What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-07-30 compared with 2021-04-29 · 354 added, 590 removed, 1069 unchanged (47% of the section changed)

4 unchanged sentences

(In thousands)

March 31, 2021 (Unaudited) December 31, 2020 (Note)

June 30, 2021 (Unaudited) December 31, 2020 (Note)

Real estate investments:

1 unchanged sentence

Land and land improvements $ 3,448,542 $ 3,440,650

$ 3,397,055 $ 3,440,650

Buildings and improvements 28,124,236 28,024,971

27,667,188 28,024,971

Acquired lease intangibles 1,516,971 1,500,030

1,506,823 1,500,030

Real property held for sale, net of accumulated depreciation 592,699 216,613

564,062 216,613

Construction in progress 458,844 487,742

542,302 487,742

Less accumulated depreciation and amortization ( 6,415,676 ) ( 6,104,297 )

( 6,212,432 ) ( 6,104,297 )

Net real property owned 27,725,616 27,565,709

27,464,998 27,565,709

Right of use assets, net 453,621 465,866

3 unchanged sentences

Investments in unconsolidated entities 1,020,112 946,234

1,020,010 946,234

68,321 68,321

Goodwill 68,321 68,321

Cash and cash equivalents 513,602 1,545,046

2,131,846 1,545,046

Restricted cash 295,102 475,997

426,976 475,997

Straight-line rent receivable 331,381 344,066

312,721 344,066

Receivables and other assets 671,062 629,031

624,918 629,031

Total other assets 2,899,580 4,008,695

$ 32,176,116 $ 32,483,642

$ 32,992,251 $ 32,483,642

Liabilities and equity

Unsecured credit facility and commercial paper $ — $ —

Senior unsecured notes 11,157,732 11,420,790

$ 12,183,710 $ 11,420,790

2,329,474 2,377,930

Secured debt 2,304,178 2,377,930

Lease liabilities 409,628 418,266

408,916 418,266

Accrued expenses and other liabilities 1,061,370 1,041,594

1,023,219 1,041,594

Total liabilities

2 unchanged sentences

392,379 343,490

418,866 418,691

Common stock 423,933 418,691

Capital in excess of par value 21,161,838 20,823,145

20,814,196 20,823,145

Treasury stock ( 108,633 ) ( 104,490 )

( 106,519 ) ( 104,490 )

Cumulative net income 8,425,401 8,327,598

8,399,144 8,327,598

Cumulative dividends ( 13,854,145 ) ( 13,343,721 )

( 13,598,673 ) ( 13,343,721 )

Accumulated other comprehensive income (loss) ( 127,948 ) ( 148,504 )

( 128,136 ) ( 148,504 )

Total Welltower Inc.

stockholders’ equity 15,920,446 15,972,719

15,798,878 15,972,719

Noncontrolling interests 930,383 908,853

16,850,829 16,881,572

16,691,017 16,881,572

Total liabilities and equity

6 unchanged sentences

(In thousands, except per share data)

Three Months Ended

Resident fees and services

Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Resident fees and services $ 740,891 $ 769,560 $ 1,464,355 $ 1,619,532

Rental income 354,723 396,305 657,566 786,265

302,843 389,960

Interest income 38,448 16,069 58,027 31,310

19,579 15,241

Other income 6,930 6,541 13,106 9,970

Total revenues 1,140,992 1,188,475 2,193,054 2,447,077

1,052,062 1,258,602

Property operating expenses 642,657 660,764 1,259,983 1,342,545

617,326 681,781

Depreciation and amortization 240,885 265,371 485,311 540,172

244,426 274,801

Interest expense 122,341 126,357 245,483 268,364

123,142 142,007

General and administrative expenses 31,436 34,062 61,362 69,543

29,926 35,481

Loss (gain) on derivatives and financial instruments, net ( 359 ) 1,434 1,575 9,085

2 unchanged sentences

Impairment of assets 23,692 75,151 47,260 102,978

23,568 27,827

Other expenses 11,687 19,411 22,681 25,703

Total expenses 1,134,148 1,184,221 2,182,204 2,367,133

1,048,056 1,182,912

Income (loss) from continuing operations before income taxes and other items 6,844 4,254 10,850 79,944

5 unchanged sentences

Net income (loss) attributable to noncontrolling interests (1)

19,500 ( 20,030 ) 20,146 ( 934 )

Net income (loss) attributable to common stockholders $ 26,257 $ 179,246 $ 97,803 $ 489,530

Average number of common shares outstanding:

417,241 410,306

419,079 412,420

Basic 417,452 417,084 417,360 413,696

Diluted 419,305 419,121 419,205 415,775

Earnings per share:

Income (loss) from continuing operations $ 0.11 $ 0.38 $ 0.28 $ 1.18

$ 0.17 $ 0.80

Net income (loss) attributable to common stockholders $ 0.06 $ 0.43 $ 0.23 $ 1.18

$ 0.17 $ 0.76

Income (loss) from continuing operations $ 0.11 $ 0.38 $ 0.28 $ 1.18

$ 0.17 $ 0.80

Net income (loss) attributable to common stockholders (2)

7 unchanged sentences

(In thousands)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Net income $ 45,757 $ 159,216 $ 117,949 $ 488,596

13 unchanged sentences

(In thousands)

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Stock Capital in

9 unchanged sentences

Net income (loss) 71,546 ( 177 ) 71,369

71,546 ( 177 ) 71,369

Other comprehensive income (loss) 20,368 3,729 24,097

20,368 3,729 24,097

Total comprehensive income 95,466

4 unchanged sentences

Common stock dividends ( 254,952 ) ( 254,952 )

( 254,952 ) ( 254,952 )

Balances at March 31, 2021 $ 418,866 $ 20,814,196 $ ( 106,519 ) $ 8,399,144 $ ( 13,598,673 ) $ ( 128,136 ) $ 892,139 $ 16,691,017

Three Months Ended March 31, 2020

Comprehensive income:

Net income (loss) 26,257 19,695 45,952

Other comprehensive income (loss) 188 2,919 3,107

Total comprehensive income 49,059

Net change in noncontrolling interests ( 17,377 ) 15,630 ( 1,747 )

Amounts related to stock incentive plans, net of forfeitures 51 4,504 ( 2,114 ) 2,441

Net proceeds from issuance of common stock 5,016 360,515 365,531

Dividends paid:

Common stock dividends ( 255,472 ) ( 255,472 )

Balances at June 30, 2021 $ 423,933 $ 21,161,838 $ ( 108,633 ) $ 8,425,401 $ ( 13,854,145 ) $ ( 127,948 ) $ 930,383 $ 16,850,829

Six Months Ended June 30, 2020

Stock Capital in

11 unchanged sentences

Net income (loss) 310,284 18,988 329,272

310,284 18,988 329,272

Other comprehensive income (loss) 15,944 ( 21,955 ) ( 6,011 )

15,944 ( 21,955 ) ( 6,011 )

Total comprehensive income 323,261

4 unchanged sentences

Common stock dividends ( 356,001 ) ( 356,001 )

( 356,001 ) ( 356,001 )

Balances at March 31, 2020 $ 418,226 $ 20,818,242 $ ( 86,975 ) $ 7,659,038 $ ( 12,579,535 ) $ ( 96,213 ) $ 933,554 $ 17,066,337

Comprehensive income:

Net income (loss) 179,246 18,659 197,905

Other comprehensive income (loss) ( 20,643 ) 6,298 ( 14,345 )

Total comprehensive income 183,560

Net change in noncontrolling interests 7,299 ( 70,124 ) ( 62,825 )

Amounts related to stock incentive plans, net of forfeitures 28 7,404 832 8,264

Net proceeds from issuance of common stock 89 3,604 3,693

Repurchase of Common Stock ( 7,656 ) ( 7,656 )

Dividends paid:

Common stock dividends ( 254,846 ) ( 254,846 )

Balances at June 30, 2020 $ 418,343 $ 20,836,549 $ ( 93,799 ) $ 7,838,284 $ ( 12,834,381 ) $ ( 116,856 ) $ 888,387 $ 16,936,527

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

2 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Operating activities:

8 unchanged sentences

Stock-based compensation expense

10,333 14,373

Loss (gain) on derivatives and financial instruments, net

26 unchanged sentences

Principal collected on loans receivable

248,841 12,796

Other investments, net of payments

3 unchanged sentences

Distributions by unconsolidated entities

171,250 8,811

Proceeds from (payments on) derivatives

7 unchanged sentences

Net proceeds from issuance of senior unsecured notes 1,208,241 1,588,549

Payments to extinguish senior unsecured notes

( 1,533,752 ) —

Net proceeds from the issuance of secured debt

2 unchanged sentences

Net proceeds from the issuance of common stock

366,464 595,313

Repurchase of common stock

Payments for deferred financing costs and prepayment penalties

1 unchanged sentence

Contributions by noncontrolling interests (1)

65,982 13,764

Distributions to noncontrolling interests (1)

27 unchanged sentences

In the opinion of management, all adjustments (such as normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2021 are not necessarily an indication of the results that may be expected for the year ending December 31, 2021.

