	$	8,528		$	7,296		$	7,794		$	7,202		$	6,537
Other cap-ex	$	2,374		$	5,989		$	8,618		$	5,893		$	9,644


Same Store Performance⁽²⁾	2Q19			3Q19			4Q19			1Q20			2Q20
Properties	246			246			246			246			246
Occupancy	93.3		%	93.7		%	93.8		%	94.0		%	93.6		%
Same store revenues	$	111,875		$	115,484		$	115,341		$	114,462		$	112,586
Same store operating expenses	34,639			37,830			37,474			36,365			33,937
Same store NOI	$	77,236		$	77,654		$	77,867		$	78,097		$	78,649
Year over year growth rate													1.8		%


Portfolio Diversification by Tenant⁽³⁾	Rental Income		% of Total		Quality Indicators
Kelsey-Seybold	$	23,899	4.7	%	Health system affiliated properties as % of NOI⁽³⁾	93.2	%
NMC Health	20,011		3.9	%	Health system affiliated tenants as % of rental income⁽³⁾	65.8	%
Virtua	16,471		3.2	%	Retention (trailing twelve months)⁽³⁾	79.0	%
CommonSpirit Health	15,993		3.1	%	In-house managed properties as % of square feet^(3,4)	81.0	%
Novant Health	15,090		3.0	%	Average remaining lease term (years)⁽³⁾	6.5
Remaining portfolio	416,386		82.1	%	Average building size (square feet)⁽³⁾	59,622
Total	$	507,850	100.0	%	Average age (years)	15


Expirations⁽³⁾	2020		2021		2022		2023		2024		Thereafter
Occupied square feet	944,439		1,915,159		2,105,382		2,190,036		2,321,491		11,008,034
% of occupied square feet	4.6	%	9.3	%	10.3	%	10.7	%	11.3	%	53.8	%

Notes:

(1) Property count, occupancy, square feet and per square foot metrics exclude properties under development and all land parcels. Per square foot amounts are annualized.

(2) Includes 246 same store properties representing 15,615,741 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) Excludes tenant managed properties.


Investment

(dollars in thousands at Welltower pro rata ownership)

Relationship Investment History


Detail of Acquisitions/JVs⁽¹⁾
	2016					2017			2018			2019			1Q20			2Q20			16-20 Total
Count		22		18			15			27			4			1			87
Total		$	2,287,973	$	742,020		$	3,788,261		$	4,073,554		$	397,911		$	6,201		$	11,295,920
Low		10,618		7,310			4,950			7,550			28,420			6,201			4,950
Median		27,402		24,025			73,727			38,800			67,052			6,201			35,591
High		1,150,000		149,400			2,481,723			1,250,000			235,387			6,201			2,481,723


Investment Timing
	Acquisitions/Joint Ventures⁽²⁾		Yield		Loan Advances		Yield		Construction Conversions⁽³⁾		Yield		Dispositions					Yield
April	$	—	—	%	$	—	—	%	$	32,766	8.6	%		$	73,851	6.3	%
May	6,201		6.5	%	1,454		10.1	%	33,627		7.9	%		662,950		5.8	%
June	—		—	%	1,023		10.1	%	63,781		8.2	%		212,189		5.0	%
Total	$	6,201	6.5	%	$	2,477	10.1	%	$	130,174	8.2	%		$	948,990	5.7	%

Notes:

(1) Includes non-yielding asset acquisitions.

(2) Excludes land acquisitions.

(3) Includes expansion conversions.


Investment


(dollars in thousands at Welltower pro rata ownership, except per bed / unit / square foot)
Gross Investment Activity

	Second Quarter 2020
	Properties	Beds / Units / Square Feet				Pro Rata Amount		Investment Per Bed / Unit / SqFt		Yield
Acquisitions / Joint Ventures⁽¹⁾
Seniors Housing Operating	1	99	units	$	6,201		417,586	6.5	%




Total acquisitions	1			6,201				6.5	%

Development⁽²⁾
Development projects:
Seniors Housing Operating	24	3,132	units	68,525
Seniors Housing Triple-net	9	541	units	16,496
Outpatient Medical	5	509,271	sf	28,255


Total development projects	38			113,276
Expansion projects:
Seniors Housing Operating	3	114	units	1,659




Total development	41			114,935				7.6	%

Loan advances⁽³⁾				2,477				10.1	%
Total gross investments				123,613				7.6	%

Dispositions⁽⁴⁾
Seniors Housing Operating	13	3,131	units	498,510			245,164	5.6	%

Outpatient Medical	24	1,209,243	sf	450,480			391	5.8	%


Real property dispositions	37			948,990				5.7	%






Net investments (dispositions)				$	(825,377)

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. Pro rata amounts include joint venture real estate loans receivable.

(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. Pro rata amounts include joint venture real estate loans receivable.


Investment


(dollars in thousands, except per bed / unit / square foot, at Welltower pro rata ownership)
Gross Investment Activity

	Year-To-Date 2020
	Properties	Beds / Units / Square Feet				Pro Rata Amount		Investment Per Bed / Unit / SqFt		Yield
Acquisitions / Joint Ventures⁽¹⁾
Seniors Housing Operating	6	1,264	units	$	168,725		193,707	4.9	%

Outpatient Medical	16	505,012	sf	235,387			466	6.1	%


Total acquisitions	22			404,112				5.6	%

Development⁽²⁾
Development projects:
Seniors Housing Operating	27	3,442	units	136,604
Seniors Housing Triple-net	9	855	units	37,944
Outpatient Medical	6	564,271	sf	57,159


Total development projects	42			231,707
Expansion projects:
Seniors Housing Operating	4	212	units	23,790






Total development	46			255,497				7.7	%

Loan advances⁽³⁾				2,477				10.1	%

Total gross investments				662,086				6.4	%

Dispositions⁽⁴⁾
Seniors Housing Operating	13	3,131	units	498,510			245,164	5.6	%
Seniors Housing Triple-net	1	69	units	8,125			117,754	9.4	%
Outpatient Medical	55	3,410,353	sf	1,088,250			351	5.6	%
Health System	3	426	units	53,168			156,009	3.8	%
Long-Term/Post-Acute Care	1	123	beds	9,146			74,357	8.0	%
Real property dispositions	73			1,657,199				5.5	%

Loan payoffs				9,012				7.0	%
Total dispositions	73			1,666,211				5.5	%

Net investments (dispositions)				$	(1,004,125)

Notes:

(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.


