FOR IMMEDIATE RELEASE
August 9, 2022
For more information contact:
Tim McHugh (419) 247-2800
Welltower Reports Second Quarter 2022 Results
Toledo, Ohio, August 9, 2022…..Welltower Inc. (NYSE:WELL) today announced results for the quarter ended June 30, 2022.
Recent Highlights
•Reported net income attributable to common stockholders of $0.20 per diluted share
•Reported normalized FFO attributable to common stockholders of $0.86 per diluted share
•Reported normalized FFO growth attributable to common stockholders per diluted share of 8.9% over the prior year, and 7.7% on a constant currency basis excluding Provider Relief Funds
•Reported total portfolio year-over-year same store NOI ("SSNOI") growth of 8.7%, driven by SSNOI growth in our Seniors Housing Operating ("SHO") portfolio of 15.4%
•SHO portfolio year-over-year same store revenue growth accelerated relative to the first quarter, increasing to 11.5% in the second quarter, driven by 500 bps of year-over-year average occupancy growth and 4.5% same store REVPOR growth
•Completed $1.6 billion of pro rata gross investments during the second quarter including $1.1 billion in acquisitions and loan funding and $448 million in development funding, continuing one of the most active starts to the year for investment activity in Welltower's history. Transactions during the period were funded, in part, through the issuance of Operating Partnership Units ("OP Units")
•Closed on an amended $5.2 billion unsecured credit facility with improved pricing across term loans
•Earned the 2022 ENERGY STAR® Partner of the Year Award for the fourth consecutive year and attained the level of Sustained Excellence, the Environmental Protection Agency's highest recognition within the ENERGY STAR® program, for the second consecutive year
COVID-19 Update
During the period, we recognized $17 million of Provider Relief Funds, as compared to guidance of approximately $6 million. As a result, second quarter 2022 net income attributable to common stockholders and normalized FFO benefited by approximately $0.02 per diluted share relative to guidance.
Our share of property-level expenses associated with the COVID-19 pandemic relating to our SHO portfolio totaled $9 million. Net of reimbursements including Provider Relief Funds and similar programs in the U.K. and Canada, our share of property-level expenses associated with the COVID-19 pandemic relating to our SHO portfolio totaled a benefit of approximately $13 million and $6 million for the three months and six months ended June 30, 2022, respectively, as compared to a benefit of approximately $1 million and $24 million for the three months and six months ended June 30, 2021, respectively. Such amounts had a favorable impact on net income attributable to common stockholders and normalized FFO per diluted share of $0.03 and $0.01 for the three months and six months ended June 30, 2022, respectively, and a favorable impact of less than $0.01 and $0.06 per diluted share for the three months and six months ended June 30, 2021, respectively.
Capital Activity and Liquidity In June 2022, we closed on an amended $5.2 billion unsecured credit facility with improved pricing across our term loans. The credit facility includes $4.0 billion of revolving credit capacity at a borrowing rate of 77.5 basis points over the adjusted SOFR rate, $1.0 billion of USD term loan capacity at a borrowing rate of 85.0 basis points over the adjusted SOFR rate and $250 million CAD term loan capacity at 85.0 basis points over CDOR. In addition, the revolving facility and term loans permit a reduction in the interest rate upon meeting certain reductions in greenhouse gas emissions.
Inclusive of available borrowings under our line of credit, cash and cash equivalents, and restricted cash, as of June 30, 2022, we had $4.1 billion of near-term available liquidity and no material senior unsecured note maturities until 2024. During the three months ended June 30, 2022, we settled 9.4 million shares of common stock that were sold under our ATM program via forward sale agreements, resulting in $820 million of gross proceeds. During the quarter, we extinguished $96 million of secured debt at a blended average interest rate of 4.09%.
On May 24, 2022, Welltower OP Inc., a wholly owned subsidiary of Welltower Inc., converted from a Delaware corporation into a Delaware limited liability company named Welltower OP LLC, effectively completing the formation of an UPREIT structure. This
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| 2Q22 Earnings Release | | August 9, 2022 |
reorganization aligns our corporate structure with other publicly traded REITs and allows us to more efficiently acquire properties in a tax-deferred manner. Detailed information on the UPREIT reorganization can be found in the Form 8-K filed on May 23, 2022 and on our website.
Investment and Disposition Activity In the second quarter, we completed $1.6 billion of pro rata gross investments including $1.1 billion in acquisitions and loan funding, as well as $448 million in development funding. Transactions during this period were funded, in part, through the issuance of OP Units. We opened three development projects for an aggregate pro rata investment amount of $84 million. Additionally, during the quarter we completed pro rata property dispositions and loan payoffs of $101 million.
Notable Investment Activity Completed During the Quarter
Calamar During the second quarter, we acquired a portfolio of 25 senior apartment communities in non-coastal East Coast and Midwest markets, including 20 newer vintage properties and five properties currently in development, for $502 million or $172,000 per unit. The transaction was funded through cash, the assumption of debt and the issuance of OP Units. With the closing of this transaction, Welltower, as the largest owner of moderately priced age-restricted and age-targeted rental housing in the U.S., significantly expanded its market leadership with a total of nearly 10,000 units.
Cogir Management Corporation We continued to grow our relationship with Cogir, closing on three separate transactions during the quarter. In April, we closed on a three-property portfolio in Washington state for a pro rata purchase price of $244 million in a 90/10 joint venture, where Cogir also assumed the management of the properties.
Additionally, we closed on two properties in Montreal, Quebec for a pro rata purchase price of $102 million in a 95/5 joint venture and one property in Brentwood, California for a pro rata purchase price of $35 million in a 90/10 joint venture. Here to, Cogir assumed the management of the properties upon closing.
Oakmont Management Group During the quarter, we further expanded our relationship with Oakmont through the acquisition of an assisted living and memory care facility in Bakersfield, California for $22 million.
StoryPoint Senior Living As previously announced, we entered into an agreement to expand our relationship with StoryPoint Senior Living, a preeminent senior living operator based in Brighton, Michigan, through the acquisition of 33 communities throughout Michigan, Ohio and Tennessee under an aligned RIDEA 3.0 contract. During April, we closed on the first tranche through the acquisition of two recently opened communities located in Ohio and Tennessee for a pro rata purchase price of $65 million. The portfolio was acquired at a significant discount to estimated replacement cost and is expected to generate a high single-digit unlevered IRR.
Treplus Communities During the second quarter, we expanded our relationship with Treplus Communities through the acquisition of a portfolio of three class-A wellness housing communities in the Midwest. The communities feature unique environments with individual cottage style units, clubhouses, 24/7 concierge services, and offer residents a wellness-oriented social lifestyle.
Outpatient Medical Acquisition During the quarter, we acquired a medical office building in Pleasanton, California for $35 million. The property has approximately 93,000 rentable square feet and is currently 90% leased.
Other Transactions Additionally during the second quarter, we acquired four medical office buildings for $68 million. We disposed of two properties previously leased to Genesis Healthcare and one seniors housing operating property for proceeds of $21 million.
Investment Activity Subsequent to Quarter End
West Coast Transition Portfolio In July, we commenced the previously announced transition of 12 well-located properties on the West Coast of the U.S., representing 2,010 assisted living units, to three best-in-class operators in Oakmont, Cogir and Kisco Senior Living under well-aligned management contracts. The transitions are expected to drive improved NOI through both higher occupancy and lower expenses. Cogir and Kisco will each assume management of one property in markets where they will have existing local scale.
Oakmont Management Group In July, we continued to expand our relationship with Oakmont through the acquisition of three newly-constructed rental communities and three stable entrance fee communities in high barrier-to-entry California markets for an aggregate purchase price of $312 million. The portfolio will be managed by Oakmont under a RIDEA 3.0 management contract.
Dividend On August 9, 2022, the Board of Directors declared a cash dividend for the quarter ended June 30, 2022 of $0.61 per share. This dividend, which will be paid on August 31, 2022 to stockholders of record as of August 23, 2022, will be our 205th consecutive quarterly cash dividend. The declaration and payment of future quarterly dividends remains subject to review and approval by the Board of Directors.
Outlook for Third Quarter 2022 The degree to which the COVID-19 pandemic continues to impact our operations and those of our operators and tenants, including the variability in the timing of recovery, is dependent on a variety of factors and remains highly uncertain. Accordingly, we are only introducing earnings guidance for the quarter ended September 30, 2022 and expect to report net income attributable to common stockholders in a range of $0.12 to $0.17 per diluted share and normalized FFO attributable to common stockholders in a range of $0.82 to $0.87 per diluted share. In preparing our guidance, we have made the following assumptions:
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| 2Q22 Earnings Release | | August 9, 2022 |
•Same Store NOI: We expect average blended SSNOI growth of 7% to 9%, which is comprised of the following components:
◦Seniors Housing Operating approximately 15% to 20%
◦Seniors Housing Triple-net approximately 5% to 6%
◦Outpatient Medical approximately 1.75% to 2.75%
◦Health System approximately 2.75%
◦Long-Term/Post-Acute Care approximately 2.5% to 3.5%
•Provider Relief Funds: Our third quarter guidance includes approximately $7 million of Provider Relief Funds, which are expected to be received during the quarter.
•Impact of Interest Rates and Foreign Exchange Rates: Increased interest rates on floating rate debt and a strengthening U.S. Dollar relative to the British Pound and Canadian Dollar are expected to reduce third quarter 2022 normalized FFO attributable to common stockholders by approximately $0.03 per diluted share versus the second quarter 2022 and $0.04 per diluted share versus the third quarter 2021.
•General and Administrative Expenses: We anticipate third quarter general and administrative expenses to be approximately $34 million to $36 million and stock-based compensation expense to be approximately $5 million.
•Investments: Our earnings guidance includes only those acquisitions closed or announced to date. Furthermore, no transitions or restructures beyond those announced to date are included.
•Development: We anticipate funding approximately $670 million of development through the remainder of 2022 relating to projects underway on June 30, 2022.
•Dispositions: We expect pro rata disposition proceeds of $258 million at a blended yield of 5.9% in the next twelve months. This includes approximately $231 million of expected proceeds from properties classified as held-for-sale as of June 30, 2022 and $27 million of expected proceeds from loan repayments.
Our guidance does not include any additional investments, dispositions or capital transactions beyond those we have announced, nor any other expenses, impairments, unanticipated additions to the loan loss reserve or other additional normalizing items. Please see the Supplemental Reporting Measures section for further discussion and our definition of normalized FFO and SSNOI and Exhibit 3 for a reconciliation of the outlook for net income available to common stockholders to normalized FFO attributable to common stockholders. We will provide additional detail regarding our third quarter outlook and assumptions on the second quarter 2022 conference call.
Conference Call Information We have scheduled a conference call on Wednesday, August 10, 2022 at 9:00 a.m. Eastern Time to discuss our second quarter 2022 results, industry trends and portfolio performance. Telephone access will be available by dialing (888) 340-5024 or (646) 960-0135 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through August 17, 2022. To access the rebroadcast, dial (800) 770-2030 or (647) 362-9199 (international). The conference ID number is 8230248. To participate in the webcast, log on to www.welltower.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days.
Supplemental Reporting Measures We believe that net income and net income attributable to common stockholders ("NICS"), as defined by U.S. generally accepted accounting principles ("U.S. GAAP"), are the most appropriate earnings measurements. However, we consider funds from operations ("FFO"), normalized FFO, NOI, SSNOI, REVPOR and SS REVPOR to be useful supplemental measures of our operating performance. 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.
Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO attributable to common stockholders, as defined by NAREIT, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests. Normalized FFO attributable to common stockholders represents FFO attributable to common stockholders adjusted for certain items detailed in Exhibit 2. We believe that normalized FFO attributable to common stockholders is a useful supplemental measure of operating performance because investors and equity analysts may use this measure to compare the operating performance of the Company between periods or as compared to other REITs or other companies on a consistent basis without having
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| 2Q22 Earnings Release | | August 9, 2022 |
to account for differences caused by unanticipated and/or incalculable items. In addition, we believe that presentation of constant currency normalized FFO exclusive of Provider Relief Funds provides enhanced comparability for investor evaluations of period-over-period results.
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. 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 and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties. No reconciliation of the forecasted range for SSNOI on a combined basis or by property type is included in this release because we are unable to quantify certain amounts that would be required to be included in the comparable GAAP financial measure without unreasonable efforts, and we believe such reconciliation would imply a degree of precision that could be confusing or misleading to investors.
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.
Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and ratings 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, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not 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. Please see the exhibits for reconciliations of supplemental reporting measures and the supplemental information package for the quarter ended June 30, 2022, which is available on the Company’s website (www.welltower.com), for information and reconciliations of additional supplemental reporting measures.
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 infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate investment trust (“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. 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
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conference calls and filings with the Securities and Exchange Commission. The information on our website is not incorporated by reference in this press release, and our web address is included as an inactive textual reference only.
Forward-Looking Statements and Risk Factors This press release 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, including statements related to Funds From Operations guidance, 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 impact of the COVID-19 pandemic; uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation; the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; Welltower’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting Welltower’s properties; Welltower’s ability to re-lease space at similar rates as vacancies occur; Welltower’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower’s properties; changes in rules or practices governing Welltower’s financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower’s ability to maintain its qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower’s reports filed from time to time with the SEC. 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.
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| 2Q22 Earnings Release | | August 9, 2022 |
Welltower Inc.