Operating results for the six months ended June 30, 2021 are not necessarily an indication of the results that may be expected for the year ending December 31, 2021.

For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Impact of COVID-19 Pandemic

The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others.

The COVID-19 pandemic could have material and adverse effects on our financial condition, results of operations and cash flows in the future, including but not limited to, the following:

The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, the direct and indirect economic effects of the pandemic and containment measures, the impact of new variants, the effectiveness of vaccines, the overall pace of recovery, among others.

The COVID-19 pandemic could have material and adverse effects on our financial condition, results of operations and cash flows in the future.

Our Seniors Housing Operating revenues are dependent on occupancy.

Spot occupancy has continued to decline since the beginning of the pandemic, dropping to 73.6 % as of March 31, 2021 compared to 75.9 % as of December 31, 2020.

Approximately 99 % of communities are currently accepting new residents, resulting in an acceleration in move-in activity and an increase in occupancy of approximately 60 basis points from a pandemic-low on March 12, 2021 to 73.8% on April 23, 2021.

Additionally, r apid distribution and a high acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S.

Spot occupancy declined since the beginning of the pandemic, reaching a low of 72.3 % on March 12, 2021.

As of June 30, 2021, virtually all communities are now accepting new residents, resulting in an increase in move-in activity and occupancy rates of approximately 230 basis points since the low point to 74.6 % on June 30, 2021.

Additionally, rapid distribution and a high acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S.

has resulted in a significant decrease in total resident case counts since mid-January across the portfolio.

Spot occupancy rates from the start of the pandemic through March 31, 2021 are as follows:

February 2020 December 2020 January 2021 February 2021 March 2021

Monthly spot occupancy rates through June 30, 2021 are as follows:

December 2020 January 2021 February 2021 March 2021 April 2021 May 2021 June 2021

Spot occupancy (1)

1 unchanged sentence

Sequential occupancy change (2)

(1) Spot occupancy represents approximate month end occupancy at our share for properties in operation as of February 29, 2020, including unconsolidated properties but excluding acquisitions, dispositions and development conversions since this date.

Increased Seniors Housing Operating expenses are expected to continue until the pandemic subsides.

( 1.4 ) % ( 0.8 ) % 0.1 % 0.5 % 0.5 % 0.9 %

(1) Spot occupancy represents approximate month end occupancy at our share for 592 properties in operation as of December 31, 2020, including unconsolidated properties but excluding acquisitions, dispositions and development conversions since this date.

(2) Sequential occupancy changes are based on actual spot occupancy and may not recalculate due to rounding.

On a month-to-date basis, as of July 23, 2021, Seniors Housing Operating occupancy has increased approximately 40 basis points.

Occupancy continued to strengthen in the U.S.

with gains of approximately 60 basis points and 30 basis points, respectively, while occupancy in Canada remained flat over the same period.

Property-level operating expenses associated with the COVID-19 pandemic relating to our Seniors Housing Operating portfolio, net of reimbursements including Provider Relief Funds and similar programs in the U.K.

and Canada, resulted in a benefit of approximately $ 21,204,000 for the three months ended March 31, 2021 as compared to an expense of $ 7,294,000 during the three months ended March 31, 2020.

and Canada, resulted in a net benefit of approximately $ 1,535,000 and $ 22,792,000 for the three and six months ended June 30, 2021, respectively, as compared to a net expense of $ 40,127,000 and $ 47,421,000 during the three and six months ended June 30, 2020, respectively.

These expenses were incurred as a result of the introduction of public health measures and other regulations affecting our properties, as well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor and property cleaning expenses and expenditures related to our efforts to procure personal protective equipment ("PPE") and supplies, net of reimbursements.

Certain new expenses incurred since the start of the pandemic may continue on an ongoing basis as part of new health and safety protocols.

In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund related to our Seniors Housing Operating portfolio.

During the first quarter, we received total Provider Relief Funds of approximately $ 35,682,000 , which was recognized as a reduction to COVID-19 costs within property operating expenses.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

• Our Triple-net operators are experiencing similar occupancy declines and operating costs as described above with respect to our Seniors Housing Operating properties.

In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund related to our Seniors Housing Operating portfolio.

During the six months ended June 30, 2021, we received total Provider Relief Funds of approximately $ 40,976,000 , which was recognized as a reduction to COVID-19 costs within property operating expenses.

Our Triple-net operators have experienced similar occupancy declines and operating costs as described above with respect to our Seniors Housing Operating properties.

Additionally, long-term/post-acute care facilities are generally experiencing a higher degree of occupancy declines.

2 unchanged sentences

In addition, operators of long-term/post-acute care facilities have generally received funds from Phase 1 of the Provider Relief Fund and operators of assisted living facilities have generally received funds from Phases 2 and 3 of the Provider Relief Fund.

During the first quarter, we collected approximately 96 % of rent due from operators under Triple-net lease agreements (primarily seniors housing and post-acute care facilities).

During the six months ended June 30, 2021, we collected approximately 95 % of rent due from operators under Triple-net lease agreements (primarily seniors housing and post-acute care facilities).

No significant rent deferrals or rent concessions have been made.

In the Outpatient Medical segment we collected 99 % of rent due in the first quarter, with uncollected amounts primarily attributable to local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants.

Virtually all rent subject to approved deferral agreements has been repaid in full.

For both our Triple-net operators and Outpatient Medical tenants, we evaluate leases individually and recognize rent on a cash basis if collectibility of substantially all contractual rent payments is not probable.

We evaluate leases individually and recognize rent on a cash basis if collectibility of substantially all contractual rent payments is not probable.

To the extent the prolonged impact of the COVID-19 pandemic causes operators or tenants to seek further modifications of their lease agreements, we may recognize reductions in revenue and increases in uncollectible receivables.

20 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

Seniors Housing Operating Triple-net Outpatient

18 unchanged sentences

Total cash invested in real property, net of cash acquired $ 350,760 $ 349,534 $ 199,818 $ 900,112 $ 289,701 $ 29,901 $ 286,334 $ 605,936

(1) Excludes $ 580,000 of unrestricted and restricted cash acquired during the three months ended March 31, 2020.

(1) Excludes $ 301,000 and $ 580,000 of unrestricted and restricted cash acquired during the six months ended June 30, 2021 and June 30, 2020, respectively.

(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.

(3) R epresents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.

On June 21, 2021, we entered into a definitive agreement to acquire a portfolio of 86 seniors housing properties owned by Holiday Retirement for a total purchase price of $ 1,576,800,000 , which will be included in our Seniors Housing Operating segment.

Atria Senior Living will assume operations of the portfolio following its acquisition of the Holiday Retirement management company pursuant to an incentive-based management agreement.

We expect to close the transaction during the third quarter.

Construction Activity

The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented (in thousands):

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

Development projects:

Seniors Housing Operating

$ 58,844 $ 93,188

22,990 33,627

Outpatient Medical

101,867 43,493

Total development projects

183,701 170,308

Expansion projects

Total construction in progress conversions $ 183,701 $ 205,945

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Real Estate Intangibles

The following is a summary of our real estate intangibles, excluding those classified as held for sale, as of the dates indicated (dollars in thousands):

March 31, 2021 December 31, 2020

The following is a summary of our real estate intangibles, excluding those related to ground leases or classified as held for sale, as of the dates indicated (dollars in thousands):

June 30, 2021 December 31, 2020

In place lease intangibles $ 1,416,212 $ 1,406,705

9 unchanged sentences

Weighted-average amortization period in years 8.3 8.3

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of real estate intangible amortization income (expense) for the periods presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Rental income related to (above)/below market tenant leases, net $ 432 $ 402 $ 857 $ 925

11 unchanged sentences

We periodically sell properties for various reasons, including favorable market conditions, the exercise of tenant purchase options or reduction of concentrations (i.e., property type, relationship or geography).