Investment

Property Acquisitions/Joint Ventures Detail

Operator

Units

Location

MSA

Seniors Housing Operating

Senior Star Living

6480 Post Road

Dublin

Ohio

Columbus


Investment


(dollars in thousands at Welltower pro rata ownership)
Development Summary⁽¹⁾
		Unit Mix
	Facility	Total	Independent Living	Assisted Living		Memory Care	Commitment Amount		Balance at 6/30/20				Estimated Conversion

Seniors Housing Operating
	New York, NY	151	—	69		82	$	98,125	$	91,432			3Q20
	Newton, MA	85	—	43		42	15,393		7,796				3Q20
	Potomac, MD	120	—	90		30	55,302		37,824				4Q20
	Medina, OH	166	166	—		—	20,520		15,210				4Q20
	Collierville, TN	164	164	—		—	18,949		13,758				4Q20
	Staten Island, NY	95	—	45		50	21,590		9,300				1Q21
	Redwood City, CA	90	—	56		34	19,465		7,109				1Q21
	Fairfax, VA	84	—	51		33	16,658		5,388				1Q21
	Mountain Lakes, NJ	90	—	57		33	15,063		4,586				1Q21
	Franklin Lakes, NY	88	—	51		37	16,921		5,603				1Q21
	Scarborough, ON	172	141	—		31	32,247		13,388				2Q21
	Boynton Beach, FL	82	—	52		30	11,465		8,965				2Q21
	Bellevue, WA	110	—	110		—	9,518		2,796				2Q21
	Beckenham, UK	100	—	76		24	43,693		23,291				3Q21
	Orange, CA	91	—	49		42	18,578		3,277				3Q21
	Livingston, NJ	103	—	77		26	17,375		2,332				3Q21
	White Plains, NY	132	132	—		—	59,913		16,695				4Q21
	Barnet, UK	100	—	76		24	47,775		23,130				4Q21
	Coral Gables, FL	91	—	55		36	18,225		3,796				4Q21
	San Francisco, CA	214	11	170		33	110,905		89,541				1Q22
	Hendon, UK	102	—	78		24	51,764		27,223				1Q22
	Alexandria, VA	93	—	66		27	20,624		12,986				1Q22
	New York, NY	528	400	92		36	149,331		31,558				2Q22
	Subtotal	3,051	1,014	1,363		674	$	889,399	$	456,984

Seniors Housing Triple-net
	Westerville, OH	102	—	82		20	$	27,200	$	25,092			3Q20
	Edenbridge, UK	85	—	51		34	19,874		15,475				3Q20
	Thousand Oaks, CA	82	—	—		82	24,763		15,281				4Q20
	Droitwich, UK	70	—	45		25	15,665		13,360				4Q20
	Redhill, UK	76	—	46		30	19,667		9,428				2Q21
	Wombourne, UK	66	—	41		25	14,843		3,341				2Q22
	Leicester, UK	60	—	36		24	13,853		3,692				2Q22
	Subtotal	541	—	301		240	$	135,865	$	85,669

Outpatient Medical
			Rentable Square Ft	Preleased %		Health System Affiliation	Commitment Amount		Balance at 6/30/20				Estimated Conversion
	Brooklyn, NY		140,955	100	%	Yes	$	105,306	$	93,646			4Q20
	Charlotte, NC		176,640	100	%	Yes	95,703		73,877				4Q20
	Charlotte, NC		104,508	100	%	Yes	52,255		34,462				4Q20
	Subtotal		422,103				$	253,264	$	201,985




Total Development Projects											$	1,278,528		$	744,638

Note:

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


Investment


(dollars in thousands at Welltower pro rata ownership)
Development Funding Projections⁽¹⁾
					Projected Future Funding
	Projects	Beds / Units / Square Feet	Projected Yields⁽²⁾		2020 Funding		Funding Thereafter		Total Unfunded Commitments		Committed Balances
Seniors Housing Operating	23	3,051	7.8	%	$	261,694	$	170,721	$	432,415	$	889,399
Seniors Housing Triple-net	7	541	7.3	%	32,867		17,329		50,196		135,865
Outpatient Medical	3	422,103	6.5	%	51,279		—		51,279		253,264


Total	33		7.5	%	$	345,840	$	188,050	$	533,890	$	1,278,528


Development Project Conversion Estimates⁽¹⁾
Quarterly Conversions								Annual Conversions
	Amount		Projected Yields⁽²⁾			Amount		Projected Yields⁽²⁾
1Q20 actual	$	93,877	8.6	%	2020 estimate	$	742,512	7.5	%
2Q20 actual	99,580		8.1	%	2021 estimate	368,153		8.7	%
3Q20 estimate	160,592		7.4	%	2022 estimate	361,320		6.7	%
4Q20 estimate	388,463		7.2	%	Total	$	1,471,985	7.6	%
1Q21 estimate	89,697		9.5	%
2Q21 estimate	72,897		7.9	%
3Q21 estimate	79,646		9.5	%
4Q21 estimate	125,913		8.1	%
1Q22 estimate	183,293		7.5	%
2Q22 estimate	178,027		5.8	%
Total	$	1,471,985	7.6	%