Financial Exhibits
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| Consolidated Balance Sheets (unaudited) |
| (in thousands) |
| | | June 30, |
| | | 2022 | | 2021 |
| Assets | | | | |
| Real estate investments: | | | | |
| Land and land improvements | | $ | 4,109,851 | | | $ | 3,448,542 | |
| Buildings and improvements | | 32,480,543 | | | 28,124,236 | |
| Acquired lease intangibles | | 1,902,141 | | | 1,516,971 | |
| Real property held for sale, net of accumulated depreciation | | 177,719 | | | 592,699 | |
| Construction in progress | | 900,633 | | | 458,844 | |
| Less accumulated depreciation and intangible amortization | | (7,437,779) | | | (6,415,676) | |
| Net real property owned | | 32,133,108 | | | 27,725,616 | |
| Right of use assets, net | | 324,720 | | | 453,621 | |
| Real estate loans receivable, net of credit allowance | | 956,285 | | | 1,097,299 | |
| Net real estate investments | | 33,414,113 | | | 29,276,536 | |
| Other assets: | | | | |
| Investments in unconsolidated entities | | 1,300,975 | | | 1,020,112 | |
| Goodwill | | 68,321 | | | 68,321 | |
| Cash and cash equivalents | | 363,339 | | | 513,602 | |
| Restricted cash | | 78,912 | | | 295,102 | |
| Straight-line rent receivable | | 408,575 | | | 331,381 | |
| Receivables and other assets | | 939,436 | | | 671,062 | |
| Total other assets | | 3,159,558 | | | 2,899,580 | |
| Total assets | | $ | 36,573,671 | | | $ | 32,176,116 | |
| | | | |
| Liabilities and equity | | | | |
| Liabilities: | | | | |
| Unsecured credit facility and commercial paper | | $ | 354,000 | | | $ | — | |
| Senior unsecured notes | | 12,488,718 | | | 11,157,732 | |
| Secured debt | | 2,191,826 | | | 2,304,178 | |
| Lease liabilities | | 410,717 | | | 409,628 | |
| Accrued expenses and other liabilities | | 1,254,497 | | | 1,061,370 | |
| Total liabilities | | 16,699,758 | | | 14,932,908 | |
| Redeemable noncontrolling interests | | 420,018 | | | 392,379 | |
| Equity: | | | | |
| Common stock | | 464,778 | | | 423,933 | |
| Capital in excess of par value | | 24,465,041 | | | 21,161,838 | |
| Treasury stock | | (111,691) | | | (108,633) | |
| Cumulative net income | | 8,815,446 | | | 8,425,401 | |
| Cumulative dividends | | (14,932,198) | | | (13,854,145) | |
| Accumulated other comprehensive income | | (145,196) | | | (127,948) | |
| | | | |
| Total Welltower Inc. stockholders’ equity | | 18,556,180 | | | 15,920,446 | |
| Noncontrolling interests | | 897,715 | | | 930,383 | |
| Total equity | | 19,453,895 | | | 16,850,829 | |
| Total liabilities and equity | | $ | 36,573,671 | | | $ | 32,176,116 | |
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| 2Q22 Earnings Release | | August 9, 2022 |
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| Consolidated Statements of Income (unaudited) | | | | |
| (in thousands, except per share data) | | | | |
| | | | | Three Months Ended | | Six Months Ended |
| | | | | June 30, | | June 30, |
| | | | | 2022 | | 2021 | | 2022 | | 2021 |
| Revenues: | | | | | | | | |
| | | Resident fees and services | | $ | 1,009,999 | | | $ | 740,891 | | | $ | 2,004,334 | | | $ | 1,464,355 | |
| | | Rental income | | 361,411 | | | 354,723 | | | 717,801 | | | 657,566 | |
| | | Interest income | | 37,140 | | | 38,448 | | | 76,134 | | | 58,027 | |
| | | Other income | | 63,986 | | | 6,930 | | | 69,971 | | | 13,106 | |
| | Total revenues | | 1,472,536 | | | 1,140,992 | | | 2,868,240 | | | 2,193,054 | |
| Expenses: | | | | | | | | |
| | | Property operating expenses | | 854,083 | | | 642,657 | | | 1,707,752 | | | 1,259,983 | |
| | | Depreciation and amortization | | 310,295 | | | 240,885 | | | 614,383 | | | 485,311 | |
| | | Interest expense | | 127,750 | | | 122,341 | | | 249,446 | | | 245,483 | |
| | | General and administrative expenses | | 36,554 | | | 31,436 | | | 74,260 | | | 61,362 | |
| | | Loss (gain) on derivatives and financial instruments, net | | (1,407) | | | (359) | | | 1,171 | | | 1,575 | |
| | | Loss (gain) on extinguishment of debt, net | | 603 | | | 55,612 | | | 591 | | | 50,969 | |
| | Provision for loan losses, net | | 165 | | | 6,197 | | | (639) | | | 7,580 | |
| | | Impairment of assets | | — | | | 23,692 | | | — | | | 47,260 | |
| | | Other expenses | | 35,166 | | | 11,687 | | | 61,235 | | | 22,681 | |
| | | Total expenses | | 1,363,209 | | | 1,134,148 | | | 2,708,199 | | | 2,182,204 | |
| Income (loss) from continuing operations before income taxes | | | | | | | | |
| | | and other items | | 109,327 | | | 6,844 | | | 160,041 | | | 10,850 | |
| Income tax (expense) benefit | | (3,065) | | | 2,221 | | | (8,078) | | | (1,722) | |
| Income (loss) from unconsolidated entities | | (7,058) | | | (7,976) | | | (9,942) | | | 5,073 | |
| Gain (loss) on real estate dispositions, net | | (3,532) | | | 44,668 | | | 19,402 | | | 103,748 | |
| Income (loss) from continuing operations | | 95,672 | | | 45,757 | | | 161,423 | | | 117,949 | |
| | | | | | | | |
| Net income (loss) | | 95,672 | | | 45,757 | | | 161,423 | | | 117,949 | |
| | | | | | | | | | |
| | | | | | | | | | |
| Less: | | Net income (loss) attributable to noncontrolling interests (1) | | 5,888 | | | 19,500 | | | 9,714 | | | 20,146 | |
| Net income (loss) attributable to common stockholders | | $ | 89,784 | | | $ | 26,257 | | | $ | 151,709 | | | $ | 97,803 | |
| Average number of common shares outstanding: | | | | | | | | |
| | | Basic | | 454,327 | | | 417,452 | | | 450,865 | | | 417,360 | |
| | | Diluted | | 457,082 | | | 419,305 | | | 453,455 | | | 419,205 | |
| Net income (loss) attributable to common stockholders per share: | | | | | | | | |
| | | Basic | | $ | 0.20 | | | $ | 0.06 | | | $ | 0.34 | | | $ | 0.23 | |
| | | Diluted(2) | | $ | 0.20 | | | $ | 0.06 | | | $ | 0.33 | | | $ | 0.23 | |
| Common dividends per share | | $ | 0.61 | | | $ | 0.61 | | | $ | 1.22 | | | $ | 1.22 | |
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(1) Includes amounts attributable to redeemable noncontrolling interests. |
(2) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. |
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| 2Q22 Earnings Release | | August 9, 2022 |
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| FFO Reconciliations | | | | | | | | Exhibit 1 | |
| (in thousands, except per share data) | | Three Months Ended | | Six Months Ended | |
| | | | | June 30, | | June 30, | |
| | | | | 2022 | | 2021 | | 2022 | | 2021 | |
| Net income (loss) attributable to common stockholders | | $ | 89,784 | | | $ | 26,257 | | | $ | 151,709 | | | $ | 97,803 | | |
| Depreciation and amortization | | 310,295 | | | 240,885 | | | 614,383 | | | 485,311 | | |
| Impairments and losses (gains) on real estate dispositions, net | | 3,532 | | | (20,976) | | | (19,402) | | | (56,488) | | |
Noncontrolling interests(1) | | (13,173) | | | (16,591) | | | (27,926) | | | (29,107) | | |
Unconsolidated entities(2) | | 19,150 | | | 19,265 | | | 38,459 | | | 38,488 | | |
| NAREIT FFO attributable to common stockholders | | 409,588 | | | 248,840 | | | 757,223 | | | 536,007 | | |
Normalizing items, net(3) | | (14,975) | | | 81,407 | | | 5,672 | | | 128,152 | | |
| Normalized FFO attributable to common stockholders | | $ | 394,613 | | | $ | 330,247 | | | $ | 762,895 | | | $ | 664,159 | | |
| Provider Relief Funds received | | (17,132) | | | (5,294) | | | (17,733) | | | (40,976) | | |
| Provider Relief Funds attributable to noncontrolling interests and unconsolidated entities, net | | 26 | | | 264 | | | 45 | | | 126 | | |
Foreign currency impact(4) | | 4,720 | | | (136) | | | 6,495 | | | 674 | | |
| Constant currency normalized FFO attributable to common stockholders, excluding Provider Relief Funds | | $ | 382,227 | | | $ | 325,081 | | | $ | 751,702 | | | $ | 623,983 | | |
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| Average diluted common shares outstanding | | 457,082 | | | 419,305 | | | 453,455 | | | 419,205 | | |
| | | | | | | | | | | | |
| Per diluted share data attributable to common stockholders: | | | | | | | | | |
| Net income (loss)(5) | | $ | 0.20 | | | $ | 0.06 | | | $ | 0.33 | | | $ | 0.23 | | |
| NAREIT FFO | | $ | 0.90 | | | $ | 0.59 | | | $ | 1.67 | | | $ | 1.28 | | |
| Normalized FFO | | $ | 0.86 | | | $ | 0.79 | | | $ | 1.68 | | | $ | 1.58 | | |
| | % growth | | | 8.9 | % | | | | | | | |
| Constant currency normalized FFO, excluding Provider Relief Funds | | $ | 0.84 | | | $ | 0.78 | | | $ | 1.66 | | | $ | 1.49 | | |
| | % growth | | | 7.7 | % | | | | | | | |
| | | | | | | | | | | | |
| Normalized FFO Payout Ratio: | | | | | | | | | |
| Dividends per common share | | $ | 0.61 | | | $ | 0.61 | | | $ | 1.22 | | | $ | 1.22 | | |
| Normalized FFO attributable to common stockholders per share | | $ | 0.86 | | | $ | 0.79 | | | $ | 1.68 | | | $ | 1.58 | | |
| | Normalized FFO payout ratio | | 71 | % | | 77 | % | | 73 | % | | 77 | % | |
| | | | | | | | | | | | |
Other items:(6) | | | | | | | | | |
Net straight-line rent and above/below market rent amortization(7) | | $ | (26,127) | | | $ | (20,729) | | | $ | (46,141) | | | $ | (38,863) | | |
Non-cash interest expenses(8) | | 5,552 | | | 4,714 | | | 10,273 | | | 8,349 | | |
| Recurring cap-ex, tenant improvements, and lease commissions | | (39,558) | | | (20,426) | | | (72,024) | | | (31,859) | | |
Stock-based compensation(9) | | 5,900 | | | 4,129 | | | 13,341 | | | 9,510 | | |
| |
| (1) Represents noncontrolling interests' share of net FFO adjustments. | |
| (2) Represents Welltower's share of net FFO adjustments from unconsolidated entities. | |
| (3) See Exhibit 2. | |
| (4) Foreign currency impact is calculated assuming constant exchange rates for all periods presented of 1.2286 for USD/CAD and of 1.3977 for GBP/USD. | |
| (5) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | |
| (6) Amounts presented net of noncontrolling interests' share and including Welltower's share of unconsolidated entities. | |
| (7) Excludes normalized other impairment (see Exhibit 2). | |
| (8) Excludes normalized foreign currency loss (gain) (see Exhibit 2). | |
| (9) Excludes certain severance related stock-based compensation recorded in other expense (see Exhibit 2). | |
| | | | | | | | |
| 2Q22 Earnings Release | | August 9, 2022 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Normalizing Items | | | | Exhibit 2 | |
| (in thousands, except per share data) | | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | |
| | 2022 | | 2021 | | 2022 | | 2021 | |
| Loss (gain) on derivatives and financial instruments, net | | $ | (1,407) | | (1) | $ | (359) | | | $ | 1,171 | | | $ | 1,575 | | |
| Loss (gain) on extinguishment of debt, net | | 603 | | (2) | 55,612 | | | 591 | | | 50,969 | | |
| Provision for loan losses, net | | 165 | | (3) | 6,197 | | | (639) | | | 7,580 | | |
| Nonrecurring income tax benefits | | — | | | (6,298) | | | — | | | (6,298) | | |
| | | | | | | | | |
| Other impairment | | (620) | | (4) | — | | | (620) | | | 49,241 | | |
| Other expenses | | 35,166 | | (5) | 11,687 | | | 61,235 | | | 22,681 | | |
| Lease termination and leasehold interest adjustment | | (56,397) | | (6) | — | | | (64,854) | | | — | | |
| Casualty losses, net of recoveries | | 2,673 | | (7) | — | | | 2,686 | | | — | | |
| Foreign currency loss (gain) | | 1,840 | | (8) | — | | | 1,840 | | | — | | |
| Normalizing items attributable to noncontrolling interests and unconsolidated entities, net | | 3,002 | | (9) | 14,568 | | | 4,262 | | | 2,404 | | |
| Net normalizing items | | $ | (14,975) | | | $ | 81,407 | | | $ | 5,672 | | | $ | 128,152 | | |
| | | | | | | | | |
| Average diluted common shares outstanding | | 457,082 | | | 419,305 | | | 453,455 | | | 419,205 | | |
| Net normalizing items per diluted share | | $ | (0.03) | | | $ | 0.19 | | | $ | 0.01 | | | $ | 0.31 | | |
| | | | | | | | | |
| (1) Primarily related to mark-to-market of the equity warrants received as part of the Safanad/HC-One transaction that closed in 2021. | |
| (2) Primarily related to the extinguishment of secured debt. | |
| (3) Primarily related to reserves for loan losses under the current expected credit losses accounting standard. | |
| (4) Primarily related to the release of previously reserved straight-line receivables. | | | | | | | | | |
| (5) Primarily related to non-capitalizable transaction costs, including an accrual for non-capitalizable promotes, and legal fees and accrued litigation settlements. | |
(6) Effective April 1, 2022, our leasehold interest relating to the master lease with National Health Investors ("NHI") for 17 properties assumed in conjunction with the Holiday Retirement acquisition was terminated as a result of the transition or sale of the properties by NHI. We recognized a gain of $58,621,000 related to the termination of this lease in other income. The net impact of these leasehold properties, inclusive of the gain, has been excluded from normalized FFO. | |
| (7) Primarily relates to casualty losses net of any insurance recoveries. | |
| (8) Primarily relates to foreign currency gains and losses related to accrued interest on intercompany loans and third party debt denominated in a foreign currency. | |
| (9) Primarily related to our share of non-capitalizable transaction costs on unconsolidated entities. | |
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| Outlook Reconciliation: Quarter Ending September 30, 2022 | Exhibit 3 | |
| (in millions, except per share data) | | | | | Current Outlook | |
| | | | | | | Low | | High | |
| FFO Reconciliation: | | | | | | | | | |
| Net income attributable to common stockholders | | | | | | $ | 57 | | | $ | 81 | | |
| | | | | | | | | |
Depreciation and amortization(1) | | | | | | 334 | | | 334 | | |
| NAREIT FFO and Normalized FFO attributable to common stockholders | | | | | | $ | 391 | | | $ | 415 | | |
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| | | | | | | | | |
| | | | | | | | | | |
| Diluted per share data attributable to common stockholders: | | | | | | | | | |
| Net income | | | | | | $ | 0.12 | | | $ | 0.17 | | |
| NAREIT FFO and Normalized FFO | | | | | | $ | 0.82 | | | $ | 0.87 | | |
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Other items:(1) | | | | | | | | | |
| Net straight-line rent and above/below market rent amortization | | | | | | $ | (25) | | | $ | (25) | | |
| Non-cash interest expenses | | | | | | 6 | | | 6 | | |
| Recurring cap-ex, tenant improvements, and lease commissions | | | | | | (49) | | | (49) | | |
| Stock-based compensation | | | | | | 5 | | | 5 | | |
| | |
| (1) Amounts presented net of noncontrolling interests' share and Welltower's share of unconsolidated entities. | |
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| 2Q22 Earnings Release | | August 9, 2022 |
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| SSNOI Reconciliation | | | | | | Exhibit 4 | |
| (in thousands) | | Three Months Ended | | | |
| | | June 30, | | | |
| | | 2022 | | 2021 | | % growth | |
| Net income (loss) | | $ | 95,672 | | | $ | 45,757 | | | | |
| Loss (gain) on real estate dispositions, net | | 3,532 | | | (44,668) | | | | |
| Loss (income) from unconsolidated entities | | 7,058 | | | 7,976 | | | | |
| Income tax expense (benefit) | | 3,065 | | | (2,221) | | | | |
| Other expenses | | 35,166 | | | 11,687 | | | | |
| Impairment of assets | | — | | | 23,692 | | | | |
| Provision for loan losses | | 165 | | | 6,197 | | | | |
| Loss (gain) on extinguishment of debt, net | | 603 | | | 55,612 | | | | |
| Loss (gain) on derivatives and financial instruments, net | | (1,407) | | | (359) | | | | |
| General and administrative expenses | | 36,554 | | | 31,436 | | | | |
| Depreciation and amortization | | 310,295 | | | 240,885 | | | | |
| Interest expense | | 127,750 | | | 122,341 | | | | |
| Consolidated NOI | | 618,453 | | | 498,335 | | | | |
NOI attributable to unconsolidated investments(1) | | 23,648 | | | 21,180 | | | | |
NOI attributable to noncontrolling interests(2) | | (82,804) | | | (43,786) | | | | |
| Pro rata NOI | | 559,297 | | | 475,729 | | | | |
Non-cash NOI attributable to same store properties | | (22,628) | | | (4,477) | | | | |
NOI attributable to non-same store properties | | (117,823) | | | (91,094) | | | | |
Currency and ownership adjustments(3) | | 1,696 | | | 256 | | | | |
Normalizing adjustments, net(4) | | (14,780) | | | (7,061) | | | | |
| Same Store NOI (SSNOI) | | $ | 405,762 | | | $ | 373,353 | | | 8.7% | |
| | | | | | | |
| Seniors Housing Operating | | 154,230 | | | 133,684 | | | 15.4% | |
| Seniors Housing Triple-net | | 84,320 | | | 76,692 | | | 9.9% | |
| Outpatient Medical | | 101,848 | | | 99,372 | | | 2.5% | |
| Health System | | 42,954 | | | 41,804 | | | 2.8% | |
| Long-Term/Post-Acute Care | | 22,410 | | | 21,801 | | | 2.8% | |
Total SSNOI | | $ | 405,762 | | | $ | 373,353 | | | 8.7% | |
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| 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 and includes an adjustment to remove NOI related to certain leasehold properties. See Exhibit 2 for more information. | |
| (3) Includes adjustments to reflect consistent property ownership percentages and foreign currency exchange rates for properties in the U.K. and Canada. | |
| (4) Includes other adjustments described in the accompanying Supplement. | |
| | | | | | | | |
| 2Q22 Earnings Release | | August 9, 2022 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of SHO SS REVPOR Growth | | Exhibit 5 | | | | | |
| (in thousands except SS REVPOR) | | | | | | | Three Months Ended | | | |
| | | | | | | June 30, | | | |
| | | | | | | | | | | | | 2022 | | 2021 | | | | | |
| Consolidated SHO revenues | | | | | | | | | | | | | $ | 1,071,210 | | | $ | 742,549 | | | | | | |
Unconsolidated SHO revenues attributable to WELL(1) | | | | | | | | | | | | | 51,456 | | | 44,966 | | | | | | |
SHO revenues attributable to noncontrolling interests(2) | | | | | | | | | | | | | (121,704) | | | (59,347) | | | | | | |
SHO pro rata revenues(3) | | | | | | | | | | | | | 1,000,962 | | | 728,168 | | | | | | |
| Non-cash revenues on same store properties | | | | | | | | | | | | | (613) | | | (571) | | | | | | |
| Revenues attributable to non-same store properties | | | | | | | | | | | | | (306,259) | | | (100,881) | | | | | | |
Currency and ownership adjustments(4) | | | | | | | | | | | | | 1,989 | | | (2,682) | | | | | | |
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SHO SS revenues(5) | | | | | | | | | | | | | $ | 696,079 | | | $ | 624,034 | | | | | | |
| SHO SS revenue YOY growth | | | | | | | | | | | | | 11.5 | % | | | | | | | |
Average occupied units/month(6) | | | | | | | | | | | | | 41,469 | | | 38,854 | | | | | | |
SHO SS REVPOR(7) | | | | | | | | | | | | | $ | 5,611 | | | $ | 5,368 | | | | | | |
| SS REVPOR YOY growth | | | | | | | | | | | | | 4.5 | % | | | | | | | |
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(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 and includes an adjustment to remove revenues related to certain leasehold properties. See Exhibit 2 for more information. | |
| (3) Represents SHO revenues at Welltower pro rata ownership. | | | | | |
(4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.2738 and to translate UK properties at a GBP/USD rate of 1.3501. | |
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| (5) Represents SS SHO revenues at Welltower pro rata ownership. | | | | | |
| (6) Represents average occupied units for SS properties on a pro rata basis. | | | | | |
| (7) Represents pro rata SS average revenues generated per occupied room per month. | | | | | |
| | | | | |
Overview | |
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Portfolio | |
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Investment | |
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Financial | |
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Glossary | |
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Supplemental Reporting Measures | |
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Forward Looking Statements and Risk Factors
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| (dollars and occupancy at Welltower pro rata ownership; dollars in thousands) | | |
Portfolio Composition(1) | | Beds/Unit Mix |
| Average Age | | Properties | | Total | | Wellness Housing | | Independent Living | | Assisted Living | | Memory Care | | Long-Term/ Post-Acute Care |
| Seniors Housing Operating | 19 | | 904 | | 106,294 | | 14,196 | | 43,820 | | 33,769 | | 13,631 | | 878 |
| Seniors Housing Triple-net | 12 | | 312 | | 25,900 | | — | | 5,333 | | 14,171 | | 6,127 | | 269 |
| Outpatient Medical | 17 | | 397 | | 23,569,312 | (2) | n/a | | n/a | | n/a | | n/a | | n/a |
| Health System | 31 | | 205 | | 24,485 | | — | | 201 | | 517 | | 3,145 | | 20,622 |
| Long-Term/Post-Acute Care | 18 | | 93 | | 10,663 | | — | | — | | 723 | | 10 | | 9,930 |
| Total | 18 | | 1,911 | | | | | | | | | | | | |
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| NOI Performance | Same Store(3) | | In-Place Portfolio(4) | |
| | Properties | | 2Q21 NOI | | 2Q22 NOI | | % Change | | Properties | | Annualized
In-Place NOI | | % of Total | |
| Seniors Housing Operating | 532 | | $ | 133,684 | | | $ | 154,230 | | | 15.4 | % | | 835 | | $ | 895,796 | | | 45.6 | % | |
Seniors Housing Triple-net(5) | 282 | | 76,692 | | | 84,320 | | 9.9 | % | | 302 | | 367,496 | | | 18.7 | % | |
| Outpatient Medical | 351 | | 99,372 | | 101,848 | | 2.5 | % | | 384 | | 440,320 | | | 22.4 | % | |
| Health System | 200 | | | 41,804 | | | 42,954 | | | 2.8 | % | | 201 | | | 172,104 | | | 8.8 | % | |
Long-Term/Post-Acute Care(5) | 76 | | 21,801 | | 22,410 | | 2.8 | % | | 79 | | 89,216 | | | 4.5 | % | |
| Total | 1,441 | | $ | 373,353 | | | $ | 405,762 | | | 8.7 | % | | 1,801 | | $ | 1,964,932 | | | 100.0 | % | |
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| Portfolio Performance | | | | Facility Revenue Mix |
Stable Portfolio(6) | Occupancy | | EBITDAR Coverage(7) | | EBITDARM Coverage(7) | | Private Pay | | Medicaid | | Medicare | | Other Government(8) |
| Seniors Housing Operating | 78.2 | % | | n/a | | n/a | | 97.9 | % | | 1.3 | % | | -0.2 | % | | 1.0 | % |
| Seniors Housing Triple-net | 77.7 | % | | 0.83 | | 1.01 | | 89.0 | % | | 3.9 | % | | 0.9 | % | | 6.2 | % |
| Outpatient Medical | 94.8 | % | | n/a | | n/a | | 100.0 | % | | — | | | — | | | — | |
| Health System | 74.4 | % | | -0.29 | | 0.32 | | 40.8 | % | | 40.0 | % | | 19.2 | % | | — | % |
| Long-Term/Post-Acute Care | 78.9 | % | | 1.31 | | 1.58 | | 28.4 | % | | 31.4 | % | | 40.2 | % | | — | % |
| Total | | | 0.55 | | 0.88 | | 94.4 | % | | 3.1 | % | | 1.3 | % | | 1.2 | % |
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Notes:
(1) Includes land parcels and properties under development.