At March 31, 2021, three Seniors Housing Operating, 61 Triple-net, and one Outpatient Medical properties with an aggregate real estate balance of $ 564,062,000 were classified as held for sale.

In addition to the real property balances held for sale, net other assets and (liabilities) of $ 37,389,000 are included in the Consolidated Balance Sheet related to the held for sale properties.

At June 30, 2021, two Seniors Housing Operating, 54 Triple-net, and two Outpatient Medical properties with an aggregate real estate balance of $ 592,699,000 were classified as held for sale.

In addition to the real property balances held for sale, net other assets and (liabilities) of $ 20,382,000 are included in the Consolidated Balance Sheets related to the held for sale properties.

Expected gross sales proceeds related to the held for sale properties is approximately $ 747,153,000 .

During the three months ended March 31, 2021, we recorded $ 12,098,000 of impairment charges related to one Triple-net property which was classified as held for sale for which the carrying value exceeded the estimated fair value less cost to sell.

Additionally, during the three months ended March 31, 2021, we recorded $ 11,470,000 of impairment charges related to one Seniors Housing Operating property and two Triple-net properties that were held for use in which the carrying value exceeded the estimated fair value.

During the three months ended March 31, 2020, we recorded $ 3,495,000 of impairment charges related to one Seniors Housing Operating property which was classified as held for sale for which the carrying value exceeded the estimated fair value less cost to sell.

Additionally, during the three months ended March 31, 2020, we recorded $ 24,332,000 of impairment charges related to two Triple-net properties that were held for use in which the carrying value exceeded the estimated fair value.

During the six months ended June 30, 2021, we recorded $ 18,077,000 of impairment charges related to three Triple-net properties and one Outpatient Medical property which were classified as held for sale for which the carrying value exceeded the estimated fair value less cost to sell.

Additionally, during the six months ended June 30, 2021, we recorded $ 29,183,000 of impairment charges related to two Seniors Housing Operating properties and two Triple-net properties that were held for use in which the carrying value exceeded the estimated fair value.

During the six months ended June 30, 2020, we recorded $ 75,151,000 of impairment charges related to 12 Seniors Housing Operating properties which were classified as held for sale for which the carrying value exceeded the estimated fair value less cost to sell.

Additionally, during the six months ended June 30, 2020, we recorded $ 27,827,000 of impairment charges related to one Seniors Housing Operating property and one Triple-net property that were held for use in which the carrying value exceeded the estimated fair value.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of our real property disposition activity for the periods presented (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Real estate dispositions:

Seniors Housing Operating

$ 112,809 $ 706,964

88,367 33,445

Outpatient Medical

7 unchanged sentences

The following represents the activity related to these properties for the periods presented (in thousands):

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Total revenues

1 unchanged sentence

Interest expense

323 3,395 1,438 8,302

Property operating expenses

1 unchanged sentence

Provision for depreciation

1,397 28,090 7,396 54,004

Total expenses

4,754 81,782 15,037 178,821

Income (loss) from real estate dispositions, net $ 14,687 $ 26,215 $ 33,906 $ 74,679

3 unchanged sentences

The components of lease expense were as follows for the period presented (in thousands):

Three Months Ended

Classification March 31, 2021 March 31, 2020

Six Months Ended

Classification June 30, 2021 June 30, 2020

Operating lease cost:

7 unchanged sentences

(1) Includes short-term leases which are immaterial.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental balance sheet information related to leases is as follows (in thousands):

Classification March 31, 2021 December 31, 2020

Classification June 30, 2021 December 31, 2020

Right of use assets:

11 unchanged sentences

Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.

During the three months ended March 31, 2021 and 2020, we reserved for straight-line rent receivable balances of $ 49,241,000 and $ 32,268,000 through rental income, relating to leases for which collection of substantially all contractual lease payments was no longer deemed probable.

During the six months ended June 30, 2021 and 2020, we reserved for straight-line rent receivable balances of $ 49,241,000 and $ 34,110,000 through rental income, relating to leases for which collection of substantially all contractual lease payments was no longer deemed probable.

Leases in our Triple-net and Outpatient Medical portfolios typically include some form of operating expense reimbursement by the tenant.

For the three months ended March 31, 2021, we recognized $ 302,843,000 of rental income related to operating leases, of which $ 46,026,000 was for variable lease payments which primarily represents the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes.

For the three months ended March 31, 2020, we recognized $ 389,960,000 of rental income related to operating leases, of which $ 55,754,000 was for variable lease payments.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended June 30, 2021, we recognized $ 657,566,000 of rental income related to operating leases, of which $ 89,890,000 was for variable lease payments which primarily represents the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes.

For the six months ended June 30, 2020, we recognized $ 786,265,000 of rental income related to operating leases, of which $ 104,605,000 was for variable lease payments.

Loans Receivable

3 unchanged sentences

Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of the risk of credit loss.

Accrued interest receivable was $ 15,981,000 and $ 15,615,000 as of March 31, 2021 and December 31, 2020, respectively, and is included in receivables and other assets on the Consolidated Balance Sheets.

Accrued interest receivable was $ 21,938,000 and $ 15,615,000 as of June 30, 2021 and December 31, 2020, respectively, and is included in receivables and other assets on the Consolidated Balance Sheets.

The following is a summary of our loans receivable (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Mortgage loans $ 935,572 $ 299,430

6 unchanged sentences

Total loans receivable, net of credit allowance $ 1,295,663 $ 683,641

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of our loan activity for the periods presented (in thousands):

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

Advances on loans receivable:

Investments in new loans

$ 902,189 $ 2,477

Draws on existing loans

4 unchanged sentences

Principal payments on loans

69,014 12,796

Net cash receipts on loans receivable 248,841 12,796

Net cash advances (receipts) on loans receivable $ 669,566 $ 6,742

Subsequent to quarter end, we provided £ 540 million of senior loan financing and a £ 30 million delayed facility to affiliates of Safanad, a global real estate and private equity firm, as part of the recapitalization of its investment in HC-One Group.

The loan has a 5 -year term and is fully collateralized by the shares and assets of the HC-One Group, including its underlying property portfolio of owned assets across the U.K.

Additionally, we will have the ability to participate in the recovery in the U.K.

seniors housing sector through both warrants and a £ 55 million equity investment.

The allowance for credit loss on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable.

During the quarter ended June 30, 2021, we provided £ 540 million (approximately $ 750,330,000 based on the Sterling/ U.S.

Dollar exchange rate as of the date of funding) of senior loan financing and a £ 30 million delayed facility for working capital and capital expenditures to affiliates of Safanad, a global real estate and private equity firm, as part of the recapitalization of its investment in HC-One Group.

The loan has a five-year term and is fully collateralized by the shares and assets of the HC-One Group, including its underlying property portfolio of owned assets across the U.K.

As part of the transaction, we received equity warrants which provide us the right to participate in the capital appreciation of HC-One Group above a designated price upon liquidation.

See Note 12 for additional details.

The allowance for credit losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable.

The determination of the credit allowance is based on a quarterly evaluation of each of these loans, including general economic conditions and estimated collectability of loan payments.

8 unchanged sentences

The following is a summary of our loans by credit loss category (in thousands):

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Loan category Years of Origination Loan Carrying Value Allowance for Credit Loss Net Loan Balance No.

8 unchanged sentences

In March 2020, we recognized a provision for loan losses of $ 6,898,000 to fully reserve for one Triple-net non-real estate loan receivable that was no longer deemed collectible.

Aside from this specific reserve, the remainder of the provision for loan losses relates to the application of the historical loss experience on the collective loan pools.

The following is a summary of the allowance for credit losses on loans receivable for the periods presented (in thousands):

Three Months Ended

March 31, 2021 March 31, 2020

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

June 30, 2021 June 30, 2020

Balance at beginning of period $ 224,036 $ 68,372

4 unchanged sentences

Balance at end of period $ 167,432 $ 81,985

(1) Includes $ 62,753,000 related to the Genesis Healthcare lease terminations for the six months ended June 30, 2021.