Unstabilized Properties
	3/31/2020 Properties	Stabilizations	Construction Conversions⁽³⁾	Acquisitions/ Dispositions	6/30/2020 Properties	Beds / Units
Seniors Housing Operating	29	(4)	3	(1)	27	3,719
Seniors Housing Triple-net	9	(1)	2	—	10	933
Long-Term/Post-Acute Care	1	—	—	—	1	120
Total	39	(5)	5	(1)	38	4,772


Occupancy	3/31/2020 Properties	Stabilizations	Construction Conversions⁽³⁾		Acquisitions/ Dispositions		Progressions		6/30/2020 Properties
0% - 50%	14	(1)	3		(1)		1		16
50% - 70%	14	(1)	1		—		(1)		13
70% +	11	(3)	1		—		—		9
Total	39	(5)	5		(1)		—		38

Occupancy	6/30/2020 Properties	Months In Operation	Revenues		% of Total Revenues⁽⁴⁾		Gross Investment Balance		% of Total Gross Investment
0% - 50%	16	8	$	24,369	0.5	%	$	446,456	1.3	%
50% - 70%	13	23	53,894		1.2	%	438,442		1.2	%
70% +	9	19	52,463		1.1	%	372,395		1.1	%
Total	38	17	$	130,726	2.8	%	$	1,257,293	3.6	%

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.


Financial


(dollars in thousands at Welltower pro rata ownership)
Components of NAV

Stabilized NOI				Pro rata beds/units/square feet
Seniors Housing Operating⁽¹⁾	$	669,332		56,341	units
Seniors Housing Triple-net	401,644			24,680	units
Outpatient Medical	455,304			19,297,284	square feet
Health System	143,200			20,754	units/beds
Long-Term/Post-Acute Care	179,800			13,596	beds
Total In-Place NOI⁽²⁾	1,849,280
Incremental stabilized NOI⁽³⁾	63,067
Total stabilized NOI	$	1,912,347

Obligations
Lines of credit and commercial paper⁽⁴⁾	$	—
Senior unsecured notes⁽⁴⁾	11,912,711
Secured debt⁽⁴⁾	3,060,768
Financing lease liabilities	107,835
Total debt	$	15,081,314
Add (Subtract):
Other liabilities (assets), net⁽⁵⁾	$	125,981
Cash and cash equivalents and restricted cash	(1,826,243)
Net obligations	$	13,381,052

Other Assets
Land parcels	$	193,590			Effective Interest Rate⁽⁸⁾
Real estate loans receivable⁽⁶⁾	212,645				7.7%
Non real estate loans receivable⁽⁷⁾	373,835				8.2%
Joint venture real estate loans receivables⁽⁹⁾	250,621				5.3%
Other investments⁽¹⁰⁾	6,600
Investments held for sale⁽¹¹⁾	497,716
Development properties:⁽¹²⁾
Current balance	$	756,750
Unfunded commitments	534,370
Committed balances	$	1,291,120
Projected yield	7.5		%
Projected NOI	$	96,834

Common Shares Outstanding⁽¹³⁾	418,698

Notes:

(1) Includes $2,954,000 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 unstabilized properties.

(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 $1,190,412,000 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 (in thousands):


Unearned revenues	$	194,352
Below market tenant lease intangibles, net	42,151
Deferred taxes, net	(25,067)
Available-for-sale equity investments	(6,600)
In place lease intangibles, net	(36,218)
Other non-cash liabilities / (assets), net	3,582
Total non-cash liabilities/(assets), net	$	172,200

(6) Represents $216,237,000 of real estate loans excluding development loans and net of $3,592,000 of credit allowances.

(7) Represents $451,968,000 of non-real estate loans and net of $78,133,000 of credit allowances.

(8) Average cash-pay interest rates are 7.7% and 6.0% for real estate and non-real estate loans, respectively. Rates exclude non-accrual/interest-free loans.

(9) Represents partners' share of Welltower loans made to our partners in select joint ventures, secured by their interest in the joint venture properties.

(10) Represents the fair value of Genesis Healthcare, Inc. stock investment based on closing stock price at June 30, 2020.

(11) Represents expected proceeds from assets held for sale.

(12) See pages 12-13. Also includes expansion projects.

(13) Includes redeemable OP units.


Financial


(dollars in thousands at Welltower pro rata ownership)
Net Operating Income⁽¹⁾

	2Q19		3Q19		4Q19		1Q20		2Q20
Revenues:
Seniors Housing Operating
Resident fees and services	$	878,933	$	803,904	$	802,452	$	820,828	$	748,520
Interest income	—		—		36		104		88
Other income	1,387		1,347		1,915		1,058		3,978
Total revenues	880,320		805,251		804,403		821,990		752,586

Seniors Housing Triple-net
Rental income	107,220		114,419		115,717		85,409		111,749
Interest income	7,701		5,910		6,303		5,810		5,960
Other income	1,105		1,312		1,403		1,159		937
Total revenues	116,026		121,641		123,423		92,378		118,646

Outpatient Medical
Rental income	154,044		174,330		177,840		193,084		176,555
Interest income	238		358		426		466		461
Other income	161		312		1,835		409		1,679
Total revenues	154,443		175,000		180,101		193,959		178,695

Health System
Rental income	43,036		43,036		43,036		42,818		42,446


Total revenues	43,036		43,036		43,036		42,818		42,446

Long-Term/Post-Acute Care
Rental income	62,640		60,479		53,422		53,388		53,696
Interest income	9,417		9,369		8,953		8,861		9,560
Other income	173		517		473		514		(329)
Total revenues	72,230		70,365		62,848		62,763		62,927