(2) Indicates the total square footage of Outpatient Medical.
(3) See pages 21 and 22 for reconciliation.
(4) Excludes land parcels, loans, developments and investments held for sale. See page 21 for reconciliation.
(5) Same store NOI for these property types represents cash rent excluding the impact of expansions.
(6) Data as of June 30, 2022 for Seniors Housing Operating and Outpatient Medical and March 31, 2022 for remaining asset types.
(7) Represents trailing twelve month coverage metrics.
(8) Represents various federal and local reimbursement programs in the United Kingdom and Canada.
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| (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 | 125 | | | $ | 183,727 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 183,727 | | | 9.4 | % |
| ProMedica | 201 | | | — | | | — | | | — | | | 172,104 | | | — | | | 172,104 | | | 8.8 | % |
| Cogir Management Corporation | 47 | | | 80,975 | | | — | | | — | | | — | | | — | | | 80,975 | | | 4.1 | % |
| Atria Senior Living | 93 | | | 80,470 | | | — | | | — | | | — | | | — | | | 80,470 | | | 4.1 | % |
| Avery Healthcare | 55 | | | 5,992 | | | 65,674 | | | — | | | — | | | — | | | 71,666 | | | 3.6 | % |
| Belmont Village | 21 | | | 65,483 | | | — | | | — | | | — | | | — | | | 65,483 | | | 3.3 | % |
| Brookdale Senior Living | 85 | | | (576) | | | 63,499 | | | — | | | — | | | — | | | 62,923 | | | 3.2 | % |
| Senior Resource Group | 28 | | | 46,287 | | | — | | | — | | | — | | | — | | | 46,287 | | | 2.4 | % |
| Brandywine Living | 24 | | | 45,831 | | | — | | | — | | | — | | | — | | | 45,831 | | | 2.3 | % |
| Revera | 78 | | | 45,312 | | | — | | | — | | | — | | | — | | | 45,312 | | | 2.3 | % |
| Remaining | 1,044 | | | 342,295 | | | 238,323 | | | 440,320 | | | — | | | 89,216 | | | 1,110,154 | | | 56.5 | % |
| Total | 1,801 | | | $ | 895,796 | | | $ | 367,496 | | | $ | 440,320 | | | $ | 172,104 | | | $ | 89,216 | | | $ | 1,964,932 | | | 100.0 | % |
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| By Country: | | | | | | | | | | | | | | | |
| United States | 1,530 | | | $ | 703,957 | | | $ | 293,446 | | | $ | 440,320 | | | $ | 172,104 | | | $ | 82,016 | | | $ | 1,691,843 | | | 86.1 | % |
| Canada | 118 | | | 130,704 | | | 3,669 | | | — | | | — | | | 7,200 | | | 141,573 | | | 7.2 | % |
| United Kingdom | 153 | | | 61,135 | | | 70,381 | | | — | | | — | | | — | | | 131,516 | | | 6.7 | % |
| Total | 1,801 | | | $ | 895,796 | | | $ | 367,496 | | | $ | 440,320 | | | $ | 172,104 | | | $ | 89,216 | | | $ | 1,964,932 | | | 100.0 | % |
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| By MSA: | | | | | | | | | | | | | | | |
| New York | 82 | | $ | 64,590 | | | $ | 28,206 | | | $ | 36,329 | | | $ | 5,863 | | | $ | 2,401 | | | $ | 137,389 | | | 7.0 | % |
| Los Angeles | 72 | | 67,603 | | | 19,274 | | | 35,995 | | | — | | | — | | | 122,872 | | | 6.3 | % |
| Dallas | 60 | | 36,070 | | | 3,272 | | | 28,866 | | | 862 | | | 4,123 | | | 73,193 | | | 3.7 | % |
| Washington D.C. | 42 | | 43,731 | | | 1,454 | | | 6,908 | | | 11,348 | | | 2,819 | | | 66,260 | | | 3.4 | % |
| Philadelphia | 46 | | 11,895 | | | 1,590 | | | 24,200 | | | 21,579 | | | 466 | | | 59,730 | | | 3.0 | % |
| Greater London | 50 | | 37,952 | | | 16,260 | | | — | | | — | | | — | | | 54,212 | | | 2.8 | % |
| San Francisco | 22 | | 30,072 | | | 10,456 | | | 2,701 | | | 4,976 | | | — | | | 48,205 | | | 2.5 | % |
| Chicago | 43 | | 16,224 | | | 7,010 | | | 5,524 | | | 11,122 | | | — | | | 39,880 | | | 2.0 | % |
| Houston | 32 | | 7,567 | | | 2,234 | | | 28,882 | | | — | | | — | | | 38,683 | | | 2.0 | % |
| San Diego | 18 | | 20,405 | | | 6,631 | | | 8,647 | | | — | | | 2,827 | | | 38,510 | | | 2.0 | % |
| Montréal | 23 | | 37,165 | | | — | | | — | | | — | | | — | | | 37,165 | | | 1.9 | % |
| Boston | 25 | | 24,629 | | | 5,038 | | | 2,484 | | | — | | | — | | | 32,151 | | | 1.6 | % |
| Charlotte | 26 | | 1,309 | | | 9,997 | | | 20,788 | | | — | | | — | | | 32,094 | | | 1.6 | % |
| Raleigh | 13 | | 8,139 | | | 18,068 | | | 3,140 | | | — | | | — | | | 29,347 | | | 1.5 | % |
| Seattle | 29 | | 8,884 | | | 3,315 | | | 15,385 | | | 1,515 | | | — | | | 29,099 | | | 1.5 | % |
| Minneapolis | 20 | | (1,240) | | | 15,960 | | | 13,725 | | | — | | | — | | | 28,445 | | | 1.4 | % |
| Toronto | 25 | | 26,303 | | | — | | | — | | | — | | | — | | | 26,303 | | | 1.3 | % |
| Miami | 36 | | 3,271 | | | — | | | 15,470 | | | 5,920 | | | — | | | 24,661 | | | 1.3 | % |
| Portland, OR | 13 | | 21,192 | | | — | | | — | | | 2,702 | | | — | | | 23,894 | | | 1.2 | % |
| Atlanta | 26 | | 1,923 | | | — | | | 18,780 | | | 2,051 | | | — | | | 22,754 | | | 1.2 | % |
| Remaining | 1,098 | | | 428,112 | | 218,731 | | 172,496 | | 104,166 | | 76,580 | | 1,000,085 | | | 50.8 | % |
| Total | 1,801 | | | $ | 895,796 | | | $ | 367,496 | | | $ | 440,320 | | | $ | 172,104 | | | $ | 89,216 | | | $ | 1,964,932 | | | 100.0 | % |
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Notes:
(1) Represents current quarter annualized In-Place NOI. See page 21 for reconciliation.
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| (dollars, units and occupancy at Welltower pro rata ownership; dollars in thousands) |
| Seniors Housing Operating | | | | | | | | |
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Total Portfolio Performance(1) | | 2Q21 | | 3Q21 | | 4Q21 | | 1Q22 | | 2Q22 |
| Properties | | | 630 | | | 736 | | | 755 | | | 805 | | | 836 | |
| Units | | | 59,670 | | | 71,721 | | | 76,105 | | | 80,402 | | | 84,782 | |
| Total occupancy | | | 73.0 | % | | 74.9 | % | | 76.3 | % | | 76.3 | % | | 77.1 | % |
| Total revenues | | | $ | 728,235 | | | $ | 812,096 | | | $ | 877,564 | | | $ | 969,979 | | | $ | 1,000,962 | |
| Operating expenses | | | 584,484 | | | 644,241 | | | 698,601 | | | 774,936 | | | 777,178 | |
| NOI | | | $ | 143,751 | | | $ | 167,855 | | | $ | 178,963 | | | $ | 195,043 | | | $ | 223,784 | |
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| Recurring cap-ex | | | $ | 14,448 | | | $ | 15,395 | | | $ | 28,057 | | | $ | 23,325 | | | $ | 26,806 | |
| Other cap-ex | | | $ | 31,794 | | | $ | 35,588 | | | $ | 51,168 | | | $ | 45,988 | | | $ | 57,225 | |
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Same Store Performance(2) | | 2Q21 | | 3Q21 | | 4Q21 | | 1Q22 | | 2Q22 |
| Properties | | | 532 | | | 532 | | | 532 | | | 532 | | | 532 | |
| Occupancy | | | 73.8 | % | | 76.0 | % | | 77.5 | % | | 77.8 | % | | 78.8 | % |
| Same store revenues | | | $ | 624,034 | | | $ | 646,852 | | | $ | 664,772 | | | $ | 680,545 | | | $ | 696,079 | |
| Compensation | | | 291,396 | | | 309,017 | | | 325,064 | | | 325,320 | | | 329,476 | |
| Utilities | | | 26,416 | | | 30,655 | | | 29,932 | | | 33,892 | | | 29,822 | |
| Food | | | 23,482 | | | 24,922 | | | 25,923 | | | 25,767 | | | 27,539 | |
| Repairs and maintenance | | 16,891 | | | 18,163 | | | 19,611 | | | 18,791 | | | 18,308 | |
| Property taxes | | | 27,352 | | | 27,156 | | | 24,345 | | | 27,673 | | | 27,536 | |
| All other | | | 104,813 | | | 103,366 | | | 111,372 | | | 107,864 | | | 109,168 | |
| Same store operating expenses | | 490,350 | | | 513,279 | | | 536,247 | | | 539,307 | | | 541,849 | |
| Same store NOI | | | $ | 133,684 | | | $ | 133,573 | | | $ | 128,525 | | | $ | 141,238 | | | $ | 154,230 | |
| Same store NOI margin % | | | 21.4 | % | | 20.6 | % | | 19.3 | % | | 20.8 | % | | 22.2 | % |
| Year over year NOI growth rate | | | | | | | | | | | 15.4 | % |
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| Partners | | Properties(3) | | Pro Rata Units(3) | | Welltower Ownership %(4) | | Core Markets | | 2Q22 NOI | | % of Total |
| Sunrise Senior Living | | 125 | | | 10,067 | | | 100.0 | % | | Southern California | | $ | 26,392 | | | 11.8 | % |
| Cogir Management Corporation | | 47 | | | 6,969 | | | 88.9 | % | | Northern California | | 17,604 | | | 7.9 | % |
| Atria Senior Living | | 93 | | | 11,296 | | | 100.0 | % | | New York / New Jersey | | 15,799 | | | 7.1 | % |
| Belmont Village | | 21 | | | 2,804 | | | 95.0 | % | | Washington D.C. | | 12,176 | | | 5.4 | % |
| Brandywine Living | | 28 | | | 2,651 | | | 99.5 | % | | Greater London | | 9,504 | | | 4.2 | % |
| Senior Resource Group | | 24 | | | 3,268 | | | 62.3 | % | | Montréal | | 8,032 | | | 3.6 | % |
| Revera | | 78 | | | 7,262 | | | 75.0 | % | | Toronto | | 6,305 | | | 2.8 | % |
| Chartwell Retirement Residences | | 42 | | | 4,479 | | | 50.2 | % | | Boston | | 5,649 | | | 2.5 | % |
| Signature Senior Lifestyle | | 33 | | | 2,401 | | | 85.9 | % | | Seattle | | 2,577 | | | 1.2 | % |
| Clover Management | | 33 | | | 3,630 | | | 90.5 | % | | Birmingham, UK | | 2,154 | | | 1.0 | % |
| Oakmont Management Group | | 16 | | | 1,545 | | | 100.0 | % | | Vancouver | | 1,954 | | | 0.9 | % |
| Legend Senior Living | | 37 | | | 2,809 | | | 93.3 | % | | Ottawa | | 1,582 | | | 0.7 | % |
| Frontier Management | | 62 | | | 3,599 | | | 96.2 | % | | Manchester, UK | | 1,507 | | | 0.7 | % |
| Sagora Senior Living | | 14 | | | 1,483 | | | 93.4 | % | | Core Markets | | 111,235 | | | 49.8 | % |
| Remaining | | 182 | | | 20,473 | | | | | All Other | | 112,549 | | | 50.2 | % |
| Total | | 835 | | | 84,736 | | | | | Total | | $ | 223,784 | | | 100.0 | % |
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Notes:
(1) Properties, units and occupancy exclude land parcels and properties under development.
(2) See pages 21 and 22 for reconciliation.
(3) Represents In-Place Portfolio.
(4) Welltower ownership percentage weighted based on In-Place NOI. See page 21 for reconciliation.
(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 2.9% of our total annualized In-Place NOI (IPNOI).
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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 | 36 / 4,051 | $ | 67,603 | | 9.6 | % | 8 / 1,136 | 8 / 752 | $ | 11,324 | | 1.2 | % | 8.8 | % | 6,744 | | $ | 107,573 | | $ | 1,111,307 | | 1.7 | % | | 5.2 | % |
| New York | 38 / 3,495 | 64,590 | | 9.2 | % | 6 / 1,011 | 5 / 380 | 9,924 | | 5.1 | % | 9.6 | % | 5,697 | | 126,926 | | 592,189 | | 3.1 | % | | 5.5 | % |
| Washington D.C. | 17 / 1,967 | 43,731 | | 6.2 | % | 2 / 252 | 3 / 286 | 2,087 | | 3.5 | % | 11.9 | % | 5,512 | | 136,257 | | 795,183 | | 4.5 | % | | 4.4 | % |
| Dallas | 30 / 3,558 | 36,070 | | 5.1 | % | 7 / 946 | 6 / 870 | 8,160 | | 6.3 | % | 28.7 | % | 3,240 | | 95,494 | | 362,758 | | 1.9 | % | | 7.7 | % |
| San Francisco | 14 / 1,743 | 30,072 | | 4.3 | % | — | | — | | — | | 2.7 | % | 10.0 | % | 8,558 | | 147,831 | | 1,326,771 | | (1.3) | % | | 5.8 | % |
| Boston | 18 / 1,446 | 24,629 | | 3.5 | % | 2 / 178 | 2 / 169 | 1,761 | | 4.4 | % | 9.2 | % | 2,669 | | 136,873 | | 779,589 | | 4.7 | % | | 4.7 | % |
| Portland, OR | 12 / 1,636 | 21,192 | | 3.0 | % | 3 / 647 | 4 / 289 | 2,461 | | 5.5 | % | 16.2 | % | 2,934 | | 86,707 | | 433,160 | | 4.8 | % | | 5.1 | % |
| San Diego | 8 / 1,033 | 20,405 | | 2.9 | % | — | | — | | — | | 2.2 | % | 13.1 | % | 4,634 | | 122,777 | | 1,029,317 | | (0.5) | % | | 5.9 | % |
| Chicago | 19 / 2,174 | 16,224 | | 2.3 | % | 1 / 177 | 1 / 131 | 96 | | 1.3 | % | 10.4 | % | 2,879 | | 107,444 | | 387,935 | | (0.1) | % | | 4.7 | % |
| Boulder, CO | 6 / 570 | 13,468 | | 1.9 | % | — | | — | | — | | 4.5 | % | 23.2 | % | 2,196 | | 104,744 | | 732,685 | | N/A | | 5.1 | % |
| Sacramento | 8 / 636 | 12,624 | | 1.8 | % | — | | — | | — | | 3.1 | % | 12.4 | % | 3,683 | | 109,194 | | 592,678 | | (0.4) | % | | 4.5 | % |
| Philadelphia | 12 / 957 | 11,895 | | 1.7 | % | 2 / 249 | 1 / 94 | 1,852 | | 3.6 | % | 7.1 | % | 2,167 | | 117,084 | | 399,376 | | (0.1) | % | | 4.0 | % |
| Denver | 6 / 857 | 11,499 | | 1.6 | % | 5 / 670 | 3 / 487 | 2,802 | | 5.6 | % | 24.5 | % | 4,927 | | 99,076 | | 643,361 | | 1.3 | % | | 4.7 | % |
| Tucson | 5 / 930 | 10,853 | | 1.5 | % | — | | — | | — | | -4.8 | % | -3.6 | % | 2,038 | | 60,676 | | 254,616 | | (1.3) | % | | 3.2 | % |
| Buffalo | 13 / 1,546 | 10,757 | | 1.5 | % | — | | — | | — | | 5.6 | % | 8.4 | % | 2,582 | | 76,953 | | 206,192 | | (3.7) | % | | 4.0 | % |
| San Antonio | 4 / 1,075 | 9,937 | | 1.4 | % | — | | — | | — | | 6.9 | % | 27.4 | % | 2,465 | | 81,936 | | 301,356 | | 1.1 | % | | 4.6 | % |
| San Jose | 4 / 480 | 9,700 | | 1.4 | % | 2 / 206 | 1 / 137 | 2,285 | | 2.2 | % | 11.3 | % | 6,744 | | 159,903 | | 1,697,790 | | 1.0 | % | | 5.1 | % |
| Seattle | 16 / 1,693 | 8,884 | | 1.3 | % | 1 / 79 | 1 / 193 | 397 | | 6.1 | % | 17.4 | % | 4,966 | | 106,106 | | 651,022 | | (0.4) | % | | 5.3 | % |
| Sarasota | 7 / 1,034 | 8,608 | | 1.2 | % | 1 / 70 | 1 / 182 | 33 | | 6.0 | % | 8.8 | % | 2,113 | | 79,562 | | 355,832 | | 3.4 | % | | 6.8 | % |
| Charlottesville, VA | 1 / 302 | 8,247 | | 1.2 | % | — | | — | | — | | 2.7 | % | 10.3 | % | 2,089 | | 64,142 | | 409,459 | | N/A | | 2.8 | % |
| Raleigh | 2 / 250 | 8,139 | | 1.2 | % | 1 / 138 | 1 / 176 | 2,801 | | 4.2 | % | 23.7 | % | 3,210 | | 98,555 | | 370,974 | | 13.4 | % | | 4.3 | % |
| Santa Rosa, CA | 4 / 514 | 7,974 | | 1.1 | % | — | | — | | — | | 0.4 | % | 5.5 | % | 2,016 | | 97,736 | | 800,663 | | N/A | | 4.4 | % |
| Houston | 10 / 953 | 7,567 | | 1.1 | % | — | | — | | — | | 5.8 | % | 23.6 | % | 3,484 | | 86,922 | | 446,808 | | (0.1) | % | | 6.1 | % |
| Pittsburgh | 6 / 668 | 7,509 | | 1.1 | % | — | | — | | — | | 2.0 | % | 8.3 | % | 1,929 | | 96,011 | | 253,431 | | (2.0) | % | | 3.0 | % |
| Riverside | 6 / 770 | 7,240 | | 1.0 | % | — | | — | | — | | 2.7 | % | 11.8 | % | 2,840 | | 102,418 | | 608,660 | | 0.7 | % | | 5.4 | % |
| Total - Top 25 | 302 / 34,338 | $ | 479,417 | | 68.1 | % | 41 / 5,759 | 37 / 4,146 | $ | 45,983 | | 3.8 | % | 13.4 | % | 4,311 | | $ | 112,229 | | $ | 713,410 | | 1.8 | % | | 5.2 | % |
| All Other US SHO Markets | 323 / 35,129 | 224,540 | | 31.9 | % | 17 / 2,218 | 18 / 2,419 | 10,566 | | 3.3 | % | 11.3 | % | 2,285 | | 81,002 | | 370,199 | | | | |
| Total US SHO | 625 / 69,467 | $ | 703,957 | | 100.0 | % | 58 / 7,977 | 55 / 6,565 | $ | 56,549 | | 3.6 | % | 12.3 | % | 3,261 | | $ | 101,908 | | $ | 599,977 | | | | |
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| % of Total IPNOI | | | | | | 2.9 | % | | | | | | | | |
| US National Average | | | | | | 3.2 | % | 10.8 | % | 94 | $ | 72,039 | | $ | 273,858 | | 1.7 | % | (10) | 4.5 | % |
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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 21 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 2022-2027.