See Note 9 for further details.

The following is a summary of our deteriorated loans (in thousands):

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

Balance of deteriorated loans at end of period (1)

4 unchanged sentences

$ 3,122 $ 7,912

(1) Current year amounts include $ 2,250,000 and $ 3,623,000 of loans on non-accrual as of March 31, 2021 and December 31, 2020, respectively.

Prior year amounts include $ 9,534,000 and $ 2,534,000 as of March 31, 2020 and December 31, 2019, respectively.

(1) Current year amounts include $ 2,176,000 and $ 3,623,000 of loans on non-accrual as of June 30, 2021 and December 31, 2020, respectively.

Prior year amounts include $ 10,716,000 and $ 2,534,000 as of June 30, 2020 and December 31, 2019, respectively.

(2) Represents cash interest recognized in the period.

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We participate in a number of joint ventures, which generally invest in seniors housing and health care real estate.

The results of operations for these properties have been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our Consolidated Statements of Comprehensive Income as income or loss from unconsolidated entities.

Our share of the results of operations for these properties has been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our Consolidated Statements of Comprehensive Income as income or loss from unconsolidated entities.

The following is a summary of our investments in unconsolidated entities (dollars in thousands):

Percentage Ownership (1)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Seniors Housing Operating 10 % to 65 %

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(1) Includes ownership of investments classified as liabilities and excludes ownership of in substance real estate.

At March 31, 2021, the aggregate unamortized basis difference of our joint venture investments of $ 119,392,000 is primarily attributable to the difference between the amount for which we purchase our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the joint venture.

At June 30, 2021, the aggregate unamortized basis difference of our joint venture investments of $ 118,278,000 is primarily attributable to the difference between the amount for which we purchase our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the joint venture.

This difference is being amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

We have made loans totaling $ 365,488,000 related to eight properties as of March 31, 2021 for the development and construction of certain properties which are classified as in substance real estate investments.

We have made loans totaling $ 270,164,000 related to seven properties as of June 30, 2021 for the development and construction of certain properties which are classified as in substance real estate investments.

We believe that such borrowers typically represent variable interest entities ("VIE" or "VIEs") in accordance with ASC 810 Consolidation.

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Based on these assessments, the arrangements have been classified as in substance real estate investments.

We expect to fund an additional $ 36,059,000 during 2021 related to these investments.

We expect to fund an additional $ 20,209,000 related to these investments.

Credit Concentration

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See Note 18 for additional information and reconciliation.

The following table summarizes certain information about our credit concentration for the three months ended March 31, 2021, excluding our share of NOI in unconsolidated entities (dollars in thousands):

The following table summarizes certain information about our credit concentration for the six months ended June 30, 2021, excluding our share of NOI in unconsolidated entities (dollars in thousands):

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Concentration by relationship:

Number of Properties Total NOI Percent of NOI (2)

ProMedica 217 $ 111,157 12 %

Sunrise Senior Living (3)

166 109,494 12 %

ProMedica 216 53,031 13 %

Genesis Healthcare 52 26,871 7 %

85 45,928 5 %

Avery Healthcare 61 41,536 5 %

Genesis Healthcare 15 36,677 4 %

Remaining portfolio 972 588,279 62 %

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During the quarter ended March 31, 2021, we entered into definitive agreements to substantially exit our operating relationship with Genesis Healthcare ("Genesis").

The status of these transactions is as follows:

• In April 2021, we contributed nine Triple-net properties operated by Genesis into an 80 / 20 joint venture with ProMedica and such properties were added to the existing master lease with ProMedica.

Additionally, we have entered into definitive agreements to sell 35 Genesis properties for $ 496 million to a joint venture with Aurora Health Network and Peace Capital.

These property dispositions and the transfer of operations of these properties is expected to occur in the second and third quarters.

Additionally, we currently lease seven properties which we sublease to Genesis.

We have entered into an agreement to transition the operations of these properties into a new lease agreement with a regional operator.

To effectuate the transition of all 51 properties, we agreed to provide Genesis a lease termination fee of $ 86 million upon successful transition of all properties, which will be used to immediately repay indebtedness to Welltower.

• We have entered into definitive agreements to sell 35 Genesis properties for $ 496 million to a joint venture with Aurora Health Network and Peace Capital.

These properties are classified as held for sale as of June 30, 2021, with dispositions expected to occur in the second half of 2021.

As of June 30, 2021, we have transferred operations of 28 properties to new operators.

• Additionally, we currently lease seven properties which we previously subleased to Genesis.

We have entered into a forward sales agreement with Aurora Health Network that is intended to close simultaneously with the purchase option exercise in April 2023.

We have transitioned the operations of these properties into a new lease agreement with a regional operator during the quarter ended June 30, 2021.

• To effectuate the transition of all 51 properties, we agreed to provide Genesis a lease termination fee of $ 86 million upon successful transition of all properties, which will be used to immediately repay indebtedness to us.

The debt reduction associated with the lease termination fee was previously reserved for as an allowance for credit losses on loans receivable.

• Additionally, upon achievement of certain restructuring milestones, we will reduce Genesis' indebtedness by an additional $ 170 million in exchange for an equity interest in Genesis.

Upon conclusion of the aforementioned loan transactions, Genesis will have $ 167 million of indebtedness to Welltower, exclusive of additional PIK interest, which will carry a maturity date of January 1, 2024.

As of March 31, 2021, our total carrying value of Genesis loans receivable was $ 139,332,000 .

Upon conclusion of the aforementioned loan transactions, Genesis will have $ 167 million of indebtedness to us, exclusive of additional paid in kind interest, which will carry a maturity date of January 1, 2024.

As of June 30, 2021, our total carrying value of Genesis loans receivable, net of allowances for credit losses, w as $ 144,667,000 .

Borrowings Under Credit Facilities and Commercial Paper Program

At March 31, 2021, we had a primary unsecured credit facility with a consortium of 31 banks that includes a $ 3,000,000,000 unsecured revolving credit facility ( none outstanding at March 31, 2021), a $ 500,000,000 unsecured term credit facility and a $ 250,000,000 Canadian-denominated unsecured term credit facility.

At June 30, 2021, we had a primary unsecured credit facility with a consortium of 34 banks that includes a $ 4,000,000,000 unsecured revolving credit facility ( none outstanding at June 30, 2021), a $ 500,000,000 unsecured term credit facility and a $ 250,000,000 Canadian-denominated unsecured term credit facility.

The unsecured revolving credit facility is comprised of a $ 1,000,000,000 tranche that matures on June 4, 2023 and a $ 3,000,000,000 tranche that matures on June 4, 2025.

Both tranches may be extended for two successive terms of six month at our option.

The term credit facilities mature on July 19, 2023.

We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and the $ 500,000,000 unsecured term credit facility by up to an additional $ 1,250,000,000 , in the aggregate, and the $ 250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $ 250,000,000 .

The primary unsecured credit facility also allows us to borrow up to $ 1,000,000,000 in alternate currencies ( none outstanding at March 31, 2021).

The primary unsecured credit facility also allows us to borrow up to $ 1,000,000,000 in alternate currencies ( none outstanding at June 30, 2021).

Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate.

The applicable margin is based on our debt ratings and was 0.825 % at March 31, 2021.

The applicable margin is based on our debt ratings and was 0.775 % at June 30, 2021.

In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount.

The facility fee depends on our debt ratings and was 0.15 % at March 31, 2021.

The term credit facilities mature on July 19, 2023.

The revolving credit facility is scheduled to mature on July 19, 2022 and can be extended for two successive terms of six months each at our option.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The facility fee depends on our debt ratings and was 0.15 % at June 30, 2021.

In January 2019, we established an unsecured commercial paper program.

Under the terms of the program, we may issue unsecured commercial paper notes with maturities that vary, but do not exceed 397 days from the date of issue, up to a maximum aggregate face or principal amount outstanding at any time of $ 1,000,000,000 ( none outstanding at March 31, 2021).