Corporate


Other income	327		712		385		294		253
Total revenues	327		712		385		294		253

Total
Rental income	366,940		392,264		390,015		374,699		384,446
Resident fees and services	878,933		803,904		802,452		820,828		748,520
Interest income	17,356		15,637		15,718		15,241		16,069
Other income	3,153		4,200		6,011		3,434		6,518
Total revenues	$	1,266,382	$	1,216,005	$	1,214,196	$	1,214,202	$	1,155,553

Property operating expenses:
Seniors Housing Operating	$	607,836	$	554,782	$	564,895	$	582,533	$	573,042
Seniors Housing Triple-net	7,219		8,282		7,473		8,363		8,285
Outpatient Medical	47,894		57,272		55,915		58,533		50,855
Health System	20		20		20		20		20
Long-Term/Post-Acute Care	5,475		5,503		4,595		4,799		5,138

Total property operating expenses	$	668,444	$	625,859	$	632,898	$	654,248	$	637,340

Net operating income:
Seniors Housing Operating	$	272,484	$	250,469	$	239,508	$	239,457	$	179,544
Seniors Housing Triple-net	108,807		113,359		115,950		84,015		110,361
Outpatient Medical	106,549		117,728		124,186		135,426		127,840
Health System	43,016		43,016		43,016		42,798		42,426
Long-Term/Post-Acute Care	66,755		64,862		58,253		57,964		57,789
Corporate	327		712		385		294		253
Net operating income	$	597,938	$	590,146	$	581,298	$	559,954	$	518,213

Note:

(1) Please see discussion of Supplemental Reporting Measures on page 21. Includes amounts from investments sold or held for sale. NOI related to DownREIT's included at 100%.


Financial


(dollars in thousands)
Leverage and EBITDA Reconciliations⁽¹⁾
	Twelve Months Ended			Three Months Ended
	June 30, 2020			June 30, 2020
Net income (loss)	$	1,376,664		$	159,216
Interest expense	537,355			126,357
Income tax expense (benefit)	6,811			2,233
Depreciation and amortization	1,075,261			265,371
EBITDA	$	2,996,091		$	553,177
Loss (income) from unconsolidated entities	(58,322)			(1,332)

Stock-based compensation⁽²⁾	24,229			7,290
Loss (gain) on extinguishment of debt, net	68,685			249
Loss (gain) on real estate dispositions, net	(1,001,001)			(155,863)
Impairment of assets	121,172			75,151
Provision for loan losses	8,494			1,422
Loss (gain) on derivatives and financial instruments, net	5,260			1,434
Other expenses⁽²⁾	46,971			19,013
Other impairment⁽³⁾	34,110			1,842

Total adjustments	(750,402)			(50,794)
Adjusted EBITDA	$	2,245,689		$	502,383

Interest Coverage Ratios
Interest expense	$	537,355		$	126,357
Capitalized interest	18,303			4,541
Non-cash interest expense	(12,761)			(1,914)
Total interest	$	542,897		$	128,984
EBITDA	$	2,996,091		$	553,177
Interest coverage ratio	5.52		x	4.29		x
Adjusted EBITDA	$	2,245,689		$	502,383
Adjusted Interest coverage ratio	4.14		x	3.89		x

Fixed Charge Coverage Ratios
Total interest	$	542,897		$	128,984
Secured debt principal amortization	57,807			15,183
Total fixed charges	$	600,704		$	144,167
EBITDA	$	2,996,091		$	553,177
Fixed charge coverage ratio	4.99		x	3.84		x
Adjusted EBITDA	$	2,245,689		$	502,383
Adjusted Fixed charge coverage ratio	3.74		x	3.48		x

Net Debt to EBITDA Ratios
Total debt⁽⁴⁾				$	14,543,485
Less: cash and cash equivalents⁽⁵⁾				(1,766,819)
Net debt				$	12,776,666
EBITDA Annualized				$	2,212,708
Net debt to EBITDA ratio				5.77		x
Adjusted EBITDA Annualized				$	2,009,532
Net debt to Adjusted EBITDA ratio				6.36		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) Amounts relate to impairments of straight-line rent receivable deemed uncollectible.

(4) Amounts include unamortized premiums/discounts, fair value adjustments and lease liabilities related to financing leases. Operating lease liabilities related to ASC 842 adoption are excluded.

(5) Includes IRC Section 1031 deposits, if any.


Financial


(in thousands except share price)
Leverage and Current Capitalization⁽¹⁾
					% of Total
Book Capitalization
Lines of credit and commercial paper⁽²⁾	$	—	0.00	%
Long-term debt obligations⁽²⁾	14,543,485		48.41	%
Cash and cash equivalents⁽³⁾	(1,766,819)		(5.88)	%
Net debt to consolidated book capitalization	$	12,776,666	42.53	%
Total equity⁽⁴⁾	17,263,672		57.47	%
Consolidated book capitalization	$	30,040,338	100.00	%
Joint venture debt, net⁽⁵⁾	432,779
Total book capitalization	$	30,473,117

Undepreciated Book Capitalization
Lines of credit and commercial paper⁽²⁾	$	—	0.00	%
Long-term debt obligations⁽²⁾	14,543,485		40.35	%
Cash and cash equivalents⁽³⁾	(1,766,819)		(4.90)	%
Net debt to consolidated undepreciated book capitalization	$	12,776,666	35.45	%
Accumulated depreciation and amortization	6,001,177		16.65	%
Total equity⁽⁴⁾	17,263,672		47.90	%
Consolidated undepreciated book capitalization	$	36,041,515	100.00	%
Joint venture debt, net⁽⁵⁾	432,779
Total undepreciated book capitalization	$	36,474,294