(6) Average population density data represents average population per square mile within a 3-mile ring based on 2022 Claritas estimates.
(7) Household income and household value data are medians weighted by IPNOI.
(8) NIC MAP Data and Analysis Service, 2Q22. 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 2021 - May 2022 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.
(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 high barriers to entry. New supply in a 5-mile ring around our properties potentially impacts just 5.6% of our total annualized In-Place NOI (IPNOI).
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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 | 36 / 4,051 | $ | 67,603 | | 9.6 | % | 11 / 1,576 | 18 / 1,918 | $ | 17,839 | | 1.2 | % | 9.4 | % | 6,500 | | $ | 100,097 | | $ | 1,034,600 | | 1.7 | % | | 5.2 | % |
| New York | 38 / 3,495 | 64,590 | | 9.2 | % | 12 / 1,709 | 13 / 1,213 | 19,818 | | 5.2 | % | 9.7 | % | 5,238 | | 121,501 | | 575,810 | | 3.1 | % | | 5.5 | % |
| Washington D.C. | 17 / 1,967 | 43,731 | | 6.2 | % | 4 / 616 | 7 / 669 | 3,519 | | 3.4 | % | 12.2 | % | 5,336 | | 131,836 | | 785,219 | | 4.5 | % | | 4.4 | % |
| Dallas | 30 / 3,558 | 36,070 | | 5.1 | % | 13 / 1,761 | 13 / 1,630 | 13,450 | | 6.2 | % | 27.9 | % | 2,895 | | 89,730 | | 352,390 | | 1.9 | % | | 7.7 | % |
| San Francisco | 14 / 1,743 | 30,072 | | 4.3 | % | — | | — | | — | | 2.7 | % | 10.7 | % | 7,239 | | 147,654 | | 1,257,632 | | (1.3) | % | | 5.8 | % |
| Boston | 18 / 1,446 | 24,629 | | 3.5 | % | 4 / 557 | 6 / 546 | 7,320 | | 4.5 | % | 10.1 | % | 2,657 | | 130,638 | | 731,239 | | 4.7 | % | | 4.7 | % |
| Portland, OR | 12 / 1,636 | 21,192 | | 3.0 | % | 4 / 898 | 6 / 721 | 5,645 | | 5.3 | % | 15.8 | % | 2,441 | | 86,156 | | 433,085 | | 4.8 | % | | 5.1 | % |
| San Diego | 8 / 1,033 | 20,405 | | 2.9 | % | 1 / 180 | 1 / 50 | 100 | | 2.3 | % | 11.9 | % | 4,310 | | 121,555 | | 973,224 | | (0.5) | % | | 5.9 | % |
| Chicago | 19 / 2,174 | 16,224 | | 2.3 | % | 2 / 193 | 2 / 189 | 344 | | 1.2 | % | 10.7 | % | 2,683 | | 109,218 | | 391,570 | | (0.1) | % | | 4.7 | % |
| Boulder, CO | 6 / 570 | 13,468 | | 1.9 | % | — | | — | | — | | 5.0 | % | 22.4 | % | 1,423 | | 110,386 | | 729,601 | | N/A | | 5.1 | % |
| Sacramento | 8 / 636 | 12,624 | | 1.8 | % | 1 / 145 | 1 / 115 | 458 | | 3.1 | % | 12.7 | % | 3,323 | | 103,142 | | 554,450 | | (0.4) | % | | 4.5 | % |
| Philadelphia | 12 / 957 | 11,895 | | 1.7 | % | 3 / 333 | 3 / 251 | 2,643 | | 3.6 | % | 7.3 | % | 2,367 | | 100,401 | | 358,259 | | (0.1) | % | | 4.0 | % |
| Denver | 6 / 857 | 11,499 | | 1.6 | % | 6 / 751 | 4 / 576 | 5,680 | | 5.4 | % | 22.8 | % | 4,535 | | 93,760 | | 595,817 | | 1.3 | % | | 4.7 | % |
| Tucson | 5 / 930 | 10,853 | | 1.5 | % | — | | — | | — | | -4.7 | % | -2.7 | % | 1,822 | | 60,345 | | 265,654 | | (1.3) | % | | 3.2 | % |
| Buffalo | 13 / 1,546 | 10,757 | | 1.5 | % | — | | — | | — | | 5.4 | % | 8.6 | % | 2,407 | | 72,094 | | 195,713 | | (3.7) | % | | 4.0 | % |
| San Antonio | 4 / 1,075 | 9,937 | | 1.4 | % | 1 / 231 | 1 / 162 | 1,886 | | 6.9 | % | 26.7 | % | 2,310 | | 80,839 | | 286,522 | | 1.1 | % | | 4.6 | % |
| San Jose | 4 / 480 | 9,700 | | 1.4 | % | 3 / 309 | 2 / 280 | 5,340 | | 2.2 | % | 11.3 | % | 5,754 | | 166,496 | | 1,707,645 | | 1.0 | % | | 5.1 | % |
| Seattle | 16 / 1,693 | 8,884 | | 1.3 | % | 4 / 484 | 5 / 666 | 3,888 | | 6.2 | % | 19.4 | % | 4,389 | | 111,025 | | 705,774 | | (0.4) | % | | 5.3 | % |
| Sarasota | 7 / 1,034 | 8,608 | | 1.2 | % | 3 / 455 | 5 / 445 | 1,211 | | 5.7 | % | 8.8 | % | 1,822 | | 76,201 | | 343,751 | | 3.4 | % | | 6.8 | % |
| Charlottesville, VA | 1 / 302 | 8,247 | | 1.2 | % | — | | — | | — | | 3.9 | % | 12.6 | % | 1,489 | | 81,795 | | 428,169 | | N/A | | 2.8 | % |
| Raleigh | 2 / 250 | 8,139 | | 1.2 | % | 1 / 138 | 1 / 176 | 2,801 | | 4.9 | % | 29.4 | % | 2,681 | | 106,552 | | 415,909 | | 13.4 | % | | 4.3 | % |
| Santa Rosa, CA | 4 / 514 | 7,974 | | 1.1 | % | 2 / 222 | 1 / 90 | 527 | | 0.6 | % | 6.7 | % | 1,119 | | 98,134 | | 820,974 | | N/A | | 4.4 | % |
| Houston | 10 / 953 | 7,567 | | 1.1 | % | — | | — | | — | | 6.1 | % | 26.4 | % | 3,474 | | 83,177 | | 345,982 | | (0.1) | % | | 6.1 | % |
| Pittsburgh | 6 / 668 | 7,509 | | 1.1 | % | — | | — | | — | | 2.2 | % | 7.0 | % | 1,807 | | 94,024 | | 245,965 | | (2.0) | % | | 3.0 | % |
| Riverside | 6 / 770 | 7,240 | | 1.0 | % | — | | — | | — | | 2.7 | % | 12.5 | % | 2,271 | | 86,327 | | 569,916 | | 0.7 | % | | 5.4 | % |
| Total - Top 25 | 302 / 34,338 | $ | 479,417 | | 68.1 | % | 75 / 10,558 | 89 / 9,697 | $ | 92,469 | | 3.9 | % | 13.7 | % | 3,960 | | $ | 108,862 | | $ | 686,254 | | 1.8 | % | | 5.2 | % |
| All Other US SHO Markets | 323 / 35,129 | 224,540 | 31.9 | % | 34 / 4,331 | 31 / 3,830 | 17,081 | | 3.2 | % | 11.7 | % | 1,913 | 77,428 | 359,550 | | | |
| Total US SHO | 625 / 69,467 | $ | 703,957 | | 100.0 | % | 109 / 14,889 | 120 / 13,527 | $ | 109,550 | | 3.5 | % | 12.6 | % | 2,899 | $ | 98,473 | | $ | 578,277 | | | | |
| | | | | | | | | | | | | | |
| % of Total IPNOI | | | | | 5.6 | % | | | | | | | | |
| US National Average | | | | | | 3.2 | % | 10.8 | % | 94 | $ | 72,039 | | $ | 273,858 | | 1.7 | % | (10) | 4.5 | % |
| | | | | | | | | | | | | | |
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 21 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 2022-2027.
(6) Average population density data represents average population per square mile within a 5-mile ring based on 2022 Claritas estimates.
(7) Household income and household value data are medians weighted by IPNOI.
(8) NIC MAP Data and Analysis Service, 2Q22. 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 2021 - May 2022 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.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (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 | 1.6 | % | | 0.1 | % | 1.7 | % | | 11 | | | 6 | | | 7.4 | % | | 0.9 | % | 8.3 | % | | 10 | | | 12 | |
| 0.85x - 0.95x | 4.7 | % | | 0.1 | % | 4.8 | % | | 8 | | | 3 | | | 1.2 | % | | — | % | 1.2 | % | | 12 | | | 2 | |
| 0.95x - 1.05x | 0.8 | % | | 0.8 | % | 1.6 | % | | 10 | | | 3 | | | 1.7 | % | | 1.4 | % | 3.1 | % | | 7 | | | 4 | |
| 1.05x - 1.15x | 1.4 | % | | — | % | 1.4 | % | | 15 | | | 2 | | | 0.1 | % | | — | % | 0.1 | % | | 9 | | | 1 | |
| 1.15x - 1.25x | 1.9 | % | | 0.5 | % | 2.4 | % | | 6 | | | 4 | | | 4.4 | % | | — | % | 4.4 | % | | 12 | | | 3 | |
| 1.25x - 1.35x | 3.3 | % | | 0.8 | % | 4.1 | % | | 12 | | | 2 | | | — | % | | 1.1 | % | 1.1 | % | | 8 | | | 1 | |
| > 1.35x | 1.1 | % | | 1.8 | % | 2.9 | % | | 10 | | | 6 | | | — | % | | 0.7 | % | 0.7 | % | | 5 | | | 3 | |
| Total | 14.8 | % | | 4.1 | % | 18.9 | % | | 10 | | | 26 | | | 14.8 | % | | 4.1 | % | 18.9 | % | | 10 | | | 26 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 |
| 2022 | | $ | — | | | $ | 28,741 | | | $ | — | | | $ | 1,319 | | | | | $ | 2,779 | | | $ | 32,839 | | | 2.7 | % |
| 2023 | | — | | | 48,867 | | | — | | | 840 | | | | | 7,641 | | | 57,348 | | | 4.8 | % |
| 2024 | | 12,109 | | | 59,772 | | | — | | | — | | | | | 23,774 | | | 95,655 | | | 8.0 | % |
| 2025 | | 5,290 | | | 32,226 | | | — | | | — | | | | | 3,311 | | | 40,827 | | | 3.4 | % |
| 2026 | | 58,419 | | | 43,913 | | | — | | | 9,402 | | | | | 85,456 | | | 197,190 | | | 16.5 | % |
| 2027 | | — | | | 35,778 | | | — | | | — | | | | | 684 | | | 36,462 | | | 3.0 | % |
| 2028 | | 4,799 | | | 26,201 | | | — | | | 19,382 | | | | | 82 | | | 50,464 | | | 4.2 | % |
| 2029 | | 3,970 | | | 23,845 | | | — | | | — | | | | | 1,139 | | | 28,954 | | | 2.4 | % |
| 2030 | | 15,714 | | | 29,439 | | | — | | | 27,678 | | | | | 141 | | | 72,972 | | | 6.1 | % |
| 2031 | | 16,866 | | | 44,898 | | | — | | | 4,139 | | | | | — | | | 65,903 | | | 5.5 | % |
| Thereafter | | 210,719 | | | 106,656 | | | 172,363 | | | 28,688 | | | | | 1,060 | | | 519,486 | | | 43.4 | % |
| | $ | 327,886 | | | $ | 480,336 | | | $ | 172,363 | | | $ | 91,448 | | | | | $ | 126,067 | | | $ | 1,198,100 | | | 100.0 | % |
| | | | | | | | | | | | | | | | |
| Weighted Avg Maturity Years | | 10 | | | 7 | | | 14 | | | 8 | | | | | 3 | | | 8 | | | |
| | | | | | | | | | | | | | | | |
Notes:
(1) Represents trailing twelve month coverage metrics as of March 31, 2022 for stable portfolio only. Agreements included represent 81% of total Seniors Housing Triple-net and Long-Term/Post-Acute Care In-Place NOI. See page 21 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.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars, square feet and occupancy at Welltower pro rata ownership; dollars in thousands except per square feet) |
| Outpatient Medical |
Total Portfolio Performance(1) | | 2Q21 | | 3Q21 | | 4Q21 | | 1Q22 | | 2Q22 |
| Properties | | 360 | | | 366 | | | 375 | | | 379 | | | 384 | |
| Square feet | | 17,291,495 | | | 17,383,040 | | | 17,572,561 | | | 18,079,918 | | | 18,452,459 | |
| Occupancy | | 94.8 | % | | 94.7 | % | | 94.8 | % | | 94.7 | % | | 94.5 | % |
| Total revenues | | $ | 160,514 | | | $ | 160,003 | | | $ | 161,022 | | | $ | 163,597 | | | $ | 166,220 | |
| Operating expenses | | 46,184 | | | 48,796 | | | 47,254 | | | 50,599 | | | 51,177 | |
| NOI | | $ | 114,330 | | | $ | 111,207 | | | $ | 113,768 | | | $ | 112,998 | | | $ | 115,043 | |
| NOI margin | | 71.2 | % | | 69.5 | % | | 70.7 | % | | 69.1 | % | | 69.2 | % |
| Revenues per square foot | | $ | 37.13 | | | $ | 36.82 | | | $ | 36.65 | | | $ | 36.19 | | | $ | 36.03 | |
| NOI per square foot | | $ | 26.45 | | | $ | 25.59 | | | $ | 25.90 | | | $ | 25.00 | | | $ | 24.94 | |
| Recurring cap-ex | | $ | 5,978 | | | $ | 7,327 | | | $ | 18,287 | | | $ | 9,141 | | | $ | 12,752 | |
| Other cap-ex | | $ | 2,014 | | | $ | 2,064 | | | $ | 4,738 | | | $ | 1,594 | | | $ | 2,303 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Same Store Performance(2) | | 2Q21 | | 3Q21 | | 4Q21 | | 1Q22 | | 2Q22 |
| Properties | | 351 | | | 351 | | | 351 | | | 351 | | | 351 | |
| Occupancy | | 94.9 | % | | 94.7 | % | | 94.8 | % | | 94.5 | % | | 94.8 | % |
| Same store revenues | | $ | 144,827 | | | $ | 146,680 | | | $ | 146,887 | | | $ | 149,929 | | | $ | 149,347 | |
| Same store operating expenses | | 45,455 | | | 46,650 | | | 44,961 | | | 47,535 | | | 47,499 | |
| Same store NOI | | $ | 99,372 | | | $ | 100,030 | | | $ | 101,926 | | | $ | 102,394 | | | $ | 101,848 | |
| NOI margin | | 68.6 | % | | 68.2 | % | | 69.4 | % | | 68.3 | % | | 68.2 | % |
| Year over year NOI growth rate | | | | | | | | | | 2.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Portfolio Diversification by Tenant(3) | | Rental Income | | % of Total | | Quality Indicators | |
| Kelsey-Seybold | | $ | 26,302 | | | 5.5 | % | | Health system affiliated properties as % of NOI(3) | 89.0 | % |
| Virtua | | 15,077 | | | 3.1 | % | | Health system affiliated tenants as % of rental income(3) | 60.9 | % |
| Novant Health | | 14,761 | | | 3.1 | % | | Retention (trailing twelve months)(3) | 89.6 | % |
| Providence Health & Services | | 13,838 | | | 2.9 | % | | In-house managed properties as % of square feet(3,4) | 86.9 | % |
| Common Spirit Health | | 12,922 | | | 2.7 | % | | Average remaining lease term (years)(3) | 6.9 | |
| Remaining portfolio | | 397,436 | | | 82.7 | % | | Average building size (square feet)(3) | 60,325 | |
| Total | | $ | 480,336 | | | 100.0 | % | | Average age (years) | 17 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Expirations(3) | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter |
| Occupied square feet | | 1,025,344 | | | 1,742,101 | | | 2,017,886 | | | 1,155,558 | | | 1,610,110 | | | 9,937,728 | |
| % of occupied square feet | | 5.9 | % | | 10.0 | % | | 11.5 | % | | 6.6 | % | | 9.2 | % | | 56.8 | % |
| | | | | | | | | | | | |
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 351 same store properties representing 16,532,923 square feet. See pages 21 and 22 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. Retention includes month-to-month tenants retained.