The following information relates to aggregate borrowings under the unsecured revolving credit facility and commercial paper program for the periods presented (dollars in thousands):

Three Months Ended March 31,

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Balance outstanding at quarter end $ — $ — $ — $ —

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expense divided by average borrowings outstanding)

0.76 % 1.57 % 0.76 % 2.08 %

Senior Unsecured Notes and Secured Debt

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Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

At March 31, 2021, the annual principal payments due on these debt obligations were as follows (in thousands):

At June 30, 2021, the annual principal payments due on these debt obligations were as follows (in thousands):

Unsecured Notes (1,2)

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(3) Annual interest rates range from 0.03 % to 7.93 %.

Carrying value of the properties securing the debt totaled $ 5,330,000,000 at March 31, 2021.

(4) Includes a $ 860,000,000 unsecured term credit facility.

The loan matures on April 1, 2022 and bears interest at LIBOR plus 1.20 % ( 1.31 % at March 31, 2021).

Carrying value of the properties securing the debt totaled $ 5,312,000,000 at June 30, 2021.

(4) Includes a $ 250,000,000 Canadian-denominated unsecured term credit facility (approximately $ 201,525,000 based on the Canadian/U.S.

Dollar exchange rate on March 31, 2021).

The loan matures on July 19, 2023 and bears interest at the Canadian Dealer Offered Rate plus 0.9 % ( 1.31 % at March 31, 2021).

Dollar exchange rate on June 30, 2021).

The loan matures on July 19, 2023 and bears interest at the Canadian Dealer Offered Rate plus 0.90 % ( 1.31 % at June 30, 2021).

(5) Includes a $ 500,000,000 unsecured term credit facility.

The loan matures on July 19, 2023 and bears interest at LIBOR plus 0.9 % ( 1.01 % at March 31, 2021).

The loan matures on July 19, 2023 and bears interest at LIBOR plus 0.90 % ( 1.00 % at June 30, 2021).

(6) Includes a $ 300,000,000 Canadian-denominated 2.95 % senior unsecured notes due 2027 (approximately $ 241,830,000 based on the Canadian/U.S.

Dollar exchange rate on March 31, 2021).

Dollar exchange rate on June 30, 2021).

(7) Includes a £ 550,000,000 4.80 % senior unsecured notes due 2028 (approximately $ 759,330,000 based on the Sterling/U.S.

Dollar exchange rate in effect on March 31, 2021).

Dollar exchange rate in effect on June 30, 2021).

(8) Includes a £ 500,000,000 4.50 % senior unsecured notes due 2034 (approximately $ 690,300,000 based on the Sterling/U.S.

Dollar exchange rate in effect on March 31, 2021).

Dollar exchange rate in effect on June 30, 2021).

The following is a summary of our senior unsecured notes principal activity during the periods presented (dollars in thousands):

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

Weighted Avg.

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Debt issued 1,250,000 2.50 % 1,600,000 1.89 %

Debt extinguished ( 1,533,752 ) 2.42 % — — %

Foreign currency 27,204 3.57 % ( 114,851 ) 4.30 %

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The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):

Three Months Ended

March 31, 2021 March 31, 2020

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

June 30, 2021 June 30, 2020

Weighted Avg.

7 unchanged sentences

Ending balance $ 2,311,128 3.10 % $ 2,627,989 3.09 %

On March 25, 2021, we completed the issuance of $ 750,000,000 senior unsecured notes bearing interest at 2.80 % with a maturity date of June 2031.

On April 15, 2021 net proceeds were used to redeem $ 339,128,000 of our 3.75 % senior unsecured notes due March 2023 and $ 334,624,000 of our 3.95 % senior unsecured notes due September 2023.

We expect to recognize a loss on extinguishment of approximately $ 51 million in April in conjunction with the transaction.

Our debt agreements contain various covenants, restrictions and events of default.

Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions.

As of March 31, 2021, we were in compliance with all of the covenants under our debt agreements.

As of June 30, 2021, we were in compliance in all material respects with the covenants under our debt agreements.

Derivative Instruments

13 unchanged sentences

Approximately $ 2,562,000 of losses, which are included in OCI, are expected to be reclassified into earnings in the next 12 months.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Foreign Currency Forward Contracts and Cross Currency Swap Contracts Designated as Net Investment Hedges

2 unchanged sentences

Dollar of the instrument is recorded as a cumulative translation adjustment component of OCI.

During the six months ended June 30, 2021 and 2020, we settled certain net investment hedges necessitating cash payments of $ 7,196,000 and generating cash proceeds of $ 3,485,000 , respectively.

The balance of the cumulative translation adjustment will be reclassified to earnings if the hedged investment is sold or substantially liquidated.

Derivative Contracts Undesignated

3 unchanged sentences

Gains and losses resulting from the changes in fair values of these instruments are also recorded in interest expense.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Equity Warrants

We received equity warrants through our lending activities further described in Note 7, which were accounted for as loan origination fees.

The warrants provide us the right to participate in the capital appreciation of the underlying company above a designated price upon liquidation and contain net settlement terms qualifying as derivatives under ASC Topic 815.

The warrants are classified within receivables and other assets on our Consolidated Balance Sheets.

These warrants are measured at fair value with changes in fair value being recognized within gain (loss) on derivatives and financial instruments in our Consolidated Statements of Comprehensive Income.

The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Derivatives designated as net investment hedges:

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Forward sales contracts denominated in Canadian Dollars $ 80,000 $ 80,000

Forward purchase contracts denominated in Pound Sterling £ ( 32,157 ) £ —

(1) At March 31, 2021 the maximum maturity date was November 1, 2023.

(1) At June 30, 2021 the maximum maturity date was November 1, 2023.

The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Description Location 2021 2020 2021 2020

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Commitments and Contingencies

At March 31, 2021, we had 10 outstanding letter of credit obligations totaling $ 20,288,000 and expiring between 2021 and 2024.

At March 31, 2021, we had outstanding construction in progress of $ 542,302,000 and were committed to providing additional funds of approximately $ 715,955,000 to complete construction.

Additionally, at March 31, 2021, we had outstanding investments classified as in substance real estate of $ 365,488,000 and were committed to provide additional funds of $ 36,059,000 (see Note 8 for additional information).

Purchase obligations at March 31, 2021 also include $ 40,815,000 of contingent purchase obligations to fund capital improvements.

At June 30, 2021, we had 12 outstanding letter of credit obligations totaling $ 22,404,000 and expiring between 2021 and 2024.

At June 30, 2021, we had outstanding construction in progress of $ 458,844,000 and were committed to providing additional funds of approximately $ 819,168,000 to complete construction.

Additionally, at June 30, 2021, we had outstanding investments classified as in substance real estate of $ 270,164,000 and were committed to provide additional funds of $ 20,209,000 (see Note 8 for additional information).

Purchase obligations at June 30, 2021, include $ 1,576,800,000 representing a definitive agreement to acquire 86 seniors housing properties from Holiday Retirement, expected to close during the third quarter.

Purchase obligations also include $ 58,673,000 of contingent purchase obligations to fund capital improvements.

Rents due from the tenant are increased to reflect the additional investment in the property.

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The following is a summary of our stockholders’ equity capital accounts as of the dates indicated:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Preferred Stock:

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Outstanding shares 422,561,863 417,400,602

Common Stock In February 2019, we entered into an amended and restated equity distribution agreement whereby we can offer and sell up to $ 1,500,000,000 aggregate amount of our common stock ("Equity Shelf Program").

The Equity Shelf Program also allows us to enter into forward sale agreements.

As of March 31, 2021 , we had $ 499,341,000 of r emaining capacity under the Equity Shelf Program, which excludes forward sales agreements outstanding for the sale of 2,214,760 shares with maturity dates in 2022.

We expect to physically settle the forward sales for cash proceeds.

Common Stock In May 2021, we entered into an amended and restated equity distribution agreement whereby we can offer and sell up to $ 2,000,000,000 a ggregate amount of our common stock ("ATM Program").

The ATM Program also allows us to enter into forward sale agreement s.

As of June 30, 2021, we had $ 1,905,854,000 of remaining capacity under the ATM Program, which excludes forward sales agreements outstanding for the sale of 13,052,375 shares with maturity dates in 2022 which we expect to physically settle for cash proceeds of $ 1,036,503,000 .