Enterprise Value
Lines of credit and commercial paper⁽²⁾	$	—	0.00	%
Long-term debt obligations⁽²⁾	14,543,485		40.87	%
Cash and cash equivalents⁽³⁾	(1,766,819)		(4.96)	%
Net debt to consolidated enterprise value	$	12,776,666	35.90	%
Common shares outstanding	417,302
Period end share price	51.75
Common equity market capitalization	$	21,595,379	60.68	%
Noncontrolling interests⁽⁴⁾	1,215,532		3.42	%

Consolidated enterprise value	$	35,587,577	100.00	%
Joint venture debt, net⁽⁵⁾	432,779
Total enterprise value	$	36,020,356

Secured Debt as % of Total Assets
Secured debt⁽²⁾	$	2,619,678	7.90	%
Total assets	$	33,162,652

Total Debt as % of Total Assets
Total debt⁽²⁾	$	14,543,485	43.86	%
Total assets	$	33,162,652

Unsecured Debt as % of Unencumbered Assets
Unsecured debt⁽²⁾	$	11,815,972	38.66	%
Unencumbered assets	$	30,562,188

Notes:

(1) Please see discussion of Supplemental Reporting Measures on page 21.

(2) Amounts include unamortized premiums/discounts, fair value adjustments and lease liabilities related to financing leases. Operating lease liabilities related to ASC 842 adoption are excluded.

(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.


Financial


(dollars in thousands)
Debt Maturities and Principal Payments⁽¹⁾
Year	Lines of Credit and Commercial Paper⁽²⁾			Senior Unsecured Notes^{(3,4,5,6,7,8)}			Consolidated Secured Debt			Share of Unconsolidated Secured Debt			Noncontrolling Interests' Share of Consolidated Secured Debt			Combined Debt⁽⁹⁾			% of Total		Wtd. Avg. Interest Rate
2020	$	—		$	—		$	257,139		$	33,470		$	(63,755)		$	226,854		1.52	%	2.44	%
2021	—			—			427,969			49,529			(130,619)			346,879			2.32	%	3.33	%
2022	—			1,010,000			444,119			34,305			(65,457)			1,422,967			9.50	%	1.91	%
2023	—			1,783,621			327,388			67,402			(39,353)			2,139,058			14.29	%	3.02	%
2024	—			1,350,000			176,366			44,077			(23,123)			1,547,320			10.33	%	3.87	%
2025	—			1,250,000			206,219			462,582			(34,970)			1,883,831			12.58	%	3.89	%
2026	—			700,000			61,309			16,820			(19,130)			758,999			5.07	%	4.18	%
2027	—			720,345			156,584			61,830			(43,760)			894,999			5.98	%	2.96	%
2028	—			1,430,295			78,862			22,713			(13,902)			1,517,968			10.14	%	4.47	%
2029	—			550,000			249,174			32,643			(2,439)			829,378			5.54	%	3.54	%
Thereafter	—			3,118,450			242,860			103,662			(59,746)			3,405,226			22.73	%	4.09	%
Totals	$	—		$	11,912,711		$	2,627,989		$	929,033		$	(496,254)		$	14,973,479		100.00	%

Weighted Avg Interest Rate⁽¹⁰⁾	—			3.65		%	3.09		%	3.44		%	2.83		%	3.57		%

Weighted Avg Maturity Years	—			7.9			5.1			7.7			4.7			7.5

% Floating Rate Debt	100.00		%	14.22		%	35.19		%	20.82		%	43.17		%	17.35		%


Debt by Local Currency⁽¹⁾
	Lines of Credit and Commercial Paper			Senior Unsecured Notes			Consolidated Secured Debt			Share of Unconsolidated Secured Debt			Noncontrolling Interests' Share of Consolidated Secured Debt			Combined Debt⁽⁹⁾			Investment Hedges⁽¹¹⁾
United States		$	—		$	10,210,000		$	1,381,301		$	700,018		$	(210,963)		$	12,080,356		$	—
United Kingdom		—			1,298,745			166,586			—			(41,646)			1,423,685			1,658,322
Canada		—			403,966			1,080,102			229,015			(243,645)			1,469,438			477,415
Totals		$	—		$	11,912,711		$	2,627,989		$	929,033		$	(496,254)		$	14,973,479		$	2,135,737

Notes:

(1) Represents principal amounts due excluding unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.

(2) Our unsecured commercial paper program and our unsecured revolving credit facility had a zero balance as of June 30, 2020. 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). Available borrowing capacity of our unsecured revolving credit facility was $3,000,000,000 as of June 30, 2020.

(3) On July 1, 2020, we extinguished $160,872,000 of our 3.75% Senior Notes due March 2023 and $265,376,000 of our 3.95% Senior Notes due September 2023.

(4) 2022 includes a $1,000,000,000 unsecured term loan. The loan matures on April 1, 2022 and bears interest at LIBOR plus 1.20%.

(5) 2023 includes a $500,000,000 unsecured term loan and a CAD $250,000,000 unsecured term loan (approximately $183,621,000 USD at June 30, 2020). 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.

(6) 2027 includes CAD $300,000,000 of 2.95% senior unsecured notes (approximately $220,345,000 USD at June 30, 2020) that matures on January 15, 2027.

(7) 2028 includes £550,000,000 of 4.80% senior unsecured notes (approximately $680,295,000 USD at June 30, 2020). The notes mature on November 20, 2028.

(8) Thereafter includes £500,000,000 of 4.50% senior unsecured notes (approximately $618,450,000 USD at June 30, 2020). The notes mature on December 1, 2034.

(9) Excludes operating lease liabilities of $339,589,000 and finance lease liabilities of $107,835,000 related to ASC 842 adoption.

(10) The interest rate on the unsecured revolving credit facility is 1-month LIBOR + 0.825%. Commercial paper, senior notes and secured debt average interest rate represents the face value note rate.

(11) 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 $163,527,000, 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.