(4) Excludes tenant managed properties.
(dollars in thousands at Welltower pro rata ownership)
Relationship Investment History
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Detail of Acquisitions/JVs(1) | |
| 2018 | | 2019 | | 2020 | | 2021 | | 1Q22 | | 2Q22 | | | | | | 18-22 Total | |
| Count | | 15 | | | 27 | | | 12 | | | 35 | | | 5 | | | 11 | | | | | | | 105 | | |
| Total | | $ | 3,788,261 | | | $ | 4,073,554 | | | $ | 910,217 | | | $ | 4,101,533.59 | | | $ | 740,036 | | | $ | 1,043,881 | | | | | | | $ | 14,657,483 | | |
| Low | | 4,950 | | | 7,550 | | | 6,201 | | | 5,000 | | | 24,500 | | | 12,000 | | | | | | | 4,950 | | |
| Median | | 73,727 | | | 38,800 | | | 48,490 | | | 45,157 | | | 137,437 | | | 37,200 | | | | | | | 43,850 | | |
| High | | 2,481,723 | | | 1,250,000 | | | 235,387 | | | 1,576,642 | | | 389,149 | | | 385,653 | | | | | | | 2,481,723 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Timing | |
| | Acquisitions and Loan Funding(2) | Yield | | | | | Construction Conversions(3) | Yield | | Dispositions and Loan Payoffs | Yield | |
| April | | $ | 429,666 | | 4.8 | % | | | | | $ | 45,828 | | 9.0 | % | | $ | 78,821 | | 10.4 | % | |
| May | | 183,072 | | 7.4 | % | | | | | — | | — | % | | — | | — | % | |
| June | | 536,334 | | 4.9 | % | | | | | 38,353 | | 7.3 | % | | 22,388 | | 5.3 | % | |
| Total | | $ | 1,149,072 | | 5.3 | % | | | | | $ | 84,181 | | 8.2 | % | | $ | 101,209 | | 9.3 | % | |
Notes:
(1) Includes non-yielding asset acquisitions.
(2) Excludes land acquisitions and includes advances for non-real estate loans and excludes advances for development loans.
(3) Includes expansion conversions.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands at Welltower pro rata ownership, except per bed / unit / square foot) |
| Gross Investment Activity |
| | | | | | | | | | |
| Second Quarter 2022 |
| Properties | | Beds / Units / Square Feet | | Investment Per
Bed / Unit /
SqFt | | Pro Rata
Amount | | Yield |
Acquisitions and Loan Funding(1) | | | | | | | | | | |
| Seniors Housing Operating | 30 | | 4,134 | | units | | $ | 215,924 | | | $ | 941,093 | | | |
| | | | | | | | | | |
| Outpatient Medical | 5 | | 370,148 | | sf | | 279 | | | 102,788 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Loan funding | | | | | | | | 105,191 | | | |
Total acquisitions and loan funding(2) | 35 | | | | | | | 1,149,072 | | | 5.3 | % |
| | | | | | | | | | |
Development Funding(3) | | | | | | | | | | |
| Development projects: | | | | | | | | | | |
| Seniors Housing Operating | 52 | | 8,022 | | units | | | | 384,883 | | | |
| Seniors Housing Triple-net | 2 | | 267 | | units | | | | 21,379 | | | |
| Outpatient Medical | 6 | | 356,035 | | sf | | | | 33,938 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Total development projects | 60 | | | | | | | 440,200 | | | |
| Expansion projects: | | | | | | | | | | |
| Seniors Housing Operating | 3 | | 195 | | units | | | | 3,684 | | | |
| | | | | | | | | | |
| Outpatient Medical | 2 | | 51,095 | | sf | | | | 4,050 | | | |
| Total expansion projects | 5 | | | | | | | 7,734 | | | |
| | | | | | | | | | |
| Total development funding | 65 | | | | | | | 447,934 | | | 6.9 | % |
| | | | | | | | | | |
| Total gross investments | | | | | | | | 1,597,006 | | | 5.7 | % |
| | | | | | | | | | |
Dispositions and Loan Payoffs(4) | | | | | | | | | | |
| Seniors Housing Operating | 1 | | 29 | units | | 139,655 | | | 4,050 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Long-Term/Post-Acute Care | 2 | | 240 | beds | | 70,000 | | | 16,800 | | | |
| Loan payoffs | | | | | | | | 80,359 | | | |
Total dispositions and loan payoffs(5) | 3 | | | | | | | 101,209 | | | 9.3 | % |
| | | | | | | | | | |
| Net investments (dispositions) | | | | | | | | $ | 1,495,797 | | | |
Notes:
(1) Acquisitions represent purchase price excluding accounting adjustments pursuant to U.S. GAAP for all consolidated and unconsolidated property acquisitions and pro rata amounts include joint venture real estate loans receivable. Loan advances represent cash funded for real estate and non-real estate loans receivable, excluding development loans. Includes acquisition of additional ownership interest in existing properties which are excluded from property, unit and per unit metrics.
(2) Acquisition yields represents annualized contractual or projected cash rent/NOI to be generated divided by investment amount, excluding land parcels. Loan funding yield represents annualized contractual interest divided by investment amount.
(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 proceeds received for loan payoffs and consolidated and unconsolidated property sales.
(5) 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.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands, except per bed / unit / square foot, at Welltower pro rata ownership) |
| Gross Investment Activity |
| | | | | | | | | | |
| Year-To-Date 2022 |
| Properties | | Beds / Units / Square Feet | | Investment Per
Bed / Unit /
SqFt | | Pro Rata
Amount | | Yield |
Acquisitions and Loan Funding(1) | | | | | | | | | | |
| Seniors Housing Operating | 40 | | 5,555 | | units | | $ | 246,257 | | | $ | 1,395,442 | | | |
| | | | | | | | | | |
| Outpatient Medical | 9 | | 879,765 | | sf | | 286 | | | 251,038 | | | |
| Health System | — | | — | | units | | — | | | 137,437 | | | |
| | | | | | | | | | |
| Loan funding | | | | | | | | 152,059 | | | |
Total acquisitions and loan funding(2) | 49 | | | | | | | 1,935,976 | | | 5.3 | % |
| | | | | | | | | | |
Development Funding(3) | | | | | | | | | | |
| Development projects: | | | | | | | | | | |
| Seniors Housing Operating | 56 | | 8,560 | | units | | | | 578,005 | | | |
| Seniors Housing Triple-net | 2 | | 267 | | units | | | | 40,065 | | | |
| Outpatient Medical | 6 | | 356,035 | | sf | | | | 52,608 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Total development projects | 64 | | | | | | | 670,678 | | | |
| Expansion projects: | | | | | | | | | | |
| Seniors Housing Operating | 3 | | 195 | | units | | | | 5,394 | | | |
| | | | | | | | | | |
| Outpatient Medical | 2 | | 51,095 | sf | | | | 5,209 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Total expansion projects | 5 | | | | | | | 10,603 | | | |
| | | | | | | | | | |
| Total development funding | 69 | | | | | | | 681,281 | | | 7.0 | % |
| | | | | | | | | | |
| Total gross investments | | | | | | | | 2,617,257 | | | 5.7 | % |
| | | | | | | | | | |
Dispositions and Loan Payoffs(4) | | | | | | | | | | |
| Seniors Housing Operating | 1 | | 29 | | units | | 139,655 | | | 4,050 | | | |
| Seniors Housing Triple-net | 1 | | 72 | | units | | 125,347 | | | 9,025 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Long-Term/Post-Acute Care | 8 | | 923 | | beds | | 90,672 | | | 83,690 | | | |
| Loan payoffs | | | | | | | | 159,289 | | | |
Total dispositions and loan payoffs(5) | 10 | | | | | | | 256,054 | | | 8.1 | % |
| | | | | | | | | | |
| Net investments (dispositions) | | | | | | | | $ | 2,361,203 | | | |
|
Notes:
(1) Acquisitions represent purchase price excluding accounting adjustments pursuant to U.S. GAAP for all consolidated and unconsolidated property acquisitions and pro rata amounts include joint venture real estate loans receivable. Loan advances represent cash funded for real estate and non-real estate loans receivable, excluding development loans. Includes acquisition of additional ownership interest in existing properties which are excluded from property, unit and per unit metrics.
(2) Acquisition yields represents annualized contractual or projected cash rent/NOI to be generated divided by investment amount, excluding land parcels. Loan funding yield represents annualized contractual interest divided by investment amount.
(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 proceeds received for loan payoffs and consolidated and unconsolidated property sales.
(5) 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.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property Acquisitions Detail |
| Operator | | Units | | Location | | MSA |
| Seniors Housing Operating |
| Calamar Enterprises, Inc. | | 134 | | 1225 Southwest 28th Street | Ankeny | IA | US | | Des Moines |
| Calamar Enterprises, Inc. | | 110 | | 138 Standart Avenue | Auburn | NY | US | | Auburn, NY |
| Calamar Enterprises, Inc. | | 116 | | 43 Technology Drive | Bedford | NH | US | | Manchester, NH |
| Calamar Enterprises, Inc. | | 90 | | 100 Weiss Avenue | Buffalo | NY | US | | Buffalo |
| Calamar Enterprises, Inc. | | 140 | | 23 Triangle Park Drive | Concord | NH | US | | Concord, NH |
| Calamar Enterprises, Inc. | | 111 | | 3535 Piney Creek Drive | Elkhorn | NE | US | | Omaha |
| Calamar Enterprises, Inc. | | 116 | | 610 East Scenic Valley Avenue | Indianola | IA | US | | Des Moines |
| Calamar Enterprises, Inc. | | 110 | | 19301 East 50th Terrace Court South | Independence | MO | US | | Kansas City |
| Calamar Enterprises, Inc. | | 116 | | 4000 Village Drive | Jeannette | PA | US | | Pittsburgh |
| Calamar Enterprises, Inc. | | 116 | | 111 Northwest 94 Street | Kansas City | MO | US | | Kansas City |
| Calamar Enterprises, Inc. | | 110 | | 2 Golen Drive | Londonderry | NH | US | | Boston |
| Calamar Enterprises, Inc. | | 116 | | 2123 Southwestern Drive | Lakewood | NY | US | | Jamestown-Dunkirk-Fredonia, NY |
| Calamar Enterprises, Inc. | | 112 | | 7544 Gertrude Street | La Vista | NE | US | | Omaha |
| Calamar Enterprises, Inc. | | 92 | | 3959 Forest Park Way | North Tonawanda | NY | US | | Buffalo |
| Calamar Enterprises, Inc. | | 107 | | 7205 North 73rd Plz Circle | Omaha | NE | US | | Omaha |
| Calamar Enterprises, Inc. | | 107 | | 110 Creekside Drive | Painted Post | NY | US | | Corning, NY |
| Calamar Enterprises, Inc. | | 116 | | 900 North Twp Boulevard | Pittston | PA | US | | Scranton |
| Calamar Enterprises, Inc. | | 134 | | 7200 Silverheel Street | Shawnee | KS | US | | Kansas City |
| Calamar Enterprises, Inc. | | 110 | | 3979 Forest Park Way | Wheatfield | NY | US | | Buffalo |
| Calamar Enterprises, Inc. | | 120 | | 5378 Conable Way | Warsaw | NY | US | | No MSA |
| Cogir Management Corporation | | 467 | | 6923 Bd des Galeries d'Anjou | Anjou | QC | CA | | Montréal |
| Cogir Management Corporation | | 120 | | 150 Cortona Way | Brentwood | CA | US | | San Francisco |
| Cogir Management Corporation | | 184 | | 88 Rue Dufferin | Salaberry-de-Valleyfield | QC | CA | | Salaberry-de-Valleyfield |
| Cogir Management Corporation | | 325 | | 5500 Northeast 82nd Avenue | Vancouver | WA | US | | Portland, OR |
| Cogir Management Corporation | | 291 | | 415 Southeast 177th Avenue | Vancouver | WA | US | | Portland, OR |
| Cogir Management Corporation | | 83 | | 5300 Northeast 82nd Avenue | Vancouver | WA | US | | Portland, OR |
| Oakmont Management Group | | 108 | | 4301 Buena Vista Road | Bakersfield | CA | US | | Bakersfield |
| Treplus Communities | | 86 | | 4050 Hawthorne Lane | Dublin | OH | US | | Columbus |
| Treplus Communities | | 92 | | 90 Burr Oak Drive | Delaware | OH | US | | Columbus |
| Treplus Communities | | 95 | | 602 Redbud Road | Pickerington | OH | US | | Columbus |
| Total | | 4,134 | | | | | | | | |
| |
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| Outpatient Medical | | Sq. Ft | | | | | | | |
| Dignity Mercy San Juan Medical Center | | 52,778 | | 6620 Coyle Avenue | Carmichael | CA | US | | Sacramento |
| John Muir Health | | 92,738 | | 5860 Owens Drive | Pleasanton | CA | US | | San Francisco |
| Mid Atlantic Retina | | 29,787 | | 4060 Butler Pike | Plymouth Meeting | PA | US | | Philadelphia |
| Mid Atlantic Retina | | 16,520 | | 8 Ranoldo Terrace | Cherry Hill | NJ | US | | Philadelphia |
| Thomas Park Management, LLC | | 178,325 | | 8300 Health Park | Raleigh | NC | US | | Raleigh |
| Total | | 370,148 | | | | | | | |
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| (dollars in thousands at Welltower pro rata ownership) |
Development Summary(1) | | | | |
| | | Unit Mix | | | | | | |
| Facility | | Total | Wellness Housing | Independent Living | Assisted Living | Memory Care | | | Commitment Amount | | Balance at 06/30/22 | | Estimated Conversion |
| | | | | | | | | | | | | | |
| Seniors Housing Operating | | | | | | | | | | | |
| London, UK | | 82 | | — | | — | | 51 | | 31 | | | | $ | 42,567 | | | $ | 21,155 | | | 3Q22 |
| Sachse, TX | | 193 | | 193 | | — | | — | | — | | | | 37,788 | | | 24,769 | | | 3Q22 |
| Princeton, NJ | | 80 | | — | | — | | 68 | | 12 | | | | 29,624 | | | 30,020 | | | 3Q22 |
| Montreal, QC | | 247 | | — | | 223 | | — | | 24 | | | | 19,955 | | | 14,941 | | | 3Q22 |
| Berea, OH | | 120 | | 120 | | — | | — | | — | | | | 13,477 | | | 12,291 | | | 3Q22 |
| Painesville, OH | | 119 | | 119 | | — | | — | | — | | | | 13,249 | | | 11,247 | | | 3Q22 |
| Beaver, PA | | 116 | | 116 | | — | | — | | — | | | | 13,403 | | | 10,904 | | | 3Q22 |
| New York, NY | | 528 | | 400 | | — | | 92 | | 36 | | | | 147,467 | | | 143,640 | | | 4Q22 |
| New Rochelle, NY | | 72 | | — | | — | | 36 | | 36 | | | | 41,922 | | | 20,903 | | | 3Q22 |
| Pflugerville, TX | | 196 | | 196 | | — | | — | | — | | | | 39,224 | | | 19,787 | | | 4Q22 |
| Georgetown, TX | | 188 | | 188 | | — | | — | | — | | | | 35,961 | | | 23,646 | | | 4Q22 |
| Denton, TX | | 65 | | 65 | | — | | — | | — | | | | 19,386 | | | 7,745 | | | 4Q22 |
| Wombourne, UK | | 66 | | — | | — | | 41 | | 25 | | | | 14,594 | | | 13,018 | | | 4Q22 |
| Leicester, UK | | 60 | | — | | — | | 36 | | 24 | | | | 13,621 | | | 11,069 | | | 4Q22 |
| Rugby, UK | | 76 | | — | | — | | 51 | | 25 | | | | 18,624 | | | 11,811 | | | 1Q23 |
| Meadville, PA | | 128 | | 128 | | — | | — | | — | | | | 13,716 | | | 13,716 | | | 1Q23 |
| Brookline, MA | | 159 | | — | | 81 | | 38 | | 40 | | | | 145,990 | | | 46,973 | | | 2Q23 |
| New York, NY | | 160 | | — | | — | | 76 | | 84 | | | | 79,400 | | | 58,991 | | | 2Q23 |
| Lake Jackson, TX | | 130 | | 130 | | — | | — | | — | | | | 31,738 | | | 5,766 | | | 2Q23 |
| Buzzards Bay, MA | | 120 | | 120 | | — | | — | | — | | | | 31,126 | | | 31,126 | | | 2Q23 |
| Manchester, CT | | 128 | | 128 | | — | | — | | — | | | | 21,915 | | | 21,915 | | | 2Q23 |
| East Windsor, CT | | 122 | | 122 | | — | | — | | — | | | | 20,530 | | | 20,530 | | | 2Q23 |
| Washington, DC | | 137 | | — | | 10 | | 90 | | 37 | | | | 115,140 | | | 33,084 | | | 3Q23 |
| White Marsh, MD | | 188 | | — | | 106 | | 55 | | 27 | | | | 77,234 | | | 9,283 | | | 3Q23 |
| Weymouth, MA | | 165 | | — | | 91 | | 48 | | 26 | | | | 76,220 | | | 18,636 | | | 3Q23 |
| Charlotte, NC | | 328 | | 328 | | — | | — | | — | | | | 71,658 | | | 42,440 | | | 3Q23 |
| Queen Creek, AZ | | 199 | | 199 | | — | | — | | — | | | | 53,659 | | | 8,322 | | | 3Q23 |
| Glendale, AZ | | 204 | | 204 | | — | | — | | — | | | | 53,026 | | | 14,929 | | | 3Q23 |
| Blue Springs, MO | | 134 | | 134 | | — | | — | | — | | | | 20,854 | | | 20,854 | | | 4Q23 |
| Miami Twp, OH | | 122 | | 122 | | — | | — | | — | | | | 16,385 | | | 3,299 | | | 4Q23 |
| Melissa, TX | | 52 | | 52 | | — | | — | | — | | | | 16,035 | | | 2,204 | | | 1Q24 |
| Gaithersburg, MD | | 302 | | — | | 190 | | 89 | | 23 | | | | 156,194 | | | 42,003 | | | 2Q24 |
| Leander, TX | | 72 | | 72 | | — | | — | | — | | | | 25,904 | | | 3,441 | | | 2Q24 |
| Temple, TX | | 256 | | 256 | | — | | — | | — | | | | 65,569 | | | 5,765 | | | 4Q24 |
| Cupertino, CA | | 158 | — | | — | | 158 | | — | | | | 61,929 | | | 26,937 | | | 4Q24 |
| Santa Clara, CA | | 509 | | 509 | | — | | — | | — | | | | 110,701 | | | 78,784 | | | 1Q25 |
| Santa Clara, CA | | 176 | | — | | — | | 143 | | 33 | | | | 64,680 | | | 31,546 | | | 1Q25 |
| Kyle, TX | | 225 | | 225 | | — | | — | | — | | | | 62,204 | | | 4,742 | | | 1Q25 |
| Little Rock, AR | | 283 | | 283 | | — | | — | | — | | | | 13,893 | | | 1,624 | | | 3Q25 |
| Sunrise Developments(2) | | 933 | | — | | — | | 578 | | 355 | | | | 213,925 | | | 102,923 | | | 3Q22 - 1Q24 |
| Subtotal | | 7,598 | | 4,409 | | 701 | | 1,650 | | 838 | | | | 2,120,487 | | | 1,026,779 | | | |
| | | | | | | | | | | | | | |
| Seniors Housing Triple-net | | | | | | | | | | | |
| Redhill, UK | | 76 | | — | | — | | 46 | | 30 | | | | 19,338 | | | 17,759 | | | 3Q22 |
| Raleigh, NC | | 191 | | — | | 151 | | 40 | | — | | | | 141,748 | | | 73,975 | | | 2Q23 |
| Subtotal | | 267 | | — | | 151 | | 86 | | 30 | | | | 161,086 | | | 91,734 | | | |
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| Outpatient Medical | | Rentable Square Ft | Preleased % | Health System Affiliation | | | Commitment Amount | | Balance at 06/30/22 | | Estimated Conversion |
| Norman, OK | | | | 47,082 | | 100 | % | Yes | | | 21,792 | | 18,601 | | | 3Q22 |
| Tyler, TX | | | | 85,214 | | 100 | % | Yes | | | 34,750 | | 24,002 | | | 4Q22 |
| Stafford, TX | | | | 36,788 | | 100 | % | Yes | | | 18,031 | | 10,549 | | | 4Q22 |
| League City, TX | | | | 16,835 | | 100 | % | Yes | | | 9,935 | | | 1,493 | | | 1Q23 |
| Norman, OK | | | | 134,285 | | 100 | % | Yes | | | 93,329 | | | 23,472 | | | 2Q23 |
| Beaumont, TX | | | | 35,831 | | 100 | % | Yes | | | 11,231 | | | 1,194 | | | 2Q23 |
| Subtotal | | | | 356,035 | | | | | | 189,068 | | | 79,311 | | | |
| | | | | | | | | | | | | | |
| Total Development Projects | | | | | $ | 2,470,641 | | | $ | 1,197,824 | | | |
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.