On May 1, 2020, our Board of Directors authorized a share repurchase program whereby we may repurchase up to $ 1 billion of common stock through December 31, 2021 (the "Repurchase Program").

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We expect to finance any share repurchases under the Repurchase Program using available cash and may use proceeds from borrowings or debt offerings.

We did not repurchase any shares of our common stock during the three months ended March 31, 2021.

The following is a summary of our common stock issuances during the three months ended March 31, 2021 and 2020 (dollars in thousands, except shares and average price amounts):

We did not repurchase any shares of our common stock during the six months ended June 30, 2021.

The following is a summary of our common stock issuances during the six months ended June 30, 2021 and 2020 (dollars in thousands, except shares and average price amounts):

Shares Issued Average Price Gross Proceeds Net Proceeds

2020 Dividend reinvestment plan issuances 264,153 $ 72.33 $ 19,105 $ 19,105

2020 Equity shelf program issuances 6,799,978 86.48 588,072 576,196

2020 Option exercises 251 47.81 12 12

2020 ATM Program issuances 6,799,978 86.48 588,072 576,196

2020 Stock incentive plans, net of forfeitures 183,398 — —

2020 Totals 7,247,780 $ 607,189 $ 595,313

2021 ATM Program issuances 5,015,673 74.15 371,937 366,464

2021 Stock incentive plans, net of forfeitures 145,588 — —

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The following is a summary of our dividend payments (in thousands, except per share amounts):

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

Per Share Amount Per Share Amount

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Accumulated Other Comprehensive Income The following is a summary of accumulated other comprehensive income (loss) for the periods presented (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Foreign currency translation $ ( 571,391 ) $ ( 621,792 )

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The 2016 Plan allows for the issuance of, among other things, stock options, stock appreciation rights, restricted stock, deferred stock units, performance units and dividend equivalent rights.

Vesting periods for options, deferred stock units and restricted shares generally range from three to five years .

Vesting periods for options, deferred stock units and restricted shares generally range from three to four years .

Options expire ten years from the date of grant.

Stock-based compensation expense totaled $ 5,576,000 and $ 7,083,000 for the three months ended March 31, 2021 and 2020, respectfully.

Stock-based compensation expense totaled $ 4,757,000 and $ 10,333,000 for the three and six months ended June 30, 2021 , respectfully, and $ 7,290,000 and $ 14,373,000 for the same periods in 2020.

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Numerator for basic earnings per share - net income (loss) attributable to common stockholders

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Non-vested restricted shares

438 619 430 661

Redeemable OP units

1,396 1,396 1,396 1,396

Employee stock purchase program

4 unchanged sentences

Diluted earnings per share $ 0.06 $ 0.42 $ 0.23 $ 1.17

As of March 31, 2021, forward sales agreements outstanding for the sale of 2,214,760 s hares of common stock were not included in the computation of diluted earnings per share because such forward sales were anti-dilutive for the period.

As of June 30, 2021, forward sales agreements outstanding f or the sale of 13,052,375 s hares of common stock were not included in the computation of diluted earnings per share because such forward sales were anti-dilutive to the three and six month periods ended June 30, 2021.

Disclosure about Fair Value of Financial Instruments

8 unchanged sentences

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

Mortgage Loans, Other Real Estate Loans and Non-real Estate Loans Receivable — The fair value of mortgage loans, other real estate loans and non-real estate loans receivable is generally estimated by using Level 2 and Level 3 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Cash and Cash Equivalents and Restricted Cash — The carrying amount approximates fair value.

Equity Securities — Equity securities are recorded at their fair value based on Level 1 publicly available trading prices.

Equity Warrants — The fair value of equity warrants is estimated using Level 3 inputs and includes data points such as net equity of the underlying HC-One Group real estate portfolio, marketability discount for private company warrants, dividend yield, volatility and risk-free rate.

Borrowings Under Primary Unsecured Credit Facility and Commercial Paper Program — The carrying amount of the primary unsecured credit facility and commercial paper program approximates fair value because the borrowings are interest rate adjustable.

3 unchanged sentences

The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.

Foreign Currency Forward Contracts, Interest Rate Swaps and Cross Currency Swaps — Foreign currency forward contracts, interest rate swaps and cross currency swaps are recorded in other assets or other liabilities on the balance sheet at fair value that is derived from observable market data, including yield curves and foreign exchange rates (all of our derivatives are Level 2).

Redeemable OP Unitholder Interests — Our redeemable OP unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs unless the fair value is below the initial amount in which case the redeemable OP unitholder interests are recorded at the initial amount adjusted for distributions to the unitholders and income or loss attributable to the unitholders.

1 unchanged sentence

The carrying amounts and estimated fair values of our financial instruments are as follows (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Carrying Amount Fair Value Carrying Amount Fair Value

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Foreign currency forward contracts, interest rate swaps and cross currency swaps 6,256 6,256 4,668 4,668

Equity warrants 32,419 32,419 — —

Financial liabilities:

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The following summarizes items measured at fair value on a recurring basis (in thousands):

Fair Value Measurements as of March 31, 2021

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements as of June 30, 2021

Total Level 1 Level 2 Level 3

Equity securities $ 3,061 $ 3,061 $ — $ —

Equity warrants 32,419 — — 32,419

Foreign currency forward contracts, interest rate swaps and cross currency swaps, net asset (liability) (1)

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(1) Please see Note 12 for additional information.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Items Measured at Fair Value on a Nonrecurring Basis

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Summary information for the reportable segments (which excludes unconsolidated entities) is as follows (in thousands):

Three Months Ended March 31, 2021:

Three Months Ended June 30, 2021:

Seniors Housing Operating Triple-net Outpatient Medical Non-segment / Corporate Total

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Total assets $ 16,129,367 $ 9,490,724 $ 6,212,491 $ 343,534 $ 32,176,116

Three Months Ended March 31, 2020:

Three Months Ended June 30, 2020:

Seniors Housing Operating Triple-net Outpatient Medical Non-segment / Corporate Total

10 unchanged sentences

Loss (gain) on derivatives and financial instruments, net — 1,434 — — 1,434

Loss (gain) on extinguishment of debt, net ( 492 ) — 741 — 249

Provision for loan losses — 1,451 ( 29 ) — 1,422

10 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2021 Seniors Housing Operating Triple-net Outpatient Medical Non-segment / Corporate Total

Resident fees and services $ 1,464,355 $ — $ — $ — $ 1,464,355

Rental income — 357,188 300,378 — 657,566

Interest income 1,975 47,783 8,269 — 58,027

Other income 2,621 2,452 6,648 1,385 13,106

Total revenues 1,468,951 407,423 315,295 1,385 2,193,054

Property operating expenses 1,138,329 25,468 92,358 3,828 1,259,983

Consolidated net operating income 330,622 381,955 222,937 ( 2,443 ) 933,071

Depreciation and amortization 263,621 111,073 110,617 — 485,311

Interest expense 21,971 3,586 7,922 212,004 245,483

General and administrative expenses — — — 61,362 61,362

Loss (gain) on derivatives and financial instruments, net — 1,575 — — 1,575

Loss (gain) on extinguishment of debt, net ( 1,537 ) — — 52,506 50,969

Provision for loan losses 70 10,872 ( 3,362 ) — 7,580

Impairment of assets 22,317 22,732 2,211 — 47,260

Other expenses 7,168 9,093 1,810 4,610 22,681

Income (loss) from continuing operations before income taxes and other items 17,012 223,024 103,739 ( 332,925 ) 10,850

Income tax (expense) benefit — — — ( 1,722 ) ( 1,722 )

Income (loss) from unconsolidated entities ( 7,704 ) 9,784 2,993 — 5,073

Gain (loss) on real estate dispositions, net 5,167 44,751 53,830 — 103,748

Income (loss) from continuing operations 14,475 277,559 160,562 ( 334,647 ) 117,949

Net income (loss) $ 14,475 $ 277,559 $ 160,562 $ ( 334,647 ) $ 117,949

Six Months Ended June 30, 2020 Seniors Housing Operating Triple-net Outpatient Medical Non-segment / Corporate Total