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 incurred 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. Triple-net properties for which income is recognized on a cash basis are excluded from the stable portfolio. A seniors housing operating facility is considered stable upon the earliest of 90% occupancy, NOI at or above the underwritten target or 12 months past the underwritten stabilization date. 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.


Supplemental Reporting Measures

We believe that revenues and net income, as defined by U.S. generally accepted accounting principles ("U.S. GAAP"), are the most appropriate earnings measurements. However, we consider EBITDA, Adjusted EBITDA, REVPOR, SS REVPOR, NOI, In-Place NOI ("IPNOI") and SSNOI to be useful supplemental measures of our operating performance. Excluding EBITDA and Adjusted EBITDA, these supplemental measures are disclosed on our pro rata ownership basis. Pro rata amounts are derived by reducing consolidated amounts for minority partners’ noncontrolling ownership interests and adding our minority ownership share of unconsolidated amounts. We do not control unconsolidated investments. While we consider pro rata disclosures useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution.

We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. 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. Acquisitions and development conversions are included in the same store amounts five full quarters after acquisition or being placed into service. Land parcels, loans and sub-leases, as well as any properties sold or classified as held for sale during the period, are excluded from the same store amounts. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from the same store amounts until five full quarters post completion of the redevelopment. Properties undergoing operator transitions and/or segment transitions are also excluded from the same store amounts until five full quarters post completion of the operator transition or segment transition. In addition, properties significantly impacted by force majeure, acts of God or other extraordinary adverse events are excluded from same store amounts until five full quarters after the properties are placed back into service. SSNOI excludes non-cash NOI and includes adjustments to present consistent property ownership percentages and to translate Canadian properties and UK properties using a consistent exchange rate. 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 our 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. We believe NOI, IPNOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI, 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 our 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. We use REVPOR and SS REVPOR to evaluate the revenue-generating capacity and profit potential of our 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 our 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, additional other income and other impairment charges. 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 and secured debt principal amortization. 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, excluding operating lease liabilities, 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.

Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Our 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 us, 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.


Supplemental Reporting Measures


(dollars in thousands)
Non-GAAP Reconciliations

NOI Reconciliation	2Q19		3Q19		4Q19		1Q20		2Q20
Net income (loss)	$	150,040	$	647,932	$	240,136	$	329,380	$	159,216
Loss (gain) on real estate dispositions, net	1,682		(570,250)		(12,064)		(262,824)		(155,863)
Loss (income) from unconsolidated entities	9,049		(3,262)		(57,420)		3,692		(1,332)
Income tax expense (benefit)	1,599		3,968		(4,832)		5,442		2,233
Other expenses	21,628		6,186		16,042		6,292		19,411
Impairment of assets	9,939		18,096		98		27,827		75,151
Provision for loan losses	—		—		—		7,072		1,422
Loss (gain) on extinguishment of debt, net	—		65,824		2,612		—		249
Loss (gain) on derivatives and financial instruments, net	1,913		1,244		(5,069)		7,651		1,434
General and administrative expenses	33,741		31,019		26,507		35,481		34,062
Depreciation and amortization	248,052		272,445		262,644		274,801		265,371
Interest expense	141,336		137,343		131,648		142,007		126,357
Consolidated net operating income	618,979		610,545		600,302		576,821		527,711
NOI attributable to unconsolidated investments⁽¹⁾	21,518		21,957		22,031		21,150		20,871
NOI attributable to noncontrolling interests⁽²⁾	(42,559)		(42,356)		(41,035)		(38,017)		(30,369)
Pro rata net operating income (NOI)⁽³⁾	$	597,938	$	590,146	$	581,298	$	559,954	$	518,213


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	$	752,586	$	118,646	$	178,695	$	42,446	$	62,927	$	253	$	1,155,553
Property operating expenses	(573,042)		(8,285)		(50,855)		(20)		(5,138)		—		(637,340)
NOI⁽³⁾	179,544		110,361		127,840		42,426		57,789		253		518,213
Adjust:
Interest income	(88)		(5,960)		(461)		—		(9,560)		—		(16,069)
Other income	(3,978)		(937)		(1,679)		—		329		(253)		(6,518)
Sold / held for sale	(3,405)		(28)		(7,707)		—		(54)		—		(11,194)
Developments / land	577		—		179		—		—		—		756
Non In-Place NOI⁽⁴⁾	(5,567)		(3,227)		(4,750)		(6,626)		(3,554)		—		(23,724)
Timing adjustments⁽⁵⁾	250		202		404		—		—		—		856
Total adjustments	(12,211)		(9,950)		(14,014)		(6,626)		(12,839)		(253)		(55,893)
In-Place NOI	167,333		100,411		113,826		35,800		44,950		—		462,320
Annualized In-Place NOI	$	669,332	$	401,644	$	455,304	$	143,200	$	179,800	$	—	$	1,849,280


Same Store Property Reconciliation
	Seniors Housing Operating	Seniors Housing Triple-net	Outpatient Medical	Health System	Long-Term /Post-Acute Care	Total
Total properties	612	340	383	215	137	1,687
Recent acquisitions/ development conversions⁽⁶⁾	(34)	(8)	(113)	—	—	(155)
Under development	(23)	(6)	(1)	—	—	(30)
Under redevelopment⁽⁷⁾	(10)	—	(2)	—	(1)	(13)
Current held for sale	(7)	(1)	(13)	—	(2)	(23)
Land parcels, loans and sub-leases	(10)	(10)	(8)	—	(7)	(35)
Transitions⁽⁸⁾	(31)	(13)	—	—	(3)	(47)

Same store properties	497	302	246	215	124	1,384

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 or operator transitions.

(6) Acquisitions and development conversions will enter the same store pool 5 full quarters after acquisition or certificate of occupancy, respectively.

(7) Redevelopment properties will enter the same store pool after 5 full quarters of operations post redevelopment completion.