(2) Relates to ten properties, with a weighted-average ownership of 37%.
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| (dollars in thousands at Welltower pro rata ownership) | | |
Development Funding Projections(1) | | | | | | | | |
| | | | | | | Projected Future Funding | | |
| Projects | | Beds / Units / Square Feet | | Projected Yields(2) | | 2022 Funding | | Funding Thereafter | | Total Unfunded Commitments | | Committed Balances |
| Seniors Housing Operating | 49 | | 7,598 | | 7.2 | % | | $ | 566,355 | | | $ | 527,353 | | | $ | 1,093,708 | | | $ | 2,120,487 | |
| Seniors Housing Triple-net | 2 | | 267 | | 7.8 | % | | 33,927 | | | 35,425 | | | 69,352 | | | 161,086 | |
| Outpatient Medical | 6 | | 356,035 | | 6.0 | % | | 70,123 | | | 39,634 | | | 109,757 | | | 189,068 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Total | 57 | | | | 7.1 | % | | $ | 670,405 | | | $ | 602,412 | | | $ | 1,272,817 | | | $ | 2,470,641 | |
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Development Project Conversion Estimates(1) |
| Quarterly Conversions | | Annual Conversions |
| | Amount | | Projected Yields(2) | | | | Amount | | Projected Yields(2) |
| 1Q22 actual | | $ | 228,021 | | | 7.3 | % | | 2022 actual | | $ | 312,202 | | | 5.3 | % |
| 2Q22 actual | | 84,181 | | 8.2 | % | | 2022 estimate | | 622,239 | | | 7.7 | % |
| 3Q22 estimate | | 263,284 | | 7.2 | % | | 2023 estimate | | 1,230,433 | | | 7.4 | % |
| 4Q22 estimate | | 358,955 | | 6.2 | % | | 2024 estimate | | 366,491 | | 7.4 | % |
| 1Q23 estimate | | 92,147 | | 7.3 | % | | 2025 estimate | | 251,478 | | | 6.6 | % |
| 2Q23 estimate | | 638,963 | | 7.3 | % | | Total | | $ | 2,782,843 | | | 7.2 | % |
| 3Q23 estimate | | 462,084 | | 7.5 | % | | | | | | |
| 4Q23 estimate | | 37,239 | | 7.3 | % | | | | | | |
| 1Q24 estimate | | 56,895 | | 7.4 | % | | | | | | |
| 2Q24 estimate | | 182,098 | | 8.3 | % | | | | | | |
| 4Q24 estimate | | 127,498 | | 6.1 | % | | | | | | |
| 2Q25 estimate | | 237,585 | | 7.0 | % | | | | | | |
| 3Q25 estimate | | 13,893 | | 6.9 | % | | | | | | |
| Total | | $ | 2,782,843 | | | 7.2 | % | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unstabilized Properties | | |
| | 03/31/2022 Properties | | Stabilizations | | Construction Conversions(3) | | Acquisitions/ Dispositions | | 06/30/2022 Properties | | Beds / Units |
| Seniors Housing Operating | | 38 | | (2) | | | 3 | | — | | | 39 | | 5,437 |
| Seniors Housing Triple-net | | 24 | | (1) | | | — | | — | | | 23 | | 2,554 |
| | | | | | | | | | | | |
| Total | | 62 | | (3) | | | 3 | | — | | | 62 | | 7,991 |
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| Occupancy | | 03/31/2022 Properties | | Stabilizations | | Construction Conversions(3) | | Acquisitions/ Dispositions | | Progressions | | 06/30/2022 Properties |
| 0% - 50% | | 38 | | | — | | | 3 | | | — | | | (12) | | | 29 | |
| 50% - 70% | | 17 | | | — | | | — | | | — | | | 6 | | | 23 | |
| 70% + | | 7 | | | (2) | | | — | | | — | | | 5 | | | 10 | |
| Total | | 62 | | | (2) | | | 3 | | | — | | | (1) | | | 62 | |
| | | | | | | | | | | | |
| Occupancy | | 06/30/2022 Properties | | Months In Operation | | Revenues | | % of Total Revenues(4) | | Gross Investment Balance | | % of Total Gross Investment |
| 0% - 50% | | 29 | | | 12 | | | $ | 47,606 | | | 0.8 | % | | $ | 1,011,591 | | | 2.4 | % |
| 50% - 70% | | 23 | | | 21 | | | 80,098 | | | 1.4 | % | | 742,477 | | | 1.8 | % |
| 70% + | | 10 | | | 21 | | | 32,052 | | | 0.6 | % | | 336,822 | | | 0.8 | % |
| Total | | 62 | | | 11 | | | $ | 159,756 | | | 2.8 | % | | $ | 2,090,890 | | | 5.0 | % |
| | | | | | | | | | | | |
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 15.
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| (dollars in thousands at Welltower pro rata ownership) | | | | |
| Components of NAV | | | | |
| | | | | | |
| Stabilized NOI | | | | Pro rata beds/units/square feet |
Seniors Housing Operating(1) | | $ | 895,796 | | | 84,736 | | units | |
| Seniors Housing Triple-net | | 367,496 | | | 24,013 | | units | |
| Outpatient Medical | | 440,320 | | | 18,452,459 | | square feet | |
| Health System | | 172,104 | | | 20,279 | | units/beds | |
| Long-Term/Post-Acute Care | | 89,216 | | | 6,215 | | beds | |
Total In-Place NOI(2) | | 1,964,932 | | | | | |
Incremental stabilized NOI(3) | | 111,085 | | | | | |
| Total stabilized NOI | | $ | 2,076,017 | | | | | |
| | | | | | |
| Obligations | | | | | | |
Lines of credit and commercial paper(4) | | $ | 354,000 | | | | | |
Senior unsecured notes(4) | | 12,614,327 | | | | | |
Secured debt(4) | | 3,130,763 | | | | | |
| Financing lease liabilities | | 109,888 | | | | | |
| Total debt | | $ | 16,208,978 | | | | | |
| Add (Subtract): | | | | | | |
Other liabilities (assets), net(5) | | $ | 325,607 | | | | | |
| Cash and cash equivalents and restricted cash | | (442,251) | | | | | |
| Net obligations | | $ | 16,092,334 | | | | | |
| | | | | | |
| Other Assets | | | | | | |
| Land parcels | | $ | 233,472 | | | Effective Interest Rate(8) |
Real estate loans receivable(6) | | 1,237,730 | | | 10.9% | | |
Non real estate loans receivable(7) | | 257,697 | | | 11.0% | | |
Joint venture real estate loans receivables(9) | | 239,254 | | | 5.7% | | |
Other investments(10) | | 8,347 | | | | | |
Investments held for sale(11) | | 231,148 | | | | | |
Development properties:(12) | | | | | | |
| Current balance | | 1,198,371 | | | | | |
| Unfunded commitments | | 1,313,934 | | | | | |
| Committed balances | | $ | 2,512,305 | | | | | |
| Projected yield | | 7.1 | % | | | | |
| Projected NOI | | $ | 178,374 | | | | | |
| | | | | | |
Common Shares Outstanding(13) | | 465,610 | | | | | |
| | | | | | |
| | | | | | |
Notes:
(1) Includes $9,277,000 attributable to our proportional share of income from unconsolidated management company investments.
(2) See page 21 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 $1,112,326,000 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 | | $ | 302,211 | |
| Below market tenant lease intangibles, net | | 27,276 | |
| Deferred taxes, net | | (37,646) | |
| Intangible assets, net | | (52,201) | |
| Other non-cash liabilities / (assets), net | | 6,438 | |
| Total non-cash liabilities/(assets), net | | $ | 246,078 | |
| | |
(6) Represents $1,251,049,000 of real estate loans, excluding development loans and including certain in substance real estate developments and held to maturity debt securities, and net of $13,319,000 of credit allowances.
(7) Represents $409,459,000 of non-real estate loans, net of $151,762,000 of credit allowances.
(8) Average cash-pay interest rates are 6.6%, 2.5% and 5.7% for real estate, non-real estate loans and joint venture 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, 2022 and estimated fair value of a 3.4% ownership in a Seniors Housing Operating portfolio excluded from IPNOI.
(11) Represents expected proceeds from assets held for sale.
(12) See pages 12-13. Also includes expansion projects.
(13) Includes redeemable OP units.
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| (dollars in thousands at Welltower pro rata ownership) |
Net Operating Income(1) | | | | | | | | | | |
| | 2Q21 | | 3Q21 | | 4Q21 | | 1Q22 | | 2Q22 |
| Revenues: | | | | | | | | | | |
| Seniors Housing Operating | | | | | | | | | | |
| Resident fees and services | | $ | 726,516 | | | $ | 809,930 | | | $ | 870,039 | | | $ | 965,574 | | | $ | 1,000,571 | |
| Interest income | | 859 | | | 1,117 | | | 1,091 | | | 1,398 | | | 1,642 | |
| Other income | | 860 | | | 1,049 | | | 6,434 | | | 3,007 | | | (1,251) | |
| Total revenues | | 728,235 | | | 812,096 | | | 877,564 | | | 969,979 | | | 1,000,962 | |
| | | | | | | | | | |
| Seniors Housing Triple-net | | | | | | | | | | |
| Rental income | | 108,612 | | | 114,039 | | | 116,497 | | | 108,792 | | | 110,914 | |
| Interest income | | 28,885 | | | 32,153 | | | 33,149 | | | 33,097 | | | 31,725 | |
| Other income | | 1,357 | | | 901 | | | 1,068 | | | 1,471 | | | 1,786 | |
| Total revenues | | 138,854 | | | 147,093 | | | 150,714 | | | 143,360 | | | 144,425 | |
| | | | | | | | | | |
| Outpatient Medical | | | | | | | | | | |
| Rental income | | 150,781 | | | 157,474 | | | 155,715 | | | 160,288 | | | 163,808 | |
| Interest income | | 4,731 | | | 472 | | | 51 | | | 71 | | | 65 | |
| Other income | | 5,002 | | | 2,057 | | | 5,256 | | | 3,238 | | | 2,347 | |
| Total revenues | | 160,514 | | | 160,003 | | | 161,022 | | | 163,597 | | | 166,220 | |
| | | | | | | | | | |
| Health System | | | | | | | | | | |
| Rental income | | 46,554 | | | 46,204 | | | 47,440 | | | 51,243 | | | 52,052 | |
| | | | | | | | | | |
| | | | | | | | | | |
| Total revenues | | 46,554 | | | 46,204 | | | 47,440 | | | 51,243 | | | 52,052 | |
| | | | | | | | | | |
| Long-Term/Post-Acute Care | | | | | | | | | | |
| Rental income | | 40,542 | | | 32,255 | | | 30,989 | | | 30,039 | | | 29,189 | |
| Interest income | | 3,973 | | | 6,122 | | | 5,381 | | | 5,107 | | | 5,499 | |
| Other income | | — | | | 184 | | | — | | | 234 | | | — | |
| Total revenues | | 44,515 | | | 38,561 | | | 36,370 | | | 35,380 | | | 34,688 | |
| | | | | | | | | | |
| Corporate | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Other income | | 2,672 | | | 3,362 | | | 3,548 | | | 3,183 | | | 3,665 | |
| Total revenues | | 2,672 | | | 3,362 | | | 3,548 | | | 3,183 | | | 3,665 | |
| | | | | | | | | | |
| Total | | | | | | | | | | |
| Rental income | | 346,489 | | | 349,972 | | | 350,641 | | | 350,362 | | | 355,963 | |
| Resident fees and services | | 726,516 | | | 809,930 | | | 870,039 | | | 965,574 | | | 1,000,571 | |
| Interest income | | 38,448 | | | 39,864 | | | 39,672 | | | 39,673 | | | 38,931 | |
| Other income | | 9,891 | | | 7,553 | | | 16,306 | | | 11,133 | | | 6,547 | |
| Total revenues | | 1,121,344 | | | 1,207,319 | | | 1,276,658 | | | 1,366,742 | | | 1,402,012 | |
| | | | | | | | | | |
| Property operating expenses: | | | | | | | | | | |
| Seniors Housing Operating | | 584,484 | | | 644,241 | | | 698,601 | | | 774,936 | | | 777,178 | |
| Seniors Housing Triple-net | | 7,871 | | | 7,927 | | | 8,236 | | | 7,421 | | | 7,778 | |
| Outpatient Medical | | 46,184 | | | 48,796 | | | 47,254 | | | 50,599 | | | 51,177 | |
| Health System | | 54 | | | 64 | | | 64 | | | 35 | | | 100 | |
| Long-Term/Post-Acute Care | | 4,848 | | | 3,859 | | | 4,085 | | | 3,958 | | | 3,837 | |
| Corporate | | 2,174 | | | 3,054 | | | 1,935 | | | 2,615 | | | 2,645 | |
| Total property operating expenses | | 645,615 | | | 707,941 | | | 760,175 | | | 839,564 | | | 842,715 | |
| | | | | | | | | | |
| Net operating income: | | | | | | | | | | |
| Seniors Housing Operating | | 143,751 | | | 167,855 | | | 178,963 | | | 195,043 | | | 223,784 | |
| Seniors Housing Triple-net | | 130,983 | | | 139,166 | | | 142,478 | | | 135,939 | | | 136,647 | |
| Outpatient Medical | | 114,330 | | | 111,207 | | | 113,768 | | | 112,998 | | | 115,043 | |
| Health System | | 46,500 | | | 46,140 | | | 47,376 | | | 51,208 | | | 51,952 | |
| Long-Term/Post-Acute Care | | 39,667 | | | 34,702 | | | 32,285 | | | 31,422 | | | 30,851 | |
| Corporate | | 498 | | | 308 | | | 1,613 | | | 568 | | | 1,020 | |
| Net operating income | | $ | 475,729 | | | $ | 499,378 | | | $ | 516,483 | | | $ | 527,178 | | | $ | 559,297 | |
|
| | | | | | | | | | |
| | | | | | | | | | |
Note:
(1) Please see discussion of Supplemental Reporting Measures on page 20. Includes amounts from investments sold or held for sale. NOI related to DownREITs included at 100%. Excludes NOI related to a leasehold portfolio interest for 26 properties assumed by a wholly-owned affiliate in conjunction with the Holiday Retirement transaction. Subsequent to the initial transaction, we purchased eight of the leased properties and one of the properties was sold by the landlord and removed from the lease. No rent was paid in excess of net cash flow relating to the leasehold properties and therefore, the leasehold interests were excluded from NOI and relevant metrics such as property count, unit count, IPNOI. same store NOI, REVPOR and same store REVPOR. Effective April 1, 2022, the lease was terminated and the related lease termination income was also excluded from NOI.