Resident fees and services $ 1,619,532 $ — $ — $ — $ 1,619,532

Rental income — 408,877 377,388 — 786,265

Interest income 192 30,191 927 — 31,310

Other income 5,054 2,280 1,845 791 9,970

Total revenues 1,624,778 441,348 380,160 791 2,447,077

Property operating expenses 1,203,384 26,865 112,296 — 1,342,545

Consolidated net operating income 421,394 414,483 267,864 791 1,104,532

Depreciation and amortization 285,937 115,832 138,403 — 540,172

Interest expense 30,463 5,598 9,134 223,169 268,364

General and administrative expenses — — — 69,543 69,543

Loss (gain) on derivatives and financial

instruments, net — 9,085 — — 9,085

Loss (gain) on extinguishment of debt, net ( 492 ) — 741 — 249

Provision for loan losses — 18.69 8,523 — ( 29 ) 18.69 — 8,494

Impairment of assets 78,646 24,332 — — 102,978

Other expenses 8,240 4,013 7,463 5,987 25,703

Income (loss) from continuing operations before income taxes and other items 18,600 247,100 112,152 ( 297,908 ) 79,944

Income tax (expense) benefit — — — ( 7,675 ) ( 7,675 )

Income (loss) from unconsolidated entities ( 17,811 ) 12,199 3,252 — ( 2,360 )

Gain (loss) on real estate dispositions, net 14,316 51,785 352,586 — 418,687

Income (loss) from continuing operations 15,105 311,084 467,990 ( 305,583 ) 488,596

Net income (loss) $ 15,105 $ 311,084 $ 467,990 $ ( 305,583 ) $ 488,596

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada.

1 unchanged sentence

The following is a summary of geographic information for the periods presented (dollars in thousands):

Three Months Ended

March 31, 2021 March 31, 2020

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

% Amount % Amount (1)

United States $ 893,672 78.4 % $ 973,772 81.9 % $ 1,719,320 78.4 % $ 2,001,553 81.8 %

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Total $ 1,140,992 100.0 % $ 1,188,475 100.0 % $ 2,193,054 100.0 % $ 2,447,077 100.0 %

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Amount % Amount %

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Total $ 32,176,116 100.0 % $ 32,483,642 100.0 %

(1) The United States, United Kingdom and Canada represent 72 %, 14 % and 14 %, respectively, of our resident fees and services revenue stream for the three months ended March 31, 2021.

(1) The United States, United Kingdom and Canada represent 73 %, 13 % and 14 % of our resident fees and services revenue for the three and six month periods ended June 30, 2021, respectively.

Income Taxes and Distributions

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income based or withholding taxes on certain investments located in jurisdictions outside the U.S.

The provision for income taxes for the three months ended March 31, 2021 and 2020, was primarily due to operating income or losses, offset by certain discrete items at our TRS entities.

The provision for income taxes for the six months ended June 30, 2021 and 2020, was primarily due to operating income or losses, offset by certain discrete items at our TRS entities.

In 2014, we established certain wholly-owned direct and indirect subsidiaries in Luxembourg and Jersey and transferred interests in certain foreign investments into this holding company structure.

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Generally, given current statutes of limitations, we are subject to audit by the foreign, federal, state and local taxing authorities under applicable local laws.

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The CARES Act, among its economic stimulus provisions, includes a number of tax provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carrybacks, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

Certain of these provisions may impact the provision for taxes in our consolidated financial statements, including in particular the provision allowing for the carryback of net operating losses which would be applicable to our TRSs.

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Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs in the aggregate (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Net real estate investments $ 449,437 $ 454,333

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Welltower™, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States (U.S.), Canada and the United Kingdom (U.K.), consisting of seniors housing and post-acute communities and outpatient medical properties.

The following table summarizes our consolidated portfolio for the three months ended March 31, 2021 (dollars in thousands):

The following table summarizes our consolidated portfolio for the three months ended June 30, 2021 (dollars in thousands):

Percentage of Number of

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The COVID-19 pandemic has had and may continue to have material and adverse effects on our financial condition, results of operations and cash flows in the future.

The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the effectiveness of vaccines, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others.

The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the effectiveness of vaccines, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, the overall pace of recovery, among others.

Our Seniors Housing Operating revenues are dependent on occupancy.

Spot occupancy has continued to decline since the beginning of the pandemic, dropping to 73.6 % as of March 31, 2021 compared to 75.9 % as of December 31, 2020.

Additionally, r apid distribution and a high acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S.

has resulted in a significant decrease in total resident case counts since mid-January 2021 across the portfolio.

Spot occupancy has declined since the beginning of the pandemic, reaching a low of 72.3% on March 12, 2021.

Virtually all communities are now accepting new residents, resulting in an increase in move-in activity and occupancy rates of 230 basis points since the low point to 74.6% as of June 30, 2021.

Additionally, rapid distribution and a high acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S.

has resulted in a significant decrease in total resident case counts across the portfolio.

We have incurred increased operational costs as a result of the introduction of public health measures and other regulations affecting our properties, as well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor, personal protective equipment and sanitation.

We expect total Seniors Housing Operating expenses to remain elevated during the pandemic and potentially beyond as these additional health and safety measures become standard practice.

Our Triple-net operators are experiencing similar occupancy declines and operating costs as described above with respect to our Seniors Housing Operating properties.

Our Triple-net operators are experiencing similar trends related to occupancy and operating costs as described above with respect to our Seniors Housing Operating properties.

However, long-term/post-acute care facilities are generally experiencing a higher degree of occupancy declines.

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Management's Discussion and Analysis of Financial Condition and Results of Operations

During the early stages of the pandemic in 2020, our Outpatient Medical tenants experienced temporary medical practice closures or decreases in revenue due to government-imposed restrictions on elective medical procedures, stay at home orders or decisions by patients to delay treatments.

These factors caused operators or tenants, in certain circumstances, to seek modifications of rent obligations.

We evaluated each request on a case-by-case basis to determine if a form of rent relief was warranted following an examination of the tenant’s financial health, rent coverage, current operating situation and other factors.

Virtually all deferred rent has been repaid as of March 31, 2021.

During the first quarter, we collected approximately 96% of rent due from operators under Triple-net lease agreements (primarily seniors housing and post-acute care facilities).

No significant rent deferrals or rent concessions have been made.

In the Outpatient Medical segment we collected 99% of rent due in the first quarter, with uncollected amounts primarily attributable to local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants.

During the six months ended June 30, 2021, we collected approximately 95% of rent due from operators under Triple-net lease agreements (primarily seniors housing and post-acute care facilities).

No significant rent deferrals or rent concessions have been made during the six months ended June 30, 2021.

We evaluate leases individually and recognize rent on a cash basis if collectibility of substantially all contractual rent payments is not probable.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Business Strategy

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In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

For the three months ended March 31, 2021, resident fees and services and rental income represented 69% and 29%, respectively, of total revenues.

For the six months ended June 30, 2021, resident fees and services and rental income represented 67% and 30%, respectively, of total revenues.

Substantially all of our operating leases are designed with escalating rent structures.

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Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.

Management's Discussion and Analysis of Financial Condition and Results of Operations

We also continuously evaluate opportunities to finance future investments.

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To the extent that new investment requirements exceed our avai lable cash on-hand, we expect to borrow under our unsecured revolving credit facility and commercial paper program.

At March 31, 2021, we had $2,131,846,000 of cash and cash equivalents, $426,976,000 of restricted cash and $3,000,000,000 of available borrowing capacity under our unsecured revolving credit facility.

At June 30, 2021, we had $513,602,000 of cash and cash equivalents, $295,102,000 of restricted cash and $4,000,000,000 of available borrowin g capacity under our unsecured revolving credit facility.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Key Transactions

Capital The following summarizes key capital transaction that occurred during the three months ended March 31, 2021 and subsequent events:

• During the three months ended March 31, 2021, we extinguished $41,933,000 of secured debt at a blended average interest rate of 7.60%.

• During the three months ended March 31, 2021, we sold 2,214,760 shares of common stock under our ATM program via forward sale agreements, generating future expected gross proceeds of approximately $160,375,000.

• On March 25, 2021, we completed the issuance of $750,000,000 senior unsecured notes bearing interest at 2.80% with a maturity date of June 2031.

On April 15, 2021, net proceeds were used to redeem $339,128,000 of our 3.75% senior unsecured notes due March 2023 and $334,624,000 of our 3.95% senior unsecured notes due September 2023.