(8) Transitioned properties will enter the same store pool after 5 full quarters of operations with the new operator in place or under the new structure.


Supplemental Reporting Measures


(dollars in thousands at Welltower pro rata ownership)

Same Store NOI Reconciliation	2Q19		3Q19		4Q19		1Q20		2Q20		Y/o/Y
Seniors Housing Operating
NOI	$	272,484	$	250,469	$	239,508	$	239,457	$	179,544
Non-cash NOI on same store properties	(82)		(3,866)		(804)		(854)		(959)
NOI attributable to non-same store properties	(53,994)		(26,600)		(21,496)		(24,283)		(15,796)
Currency and ownership adjustments⁽¹⁾	(846)		(1,353)		(1,900)		(1,710)		1,133





Other normalizing adjustments⁽²⁾	(2,083)		(56)		(1,086)		(391)		(1,317)
SSNOI⁽³⁾	215,479		218,594		214,222		212,219		162,605		(24.5)	%

Seniors Housing Triple-net
NOI	108,807		113,359		115,950		84,015		110,361
Non-cash NOI on same store properties	(5,164)		(4,585)		(3,363)		21,957		(2,073)
NOI attributable to non-same store properties	(11,772)		(17,427)		(19,349)		(11,487)		(17,428)
Currency and ownership adjustments⁽¹⁾	207		1,010		171		313		977
Normalizing adjustment for prior period allowance⁽⁴⁾	—		—		—		—		1,574

Other normalizing adjustments⁽²⁾	—		(233)		(219)		(911)		—
SSNOI	92,078		92,124		93,190		93,887		93,411		1.4	%

Outpatient Medical
NOI	106,549		117,728		124,186		135,426		127,840
Non-cash NOI on same store properties	(1,903)		(1,721)		(2,337)		(1,800)		(1,057)
NOI attributable to non-same store properties	(21,077)		(32,799)		(36,083)		(49,083)		(47,581)
Currency and ownership adjustments⁽¹⁾	(6,359)		(5,554)		(6,540)		(6,414)		373
Normalizing adjustment for lease termination fees⁽⁵⁾	(92)		—		(855)		—		(658)

Other normalizing adjustments⁽²⁾	118		—		(504)		(32)		(268)
SSNOI	77,236		77,654		77,867		78,097		78,649		1.8	%

Health System
NOI	43,016		43,016		43,016		42,798		42,426
Non-cash NOI on same store properties	(7,184)		(6,858)		(6,694)		(6,670)		(6,626)
NOI attributable to non-same store properties	(517)		(520)		(522)		(100)		—

Other normalizing adjustments⁽²⁾	—		—		—		(229)		—
SSNOI	35,315		35,638		35,800		35,799		35,800		1.4	%

Long-Term/Post-Acute Care
NOI	66,755		64,862		58,253		57,964		57,789
Non-cash NOI on same store properties	(3,726)		(3,698)		(3,493)		(3,232)		(3,433)
NOI attributable to non-same store properties	(20,665)		(18,542)		(11,821)		(11,260)		(11,294)
Currency and ownership adjustments⁽¹⁾	27		6		5		32		84

Normalizing adjustments for lease restructuring⁽⁶⁾	(516)		(565)		(565)		(565)		—

Other normalizing adjustments⁽²⁾	397		271		7		—		—
SSNOI	42,272		42,334		42,386		42,939		43,146		2.1	%

Corporate
NOI	327		712		385		294		253
NOI attributable to non-same store properties	(327)		(712)		(385)		(294)		(253)
SSNOI	—		—		—		—		—

Total
NOI	597,938		590,146		581,298		559,954		518,213
Non-cash NOI on same store properties	(18,059)		(20,728)		(16,691)		9,401		(14,148)
NOI attributable to non-same store properties	(108,352)		(96,600)		(89,656)		(96,507)		(92,352)
Currency and ownership adjustments⁽¹⁾	(6,971)		(5,891)		(8,264)		(7,779)		2,567
Normalizing adjustments, net	(2,176)		(583)		(3,222)		(2,128)		(669)
SSNOI	$	462,380	$	466,344	$	463,465	$	462,941	$	413,611	(10.5)	%

Notes:

(1) Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.32 and to translate UK properties at a GBP/USD rate of 1.30.

(2) Represents aggregate normalizing adjustments which are individually less than 0.50% of SSNOI growth per property type.

(3) SHO SSNOI includes expenses that are directly attributable to the COVID-19 pandemic net of any reimbursements.

(4) Represents normalizing adjustment related to an allowance of prior period rent related to two Seniors Housing Triple-net leases.

(5) Represents normalizing adjustment related to lease termination fees associated with Outpatient Medical tenants.

(6) Represents normalizing adjustment related to lease restructuring associated with one Long-Term/Post-Acute lease.


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	$	592,693	$	78,046	$	102,911	$	773,650
Unconsolidated SHO revenues attributable to Welltower⁽¹⁾	22,102		—		20,314		42,416
SHO revenues attributable to noncontrolling interests⁽²⁾	(33,435)		(7,246)		(22,799)		(63,480)
Pro rata SHO revenues⁽³⁾	581,360		70,800		100,426		752,586
SHO interest and other income	(3,961)		(9)		(96)		(4,066)
SHO revenues attributable to sold and held for sale properties	(15,250)		—		—		(15,250)
Currency and ownership adjustments⁽⁴⁾	—		3,386		5,469		8,855
SHO local revenues	562,149		74,177		105,799		742,125
Average occupied units/month	30,166		2,823		12,617		45,606
REVPOR/month in USD	$	6,229	$	8,783	$	2,803	$	5,500
REVPOR/month in local currency⁽⁴⁾			£	6,756	C$	3,688