| | | | | | | | | | | | | | |
| (dollars in thousands) |
Leverage and EBITDA Reconciliations(1) | | |
| | Twelve Months Ended | | Three Months Ended |
| | June 30, 2022 | | June 30, 2022 |
| Net income (loss) | | $ | 417,953 | | | $ | 95,672 | |
| Interest expense | | 493,816 | | | 127,750 | |
| Income tax expense (benefit) | | 15,069 | | | 3,065 | |
| Depreciation and amortization | | 1,166,638 | | | 310,295 | |
| EBITDA | | 2,093,476 | | | 536,782 | |
| Loss (income) from unconsolidated entities | | 37,948 | | | 7,058 | |
Stock-based compensation(2) | | 20,945 | | | 6,021 | |
| Loss (gain) on extinguishment of debt, net | | (504) | | | 603 | |
| Loss (gain) on real estate dispositions, net | | (151,029) | | | 3,532 | |
| Impairment of assets | | 3,847 | | | — | |
| Provision for loan losses, net | | (949) | | | 165 | |
| Loss (gain) on derivatives and financial instruments, net | | (7,737) | | | (1,407) | |
Other expenses(2) | | 80,114 | | | 35,046 | |
Lease termination and leasehold interest adjustment(3) | | (64,094) | | | (56,397) | |
Casualty losses, net of recoveries(4) | | 8,472 | | | 2,673 | |
Other impairment(5) | | (620) | | | (620) | |
| Total adjustments | | (73,607) | | | (3,326) | |
| Adjusted EBITDA | | $ | 2,019,869 | | | $ | 533,456 | |
|
| Interest Coverage Ratios | | | | |
| Interest expense | | $ | 493,816 | | | $ | 127,750 | |
| Capitalized interest | | 21,860 | | | 6,387 | |
| Non-cash interest expense | | (21,258) | | | (6,606) | |
| Total interest | | $ | 494,418 | | | $ | 127,531 | |
| EBITDA | | $ | 2,093,476 | | | $ | 536,782 | |
| Interest coverage ratio | | 4.23 | x | | 4.21 | x |
| Adjusted EBITDA | | $ | 2,019,869 | | | $ | 533,456 | |
| Adjusted Interest coverage ratio | | 4.09 | x | | 4.18 | x |
|
| Fixed Charge Coverage Ratios | | | | |
| Total interest | | $ | 494,418 | | | $ | 127,531 | |
| Secured debt principal amortization | | 64,267 | | | 14,382 | |
| Total fixed charges | | $ | 558,685 | | | $ | 141,913 | |
| EBITDA | | $ | 2,093,476 | | | $ | 536,782 | |
| Fixed charge coverage ratio | | 3.75 | x | | 3.78 | x |
| Adjusted EBITDA | | $ | 2,019,869 | | | $ | 533,456 | |
| Adjusted Fixed charge coverage ratio | | 3.62 | x | | 3.76 | x |
|
| Net Debt to EBITDA Ratios |
Total debt(6) | | | | $ | 15,144,432 | |
| Less: cash and cash equivalents and restricted cash | | | | (442,251) | |
| Net debt | | | | $ | 14,702,181 | |
| EBITDA Annualized | | | | $ | 2,147,128 | |
| Net debt to EBITDA ratio | | | | 6.85 | x |
| Adjusted EBITDA Annualized | | | | $ | 2,133,824 | |
| Net debt to Adjusted EBITDA ratio | | | | 6.89 | x |
|
Notes:
(1) Please see discussion of Supplemental Reporting Measures on page 20.
(2) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.
(3) Effective April 1, 2022, our leasehold interest relating to the master lease with National Health Investors ("NHI") for 17 properties assumed in conjunction with the Holiday Retirement acquisition was terminated as a result of the transition or sale of the properties by NHI. We recognized a gain of $58,621,000 related to the termination of this lease in other income. The net impact of these leasehold properties inclusive of the gain has been excluded from Adjusted EBITDA.
(4) Represents casualty losses net of any insurance recoveries.
(5) Primarily related to the release of previously reserved straight-line receivables.
(6) Includes unamortized premiums/discounts, other fair value adjustments and financing lease liabilities of $109,888,000. Excludes operating lease liabilities of $300,829,000 related to ASC 842 adoption.
| | | | | | | | | | | | | | | | | |
| (in thousands except share price) |
Leverage and Current Capitalization(1) |
| | | | % of Total |
| Book Capitalization | | | | | |
Lines of credit and commercial paper(2) | | | $ | 354,000 | | | 1.02 | % |
Long-term debt obligations(2)(3) | | | 14,790,432 | | | 42.78 | % |
| Cash and cash equivalents and restricted cash | | | (442,251) | | | (1.28) | % |
| Net debt to consolidated book capitalization | | | $ | 14,702,181 | | | 42.52 | % |
Total equity(4) | | | 19,873,913 | | | 57.48 | % |
| Consolidated book capitalization | | | $ | 34,576,094 | | | 100.00 | % |
Joint venture debt, net(5) | | | 930,137 | | | |
| Total book capitalization | | | $ | 35,506,231 | | | |
| | | | | |
| Undepreciated Book Capitalization | | | | | |
Lines of credit and commercial paper(2) | | | $ | 354,000 | | | 0.84 | % |
Long-term debt obligations(2)(3) | | | 14,790,432 | | | 35.20 | % |
| Cash and cash equivalents and restricted cash | | | (442,251) | | | (1.05) | % |
| Net debt to consolidated undepreciated book capitalization | | | $ | 14,702,181 | | | 34.99 | % |
| Accumulated depreciation and amortization | | | 7,437,779 | | | 17.70 | % |
Total equity(4) | | | 19,873,913 | | | 47.31 | % |
| Consolidated undepreciated book capitalization | | | $ | 42,013,873 | | | 100.00 | % |
Joint venture debt, net(5) | | | 930,137 | | | |
| Total undepreciated book capitalization | | | $ | 42,944,010 | | | |
| | | | | |
| Enterprise Value | | | | | |
Lines of credit and commercial paper(2) | | | $ | 354,000 | | | 0.65 | % |
Long-term debt obligations(2)(3) | | | 14,790,432 | | | 27.31 | % |
| Cash and cash equivalents and restricted cash | | | (442,251) | | | (0.82) | % |
| Net debt to consolidated enterprise value | | | $ | 14,702,181 | | | 27.14 | % |
| Common shares outstanding | | | 463,369 | | | |
| Period end share price | | | 82.35 | | | |
| Common equity market capitalization | | | $ | 38,158,437 | | | 70.43 | % |
Noncontrolling interests(4) | | | 1,317,733 | | | 2.43 | % |
| Consolidated enterprise value | | | $ | 54,178,351 | | | 100.00 | % |
Joint venture debt, net(5) | | | 930,137 | | | |
| Total enterprise value | | | $ | 55,108,488 | | | |
| | | | | |
| Secured Debt as % of Total Assets | | | | | |
Secured debt(2) | | | $ | 2,191,826 | | | 5.99 | % |
| Total assets | | | $ | 36,573,671 | | | |
| | | | | |
| Total Debt as % of Total Assets | | | | | |
Total debt(2)(3) | | | $ | 15,144,432 | | | 41.41 | % |
| Total assets | | | $ | 36,573,671 | | | |
| | | | | |
| Unsecured Debt as % of Unencumbered Assets | | | | | |
Unsecured debt(2) | | | $ | 12,842,718 | | | 35.79 | % |
| Unencumbered assets | | | $ | 35,880,479 | | | |
| | | | | |
Notes:
(1) Please see discussion of Supplemental Reporting Measures on page 20.
(2) Amounts include unamortized premiums/discounts and other fair value adjustments as reflected on the balance sheet.
(3) Includes financing lease liabilities of $109,888,000 and excludes operating lease liabilities of $300,829,000 related to ASC 842 adoption.
(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.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) | | | | | | | | | | |
Debt Maturities and Principal Payments(1) |
| Year | | Lines of Credit and Commercial Paper(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 (8) |
| 2022 | | $ | — | | | $ | — | | | $ | 396,742 | | | $ | 95,212 | | | $ | (126,672) | | | $ | 365,282 | | | 2.27 | % | | 3.58 | % |
| 2023 | | — | | | — | | | 498,668 | | | 171,818 | | | (81,327) | | | 589,159 | | | 3.66 | % | | 3.86 | % |
| 2024 | | — | | | 1,350,000 | | | 243,347 | | | 145,474 | | | (37,772) | | | 1,701,049 | | | 10.57 | % | | 3.80 | % |
| 2025 | | — | | | 1,260,000 | | | 231,488 | | | 509,843 | | | (28,569) | | | 1,972,762 | | | 12.25 | % | | 3.82 | % |
| 2026 | | 354,000 | | | 700,000 | | | 130,410 | | | 58,660 | | | (20,365) | | | 1,222,705 | | | 7.59 | % | | 3.53 | % |
| 2027 | | — | | | 1,927,317 | | | 181,578 | | | 103,579 | | | (38,151) | | | 2,174,323 | | | 13.51 | % | | 2.65 | % |
| 2028 | | — | | | 1,418,910 | | | 83,184 | | | 26,654 | | | (12,837) | | | 1,515,911 | | | 9.42 | % | | 4.46 | % |
| 2029 | | — | | | 1,050,000 | | | 274,187 | | | 36,327 | | | (962) | | | 1,359,552 | | | 8.44 | % | | 3.03 | % |
| 2030 | | — | | | 750,000 | | | 34,882 | | | 31,579 | | | (131) | | | 816,330 | | | 5.07 | % | | 3.13 | % |
| 2031 | | — | | | 1,350,000 | | | 5,169 | | | 29,098 | | | (136) | | | 1,384,131 | | | 8.60 | % | | 2.77 | % |
| Thereafter | | — | | | 2,808,100 | | | 120,971 | | | 74,080 | | | (5,265) | | | 2,997,886 | | | 18.62 | % | | 4.40 | % |
| Totals | | $ | 354,000 | | | $ | 12,614,327 | | | $ | 2,200,626 | | | $ | 1,282,324 | | | $ | (352,187) | | | $ | 16,099,090 | | | 100.00 | % | | |
| | | | | | | | | | | | | | | | | |
Weighted Avg. Interest Rate(8) | | 2.32 | % | | 3.68 | % | | 3.43 | % | | 3.50 | % | | 3.08 | % | | 3.61 | % | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted Avg. Maturity Years | | 3.9 | (2) | 7.5 | | 3.6 | | 5.1 | | 2.3 | | 6.8 | (2) | | | |
| | | | | | | | | | | | | | | | | |
% Floating Rate Debt(8) | | 100.00 | % | | 13.91 | % | | 30.78 | % | | 26.17 | % | | 43.13 | % | | 18.44 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt by Local Currency(1) |
| | | Lines of Credit and Commercial Paper(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) | | Investment Hedges(9) |
| United States | | $ | 354,000 | | | $ | 10,910,000 | | | $ | 1,184,898 | | | $ | 951,642 | | | $ | (118,103) | | | $ | 13,282,437 | | | $ | — | |
| United Kingdom | | — | | | 1,277,010 | | | — | | | — | | | — | | | 1,277,010 | | | 2,299,479 | |
| Canada | | — | | | 427,317 | | | 1,015,728 | | | 330,682 | | | (234,084) | | | 1,539,643 | | | 835,211 | |
| Totals | | $ | 354,000 | | | $ | 12,614,327 | | | $ | 2,200,626 | | | $ | 1,282,324 | | | $ | (352,187) | | | $ | 16,099,090 | | | $ | 3,134,690 | |
| | | | | | | | | | | | | | | |
Notes:
(1) Represents principal amounts due excluding unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(2) The 2026 maturity reflects the principal outstanding on our unsecured commercial paper program (none outstanding at June 30, 2022). The unsecured revolving credit facility is comprised of a $1,000,000,000 tranche that matures on June 4, 2026 (none outstanding at June 30, 2022) and a $3,000,000,000 tranche that matures on June 4, 2025 ($354,000,000 outstanding at June 30, 2022). Both tranches may be extended for two successive terms of six months at our option. Commercial paper borrowings are backstopped by the unsecured revolving credit facility. As such, we calculate the weighted average remaining term of our commercial paper borrowings using the extended maturity date of the unsecured revolving credit facility.
(3) 2027 includes a $1,000,000,000 unsecured term loan and a CAD $250,000,000 unsecured term loan (approximately $194,235,000 USD at June 30, 2022). The loans mature on July 19, 2026. The interest rates on the loans are adjusted SOFR + 0.85% for USD and CDOR + 0.85% for CAD. Both term loans may be extended for two successive terms of six months at our option.
(4) 2027 includes CAD $300,000,000 of 2.95% senior unsecured notes (approximately $233,082,000 USD at June 30, 2022) that matures on January 15, 2027.
(5) 2028 includes £550,000,000 of 4.80% senior unsecured notes (approximately $668,910,000 USD at June 30, 2022). The notes mature on November 20, 2028.
(6) Thereafter includes £500,000,000 of 4.50% senior unsecured notes (approximately $608,100,000 USD at June 30, 2022). The notes mature on December 1, 2034.
(7) Excludes operating lease liabilities of $300,829,000 and finance lease liabilities of $109,888,000 related to ASC 842 adoption.
(8) Based on variable interest rates and foreign currency exchange rates in effect as of June 30, 2022. The interest rate on the unsecured revolving credit facility is adjusted SOFR + 0.775%. Commercial paper, senior notes and secured debt average interest rate represents the face value note rate. Includes the impact of notional swaps to convert fixed rate debt to SOFR-based floating rate debt, LIBOR-based floating rate debt and CDOR-based floating rate debt to fixed rate debt.
(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 $134,880,000, 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.
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/post-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. Occupancy metrics are reflected at our pro rata share.
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 and for which substantially all contractual rent during the period has not been collected 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 restricted cash. We expect to maintain capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current profile. The ratios are based on EBITDA and Adjusted EBITDA. EBITDA is defined as earnings (net income per income statement) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding unconsolidated entities and including adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses/impairments on properties, gains/losses on derivatives and financial instruments, other expenses, other impairment charges and other adjustments deemed appropriate in management's opinion. We believe that EBITDA and Adjusted EBITDA, along with net income, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. We primarily use these measures to determine our interest coverage ratio, which represents EBITDA and Adjusted EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA and Adjusted EBITDA divided by fixed charges. Fixed charges include total interest and secured debt principal amortization. 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 restricted cash), 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.
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| Supplemental Reporting Measures | |
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| (dollars in thousands) | | | | | | | | |
| Non-GAAP Reconciliations | | | | | | | | |
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| NOI Reconciliation | | 2Q21 | | 3Q21 | | 4Q21 | | 1Q22 | | 2Q22 |
| Net income (loss) | | $ | 45,757 | | | $ | 190,336 | | | $ | 66,194 | | | $ | 65,751 | | | $ | 95,672 | |
| Loss (gain) on real estate dispositions, net | | (44,668) | | | (119,954) | | | (11,673) | | | (22,934) | | | 3,532 | |
| Loss (income) from unconsolidated entities | | 7,976 | | | 15,832 | | | 12,174 | | | 2,884 | | | 7,058 | |
| Income tax expense (benefit) | | (2,221) | | | 4,940 | | | 2,051 | | | 5,013 | | | 3,065 | |
| Other expenses | | 11,687 | | | 3,575 | | | 15,483 | | | 26,069 | | | 35,166 | |
| Impairment of assets | | 23,692 | | | 1,490 | | | 2,357 | | | — | | | — | |
| Provision for loan losses, net | | 6,197 | | | (271) | | | (39) | | | (804) | | | 165 | |
| Loss (gain) on extinguishment of debt, net | | 55,612 | | | (5) | | | (1,090) | | | (12) | | | 603 | |
| Loss (gain) on derivatives and financial instruments, net | | (359) | | | (8,078) | | | (830) | | | 2,578 | | | (1,407) | |
| General and administrative expenses | | 31,436 | | | 32,256 | | | 33,109 | | | 37,706 | | | 36,554 | |
| Depreciation and amortization | | 240,885 | | | 267,754 | | | 284,501 | | | 304,088 | | | 310,295 | |
| Interest expense | | 122,341 | | | 122,522 | | | 121,848 | | | 121,696 | | | 127,750 | |
| Consolidated net operating income | | 498,335 | | | 510,397 | | | 524,085 | | | 542,035 | | | 618,453 | |
NOI attributable to unconsolidated investments(1) | | 21,180 | | | 20,042 | | | 20,287 | | | 20,142 | | | 23,648 | |
NOI attributable to noncontrolling interests(2) | | (43,786) | | | (31,061) | | | (27,889) | | | (34,999) | | | (82,804) | |
Pro rata net operating income (NOI)(3) | | $ | 475,729 | | | $ | 499,378 | | | $ | 516,483 | | | $ | 527,178 | | | $ | 559,297 | |
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| 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 | | $ | 1,000,962 | | | $ | 144,425 | | | $ | 166,220 | | | $ | 52,052 | | | $ | 34,688 | | | $ | 3,665 | | | $ | 1,402,012 | |
| Property operating expenses | | (777,178) | | | (7,778) | | | (51,177) | | | (100) | | | (3,837) | | | (2,645) | | | (842,715) | |
NOI(3) | | 223,784 | | | 136,647 | | | 115,043 | | | 51,952 | | | 30,851 | | | 1,020 | | | 559,297 | |
| Adjust: | | | | | | | | | | | | | | |
| Interest income | | (1,642) | | | (31,725) | | | (65) | | | — | | | (5,499) | | | — | | | (38,931) | |
| Other income | | 1,251 | | | (1,786) | | | (2,347) | | | — | | | — | | | (3,665) | | | (6,547) | |
| Sold / held for sale | | 233 | | | 56 | | | (15) | | | (462) | | | (1,814) | | | — | | | (2,002) | |
Non operational(4) | | 1,198 | | | — | | | 84 | | | — | | | (509) | | | — | | | 773 | |
Non In-Place NOI(5) | | (7,073) | | | (11,435) | | | (3,627) | | | (8,464) | | | (725) | | | 2,645 | | | (28,679) | |
Timing adjustments(6) | | 6,198 | | | 117 | | | 1,007 | | | — | | | — | | | — | | | 7,322 | |
| Total adjustments | | 165 | | | (44,773) | | | (4,963) | | | (8,926) | | | (8,547) | | | (1,020) | | | (68,064) | |
| In-Place NOI | | 223,949 | | | 91,874 | | | 110,080 | | | 43,026 | | | 22,304 | | | — | | | 491,233 | |
| Annualized In-Place NOI | | $ | 895,796 | | | $ | 367,496 | | | $ | 440,320 | | | $ | 172,104 | | | $ | 89,216 | | | $ | — | | | $ | 1,964,932 | |
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| Same Store Property Reconciliation | | | | | | | | | | |
| | Seniors Housing Operating | | Seniors Housing
Triple-net | | Outpatient Medical | | Health System | | Long-Term
/Post-Acute Care | | Total |
| Total properties | | 904 | | | 312 | | | 397 | | | 205 | | | 93 | | | 1,911 | |
Recent acquisitions/ development conversions(7) | | (203) | | | (18) | | | (30) | | | (1) | | | — | | | (252) | |
| Under development | | (49) | | | (1) | | | (6) | | | — | | | — | | | (56) | |
Under redevelopment(8) | | (4) | | | — | | | (3) | | | — | | | (4) | | | (11) | |
| Current held for sale | | (2) | | | — | | | (1) | | | (4) | | | (7) | | | (14) | |
| Land parcels, loans and sub-leases | | (13) | | | (10) | | | (6) | | | — | | | — | | | (29) | |
Transitions(9) | | (99) | | | (1) | | | — | | | — | | | (3) | | | (103) | |
Other(10) | | (2) | | | — | | | — | | | — | | | (3) | | | (5) | |
| Same store properties | | 532 | | | 282 | | | 351 | | | 200 | | | 76 | | | 1,441 | |
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 and includes an adjustment to remove NOI related to certain leasehold properties. See page 15 for more information.