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

	United States									United Kingdom									Canada					Total
	2Q19			2Q20			2Q19			2Q20			2Q19			2Q20			2Q19		2Q20
SHO SS REVPOR Growth
Consolidated SHO revenues	$	721,254		$	592,693		$	81,691		$	78,046		$	112,584		$	102,911		$	915,529	$	773,650
Unconsolidated SHO revenues attributable to WELL⁽¹⁾	21,608			22,102			—			—			20,499			20,314			42,107		42,416
SHO revenues attributable to noncontrolling interests⁽²⁾	(45,214)			(33,435)			(6,932)			(7,246)			(25,170)			(22,799)			(77,316)		(63,480)
SHO pro rata revenues⁽³⁾	697,648			581,360			74,759			70,800			107,913			100,426			880,320		752,586
Non-cash revenues on same store properties	(842)			(841)			(19)			—			—			—			(861)		(841)
Revenues attributable to non-same store properties	(176,315)			(88,880)			(11,502)			(10,689)			(4,241)			(2,674)			(192,058)		(102,243)
Currency and ownership adjustments⁽⁴⁾	(4,962)			(4,406)			725			2,877			1,718			5,330			(2,519)		3,801



Other normalizing adjustments⁽⁵⁾	(1,739)			(1,828)			7			(8)			—			—			(1,732)		(1,836)
SHO SS revenues⁽⁶⁾	513,790			485,405			63,970			62,980			105,390			103,082			683,150		651,467
Avg. occupied units/month⁽⁷⁾	27,414			26,040			2,577			2,431			12,733			12,368			42,724		40,839
SHO SS REVPOR⁽⁸⁾	$	6,264		$	6,231		$	8,297		$	8,659		$	2,767		$	2,786		$	5,345	$	5,332
SS REVPOR YOY growth	—		%	(0.5)		%	—		%	4.4		%	—		%	0.7		%	—		(0.2)		%

SHO SSNOI Growth
Consolidated SHO NOI	$	217,392		$	138,301		$	19,898		$	10,967		$	40,922		$	28,869		$	278,212	$	178,137
Unconsolidated SHO NOI attributable to WELL⁽¹⁾	8,112			5,421			—			—			7,911			7,856			16,023		13,277
SHO NOI attributable to noncontrolling interests⁽²⁾	(11,687)			(5,233)			(860)			(385)			(9,204)			(6,252)			(21,751)		(11,870)
SHO pro rata NOI⁽³⁾	213,817			138,489			19,038			10,582			39,629			30,473			272,484		179,544
Non-cash NOI on same store properties	(83)			(939)			(2)			2			3			(22)			(82)		(959)
NOI attributable to non-same store properties	(50,269)			(14,659)			(2,814)			(914)			(911)			(223)			(53,994)		(15,796)
Currency and ownership adjustments⁽⁴⁾	(1,692)			(970)			198			456			648			1,647			(846)		1,133





Other normalizing adjustments⁽⁵⁾	(2,090)			(1,309)			7			(8)			—			—			(2,083)		(1,317)
SHO pro rata SSNOI⁽⁶⁾	$	159,683		$	120,612		$	16,427		$	10,118		$	39,369		$	31,875		$	215,479	$	162,605
SHO SSNOI growth				(24.5)		%				-38.4		%				(19.0)		%			(24.5)		%

SHO SSNOI/Unit
Trailing four quarters' SSNOI⁽⁶⁾				$	593,948					$	63,339					$	150,353				$	807,640
Average units in service⁽⁹⁾				32,154						3,163						14,366					49,683
SSNOI/unit in USD				$	18,472					$	20,025					$	10,466				$	16,256
SSNOI/unit in local currency⁽⁴⁾										£	15,404					C$	13,771

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 1.32 and to translate UK properties at a GBP/USD rate of 1.30.

(5) Represents aggregate normalizing adjustments which are individually less than .50% of SSNOI growth.

(6) Represents SS SHO revenues/SSNOI at Welltower pro rata ownership. See page 23 for more information.

(7) Represents average occupied units for SS properties related solely to referenced country on a pro rata basis.

(8) Represents pro rata SS average revenues generated per occupied room per month.

(9) Represents average units in service for SS properties related solely to referenced country on a pro rata basis.


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 Welltower uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “pro forma,” “estimate” or similar expressions that do not relate solely to historical matters, Welltower is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower’s actual results to differ materially from Welltower’s expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to: the duration and scope of the COVID-19 pandemic; the impact of the COVID-19 pandemic on occupancy rates and on the operations of Welltower and its operators/tenants; actions governments take in response to the COVID-19 pandemic, including the introduction of public health measures and other regulations affecting Welltower’s properties and the operations of Welltower and its operators/tenants; the effects of health and safety measures adopted by Welltower and its operators/tenants related to the COVID-19 pandemic; increased operational costs as a result of health and safety measures related to COVID-19; the impact of the COVID-19 pandemic on the business and financial condition of operators/tenants and their ability to make payments to Welltower; disruptions to Welltower's property acquisition and disposition activity due to economic uncertainty caused by COVID-19; general economic uncertainty in key markets as a result of the COVID-19 pandemic and a worsening of global economic conditions or low levels of economic growth; the status of capital markets, including availability and cost of capital; uncertainty from the expected discontinuance of LIBOR and the transition to any other interest rate benchmark; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; Welltower’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting Welltower’s properties; Welltower’s ability to re-lease space at similar rates as vacancies occur; Welltower’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower’s properties; changes in rules or practices governing Welltower’s financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower’s ability to maintain Welltower’s qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower’s reports filed from time to time with the SEC. Finally, Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.

Additional Information

The information in this supplemental information package should be read in conjunction with our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our earnings press release dated August 5, 2020 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 our 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. We routinely post important information on our website at www.welltower.com in the “Investors” section, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors.” Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the SEC. The information on or connected to our 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.