(3) Represents Welltower's pro rata share of NOI. See page 15 for more information.
(4) Primarily includes development properties and land parcels.
(5) Primarily represents non-cash NOI.
(6) Represents timing adjustments for current quarter acquisitions, construction conversions and segment or operator transitions
(7) Acquisitions and development conversions will enter the same store pool 5 full quarters after acquisition or certificate of occupancy.
(8) Redevelopment properties will enter the same store pool after 5 full quarters of operations post redevelopment completion.
(9) 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.
(10) Represents properties that are either closed or being closed.
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| Supplemental Reporting Measures | |
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| (dollars in thousands at Welltower pro rata ownership) | | |
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| Same Store NOI Reconciliation | | 2Q21 | | 3Q21 | | 4Q21 | | 1Q22 | | 2Q22 | | Y/o/Y |
| Seniors Housing Operating | | | | | | | | | | | | |
| NOI | | $ | 143,751 | | | $ | 167,855 | | | $ | 178,963 | | | $ | 195,043 | | | $ | 223,784 | | | |
| Non-cash NOI on same store properties | | 12,268 | | | (98) | | | (36) | | | (74) | | | (204) | | | |
| NOI attributable to non-same store properties | | (13,661) | | | (30,018) | | | (35,493) | | | (51,940) | | | (55,167) | | | |
Currency and ownership adjustments(1) | | (1,638) | | | (502) | | | (615) | | | (238) | | | 335 | | | |
Normalizing adjustment for government grants(2) | | (8,130) | | | (3,915) | | | (18,051) | | | (1,304) | | | (15,777) | | | |
Normalizing adjustment for management fee reduction(3) | | (2,044) | | | — | | | — | | | — | | | — | | | |
Normalizing adjustment for prior period allowance(4) | | 1,670 | | | — | | | — | | | — | | | — | | | |
Normalizing adjustment for casualty related expenses, net(5) | | 1,824 | | | 1,114 | | | 4,230 | | | (249) | | | 1,259 | | | |
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Other normalizing adjustments(6) | | (356) | | | (863) | | | (473) | | | — | | | — | | | |
SSNOI(7) | | 133,684 | | | 133,573 | | | 128,525 | | | 141,238 | | | 154,230 | | | 15.4 | % |
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| Seniors Housing Triple-net | | | | | | | | | | | | |
| NOI | | 130,983 | | | 139,166 | | | 142,478 | | | 135,939 | | | 136,647 | | | |
| Non-cash NOI on same store properties | | (7,108) | | | (5,989) | | | (4,671) | | | (4,578) | | | (10,862) | | | |
| NOI attributable to non-same store properties | | (47,009) | | | (53,562) | | | (53,186) | | | (44,907) | | | (42,880) | | | |
Currency and ownership adjustments(1) | | (497) | | | (197) | | | 266 | | | 437 | | | 1,415 | | | |
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Other normalizing adjustments(6) | | 323 | | | (117) | | | 59 | | | (213) | | | — | | | |
| SSNOI | | 76,692 | | | 79,301 | | | 84,946 | | | 86,678 | | | 84,320 | | | 9.9 | % |
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| Outpatient Medical | | | | | | | | | | | | |
| NOI | | 114,330 | | | 111,207 | | | 113,768 | | | 112,998 | | | 115,043 | | | |
| Non-cash NOI on same store properties | | (2,744) | | | (1,956) | | | (2,549) | | | (2,099) | | | (2,468) | | | |
| NOI attributable to non-same store properties | | (11,865) | | | (8,557) | | | (9,398) | | | (8,086) | | | (10,407) | | | |
Currency and ownership adjustments(1) | | (1) | | | 350 | | | (189) | | | 118 | | | (58) | | | |
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Other normalizing adjustments(6) | | (348) | | | (1,014) | | | 294 | | | (537) | | | (262) | | | |
| SSNOI | | 99,372 | | | 100,030 | | | 101,926 | | | 102,394 | | | 101,848 | | | 2.5 | % |
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| Health System | | | | | | | | | | | | |
| NOI | | 46,500 | | | 46,140 | | | 47,376 | | | 51,208 | | | 51,952 | | | |
| Non-cash NOI on same store properties | | (5,943) | | | (5,236) | | | (6,318) | | | (8,259) | | | (8,370) | | | |
| NOI attributable to non-same store properties | | (1,212) | | | (836) | | | (631) | | | (619) | | | (628) | | | |
Currency and ownership adjustments(1) | | 2,459 | | | 2,504 | | | 2,527 | | | 625 | | | — | | | |
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| SSNOI | | 41,804 | | | 42,572 | | | 42,954 | | | 42,955 | | | 42,954 | | | 2.8 | % |
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| Long-Term/Post-Acute Care | | | | | | | | | | | | |
| NOI | | 39,667 | | | 34,702 | | | 32,285 | | | 31,422 | | | 30,851 | | | |
| Non-cash NOI on same store properties | | (950) | | | (1,137) | | | (937) | | | (1,026) | | | (724) | | | |
| NOI attributable to non-same store properties | | (16,849) | | | (11,679) | | | (9,376) | | | (8,082) | | | (7,721) | | | |
Currency and ownership adjustments(1) | | (67) | | | (21) | | | (19) | | | (10) | | | 4 | | | |
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| SSNOI | | 21,801 | | | 21,865 | | | 21,953 | | | 22,304 | | | 22,410 | | | 2.8 | % |
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| Corporate | | | | | | | | | | | | |
| NOI | | 498 | | | 308 | | | 1,613 | | | 568 | | | 1,020 | | | |
| NOI attributable to non-same store properties | | (498) | | | (308) | | | (1,613) | | | (568) | | | (1,020) | | | |
| SSNOI | | — | | | — | | | — | | | — | | | — | | | |
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| Total | | | | | | | | | | | | |
| NOI | | 475,729 | | | 499,378 | | | 516,483 | | | 527,178 | | | 559,297 | | | |
| Non-cash NOI on same store properties | | (4,477) | | | (14,416) | | | (14,511) | | | (16,036) | | | (22,628) | | | |
| NOI attributable to non-same store properties | | (91,094) | | | (104,960) | | | (109,697) | | | (114,202) | | | (117,823) | | | |
Currency and ownership adjustments(1) | | 256 | | | 2,134 | | | 1,970 | | | 932 | | | 1,696 | | | |
| Normalizing adjustments, net | | (7,061) | | | (4,795) | | | (13,941) | | | (2,303) | | | (14,780) | | | |
| SSNOI | | $ | 373,353 | | | $ | 377,341 | | | $ | 380,304 | | | $ | 395,569 | | | $ | 405,762 | | | 8.7 | % |
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Notes:
(1) Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.2738 and to translate UK properties at a GBP/USD rate of 1.3501.
(2) Represents normalizing adjustment related to amounts recognized related to the Health and Human Services Provider Relief Fund in the United States and similar programs in the United Kingdom and Canada.
(3) Represents normalizing adjustment related to a management fee reduction for one Seniors Housing Operating partner.
(4) Represents normalizing adjustment related to an allowance of prior period rent related to one Seniors Housing Operating lease.
(5) Represents normalizing adjustment related to casualty related expenses net of any insurance reimbursements.
(6) Represents aggregate normalizing adjustments which are individually less than 0.50% of SSNOI growth per property type.
(7) SHO SSNOI includes expenses that are directly attributable to the COVID-19 pandemic net of any reimbursements exclusive of those included in (2) above.
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| Supplemental Reporting Measures | |
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| (dollars in thousands, except REVPOR, SS REVPOR and SSNOI/unit) | | |
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| SHO REVPOR Reconciliation | | United States | | United Kingdom | | Canada | | Total |
| Consolidated SHO revenues | | $ | 859,987 | | | $ | 99,647 | | | $ | 111,576 | | | $ | 1,071,210 | |
Unconsolidated SHO revenues attributable to Welltower(1) | | 28,910 | | | — | | | 22,546 | | | 51,456 | |
SHO revenues attributable to noncontrolling interests(2) | | (89,739) | | | (9,339) | | | (22,626) | | | (121,704) | |
Pro rata SHO revenues(3) | | 799,158 | | | 90,308 | | | 111,496 | | | 1,000,962 | |
| SHO interest and other income | | (2,476) | | | (16) | | | 2,102 | | | (390) | |
| SHO revenues attributable to sold and held for sale properties | | (261) | | | — | | | — | | | (261) | |
Currency and ownership adjustments(4) | | — | | | 6,731 | | | 211 | | | 6,942 | |
| SHO local revenues | | 796,420 | | | 97,023 | | | 113,809 | | | 1,007,252 | |
| Average occupied units/month | | 47,524 | | | 3,320 | | | 12,461 | | | 63,305 | |
| REVPOR/month in USD | | $ | 5,601 | | | $ | 9,768 | | | $ | 3,053 | | | $ | 5,318 | |
REVPOR/month in local currency(4) | | | | £ | 7,235 | | | $ | 3,889 | | | |
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| Reconciliations of SHO SS REVPOR Growth, SSNOI Growth and SSNOI/Unit |
| | | | | | | |
| United States | | United Kingdom | | Canada | | Total |
| 2Q21 | | 2Q22 | | 2Q21 | | 2Q22 | | 2Q21 | | 2Q22 | | 2Q21 | | 2Q22 |
| SHO SS REVPOR Growth | | | | | | | | | | | | | | | |
| Consolidated SHO revenues | $ | 540,559 | | | $ | 859,987 | | | $ | 98,221 | | | $ | 99,647 | | | $ | 103,769 | | | $ | 111,576 | | | $ | 742,549 | | | $ | 1,071,210 | |
Unconsolidated SHO revenues attributable to WELL(1) | 22,788 | | | 28,910 | | | — | | | — | | | 22,178 | | | 22,546 | | | 44,966 | | | 51,456 | |
SHO revenues attributable to noncontrolling interests(2) | (24,334) | | | (89,739) | | | (12,267) | | | (9,339) | | | (22,746) | | | (22,626) | | | (59,347) | | | (121,704) | |
SHO pro rata revenues(3) | 539,013 | | | 799,158 | | | 85,954 | | | 90,308 | | | 103,201 | | | 111,496 | | | 728,168 | | | 1,000,962 | |
| Non-cash revenues on same store properties | (571) | | | (613) | | | — | | | — | | | — | | | — | | | (571) | | | (613) | |
| Revenues attributable to non-same store properties | (31,403) | | | (224,351) | | | (65,374) | | | (68,242) | | | (4,104) | | | (13,666) | | | (100,881) | | | (306,259) | |
Currency and ownership adjustments(4) | 766 | | | 147 | | | 97 | | | 1,642 | | | (3,545) | | | 200 | | | (2,682) | | | 1,989 | |
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SHO SS revenues(5) | 507,805 | | | 574,341 | | | 20,677 | | | 23,708 | | | 95,552 | | | 98,030 | | | 624,034 | | | 696,079 | |
Avg. occupied units/month(6) | 27,263 | | | 29,648 | | | 742 | | | 832 | | | 10,849 | | | 10,989 | | | 38,854 | | | 41,469 | |
SHO SS REVPOR(7) | $ | 6,226 | | | $ | 6,475 | | | $ | 9,314 | | | $ | 9,524 | | | $ | 2,944 | | | $ | 2,982 | | | $ | 5,368 | | | $ | 5,611 | |
| SS REVPOR YOY growth | — | % | | 4.0 | % | | — | % | | 2.3 | % | | — | % | | 1.3 | % | | — | | | 4.5 | % |
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| SHO SSNOI Growth | | | | | | | | | | | | | | | |
| Consolidated SHO NOI | $ | 107,314 | | | $ | 237,393 | | | $ | 22,663 | | | $ | 16,579 | | | $ | 30,211 | | | $ | 27,939 | | | $ | 160,188 | | | $ | 281,911 | |
Unconsolidated SHO NOI attributable to WELL(1) | 3,421 | | | 5,104 | | | — | | | — | | | 7,867 | | | 6,843 | | | 11,288 | | | 11,947 | |
SHO NOI attributable to noncontrolling interests(2) | (18,682) | | | (63,881) | | | (2,612) | | | (1,279) | | | (6,431) | | | (4,914) | | | (27,725) | | | (70,074) | |
SHO pro rata NOI(3) | 92,053 | | | 178,616 | | | 20,051 | | | 15,300 | | | 31,647 | | | 29,868 | | | 143,751 | | | 223,784 | |
| Non-cash NOI on same store properties | 12,270 | | | (205) | | | — | | | — | | | (2) | | | 1 | | | 12,268 | | | (204) | |
| NOI attributable to non-same store properties | 1,712 | | | (38,011) | | | (14,805) | | | (11,428) | | | (568) | | | (5,728) | | | (13,661) | | | (55,167) | |
Currency and ownership adjustments(4) | (524) | | | (8) | | | 37 | | | 285 | | | (1,151) | | | 58 | | | (1,638) | | | 335 | |
Normalizing adjustment for government grants(8) | (5,021) | | | (15,777) | | | — | | | — | | | (3,109) | | | — | | | (8,130) | | | (15,777) | |
Normalizing adjustment for management fee reduction(9) | — | | | — | | | — | | | — | | | (2,044) | | | — | | | (2,044) | | | — | |
Normalizing adjustment for prior period allowance(10) | 1,670 | | | — | | | — | | | — | | | — | | | — | | | 1,670 | | | — | |
Normalizing adjustment for casualty related expenses(11) | 1,824 | | | 1,259 | | | — | | | — | | | — | | | — | | | 1,824 | | | 1,259 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Other normalizing adjustments(12) | (356) | | | — | | | — | | | — | | | — | | | — | | | (356) | | | — | |
SHO pro rata SSNOI(5) | $ | 103,628 | | | $ | 125,874 | | | $ | 5,283 | | | $ | 4,157 | | | $ | 24,773 | | | $ | 24,199 | | | $ | 133,684 | | | $ | 154,230 | |
| SHO SSNOI growth | | | 21.5 | % | | | | (21.3) | % | | | | (2.3) | % | | | | 15.4 | % |
| | | | | | | | | | | | | | | |
| SHO SSNOI/Unit | | | | | | | | | | | | | | | |
Trailing four quarters' SSNOI(5) | | | $ | 445,377 | | | | | $ | 18,344 | | | | | $ | 93,844 | | | | | $ | 557,566 | |
Average units in service(13) | | | 37,453 | | | | | 1,203 | | | | | 13,996 | | | | | 52,652 | |
| SSNOI/unit in USD | | | $ | 11,892 | | | | | $ | 15,249 | | | | | $ | 6,705 | | | | | $ | 10,590 | |
SSNOI/unit in local currency(4) | | | | | | | £ | 11,295 | | | | | $ | 8,541 | | | | | |
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 and includes an adjustment to remove revenues and NOI related to certain leasehold properties. See page 15 for more information.
(3) Represents SHO revenues/NOI at Welltower pro rata ownership. See pages 15 & 22 for more information.
(4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.2738 and to translate UK properties at a GBP/USD rate of 1.3501.
(5) Represents SS SHO revenues/SSNOI at Welltower pro rata ownership. See page 22 for more information.
(6) Represents average occupied units for SS properties related solely to referenced country on a pro rata basis.
(7) Represents pro rata SS average revenues generated per occupied room per month.
(8) Represents normalizing adjustment related to amounts recognized related to the Health and Human Services Provider Relief Fund in the United States and similar programs in the United Kingdom and Canada.
(9) Represents normalizing adjustment related to a management fee reduction for one Seniors Housing Operating partner.
(10) Represents normalizing adjustment related to an allowance of prior period rent related to one Seniors Housing Operating lease.
(11) Represents normalizing adjustment related to casualty related expenses net of any insurance reimbursements.
(12) Represents aggregate normalizing adjustments which are individually less than .50% of SSNOI growth.
(13) 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 impact of the COVID-19 pandemic; uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation; the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; Welltower’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting Welltower’s properties; Welltower’s ability to re-lease space at similar rates as vacancies occur; Welltower’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower’s properties; changes in rules or practices governing Welltower’s financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower’s ability to maintain its qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower’s reports filed from time to time with the SEC. 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 9, 2022 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.