We expect to recognize a loss on extinguishment of approximately $51 million in April in conjunction with the transaction.

Investments The following summarizes our property acquisitions and joint venture investments completed during the three months ended March 31, 2021 (dollars in thousands):

Properties Investment Amount (1)

Capital The following summarizes key capital transactions that occurred during the six months ended June 30, 2021 and subsequent events:

• In March 2021, we completed the issuance of $750,000,000 senior unsecured notes bearing interest at 2.80% with a maturity date of June 2031.

• In April 2021, we repaid our $339,128,000 of our 3.75% senior unsecured notes due March 2023, $334,624,000 of our 3.95% senior unsecured notes due September 2023, and $15,000,000 of our term loan due April 2022.

• In May 2021, we entered into an amended and restated ATM Program (as defined below) pursuant to which we may offer and sell up to $2,000,000,000 of common stock from time to time.

Since the beginning of the year, we sold 22,311,042 shares of common stock under our current and previous ATM Programs via forward sale agreements which are expected to generate gross proceeds of approximately $1,761,767,000, of which 5,015,673 shares have been settled resulting in $371,937,000 of gross proceeds during the six months ended June 30, 2021.

• In June 2021, we closed on a new $4,700,000,000 unsecured credit facility with improved pricing across our line of credit and terminated the existing unsecured credit facility.

The credit facility includes $4,000,000,000 of revolving credit capacity at a borrowing rate of 77.5 basis points over LIBOR, $500,000,000 of USD term loan capacity at a borrowing rate of 90.0 basis points over LIBOR and $250,000,000 CAD term loan capacity at 90.0 basis points over CDOR.

• In June 2021, we repaid the remaining $845,000,000 of our term loan due April 2022.

• In June 2021, we completed the issuance of $500,000,000 senior unsecured notes bearing interest at 2.05% with a maturity date of January 2029.

• During the six months ended June 30, 2021, we extinguished $66,593,000 of secured debt at a blended average interest rate of 6.01%.

Investments The following summarizes our property acquisitions and joint venture investments completed during the six months ended June 30, 2021 (dollars in thousands):

Properties Book Amount (1)

Capitalization Rates (2)

Book Amount (3)

Seniors Housing Operating 27 $ 204,106 0.8 %

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Totals 44 $ 691,911 4.5 %

(1) Represents stated pro rata purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S.

(2) Represents annualized contractual or projected net operating income to be received in cash divided by investment amounts.

(1) Represents amounts recorded in net real estate investments including fair value adjustments pursuant to U.S.

See Note 3 to our unaudited consolidated financial statements for additional information.

Dispositions The following summarizes property dispositions completed during the three months ended March 31, 2021 (dollars in thousands):

(2) Represents annualized contractual or projected net operating income to be received in cash divided by investment amounts.

Dispositions The following summarizes property dispositions completed during the six months ended June 30, 2021 (dollars in thousands):

Properties Proceeds (1)

Capitalization Rates (2)

Book Amount (2)

Capitalization Rates (3)

Seniors Housing Operating 12 $ 118,590 $ 112,809 4.6 %

Triple-net 11 133,704 88,367 7.2 %

Outpatient Medical 10 194,386 137,890 5.2 %

Totals 33 $ 446,680 $ 339,066 5.7 %

(1) Represents pro rata proceeds received upon disposition including any seller financing.

(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.

(1) Represents net proceeds received upon disposition, including any seller financing.

(2) Represents carrying value of net real estate assets at time of disposition.

See Note 5 to our unaudited consolidated financial statements for additional information.

Dividends Our Board of Directors declared a cash dividend for the quarter ended March 31, 2021 of $0.61 per share.

On May 20, 2021, we will pay our 200 th consecutive quarterly cash dividend to stockholders of record on May 11, 2021.

(3) Represents annualized contractual income that was being received in cash at date of disposition divided by stated purchase price.

Dividends Our Board of Directors declared a cash dividend for the quarter ended June 30, 2021 of $0.61 per share.

On August 19, 2021, we will pay our 201 st consecutive quarterly cash dividend to stockholders of record on August 12, 2021.

Management's Discussion and Analysis of Financial Condition and Results of Operations

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Three Months Ended

March 31, December 31, September 30, June 30, March 31,

June 30, March 31, December 31, September 30, June 30, March 31,

2021 2021 2020 2020 2020 2020

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Three Months Ended

March 31, December 31, September 30, June 30, March 31,

June 30, March 31, December 31, September 30, June 30, March 31,

2021 2021 2020 2020 2020 2020

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Net debt to market capitalization ratio 26% 28% 30% 33% 36% 40%

Interest coverage ratio 3.56x 4.20x 6.23x 4.29x 5.42x

Fixed charge coverage ratio 3.16x 3.72x 5.52x 3.84x 4.88x

Interest coverage ratio 3.30x 3.56x 4.20x 6.23x 4.29x 5.42x

Fixed charge coverage ratio 2.93x 3.16x 3.72x 5.52x 3.84x 4.88x

Concentration Risk We evaluate our concentration risk in terms of NOI by property mix, relationship mix and geographic mix.

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Three Months Ended

March 31, December 31, September 30, June 30, March 31,

June 30, March 31, December 31, September 30, June 30, March 31,

2021 2021 2020 2020 2020 2020

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Relationship mix:

Sunrise Senior Living (2)

14% 12% 15% 10% 14%

ProMedica 12% 12% 11% 13% 10% 9%

Genesis Healthcare (3)

Sunrise Senior Living (2)

10% 14% 12% 15% 10% 14%

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Avery Healthcare 4% 5% 4% 5% 3% 3%

Genesis Healthcare (3)

2% 6% 6% (16)% 6% 5%

Remaining relationships 67% 58% 63% 77% 66% 63%

Geographic mix:

California 15% 12% 17% 14% 15%

United Kingdom 13% 10% 11% 12% 8% 9%

New Jersey (3)

7% 7% (5)% 7% 8%

California 12% 15% 12% 17% 14% 15%

Texas 9% 7% 10% 12% 10% 7%

Canada 7% 7% 5% 8% 6% 7%

Pennsylvania 5% 6% 6% 4% 6% 6%

Remaining geographic areas 54% 55% 56% 47% 56% 56%

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(3) During the three months ended September 30, 2020, we reserved for straight-line rent receivable balances of $91,025,000 relating to Genesis Healthcare.

Lease Expirations The following table sets forth information regarding lease expirations for certain portions of our portfolio as of March 31, 2021 (dollars in thousands):

Lease Expirations The following table sets forth information regarding lease expirations for certain portions of our portfolio as of June 30, 2021 (dollars in thousands):

Expiration Year (1)

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The following is a summary of our sources and uses of cash flows for the periods presented (dollars in thousands):

Three Months Ended Change

March 31, 2021 March 31, 2020 $ %

Six Months Ended Change

June 30, 2021 June 30, 2020 $ %

Cash, cash equivalents and restricted cash at beginning of period $ 2,021,043 $ 385,766 $ 1,635,277 424 %

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Cash, cash equivalents and restricted cash at end of period $ 808,704 $ 1,826,243 $ (1,017,539) (56) %

Operating Activities The changes in net cash provided from operating activities are primarily attributable to declines in revenue as a result of decreased occupancy at our Seniors Housing Operating properties, straight-line receivable reserves related to Triple-net leases during the three months ended March 31, 2021 and dispositions.

Please see “Results of Operations” for discussion of net income fluctuations.

For the three months ended March 31, 2021 and 2020 , cash flows provided from operations exceeded cash distributions to stockholders.

For the six months ended June 30, 2021 and 2020 , cash flows provided from operations exceeded cash distributions to stockholders.

Investing Activities The changes in net cash provided from/used in investing activities are primarily attributable to net changes in real property investments and dispositions, loans receivable and investments in unconsolidated entities, which are summarized above in “Key Transactions” and Notes 3 and 5 of our unaudited consolidated financial statements.

The following is a summary of cash used in non-acquisition capital improvement activities for the periods presented (dollars in thousands):

Three Months Ended Change

March 31, 2021 March 31, 2020 $

Six Months Ended Change

June 30, 2021 June 30, 2020 $

New development $ 144,344 $ 93,031 $ 51,313

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Management's Discussion and Analysis of Financial Condition and Results of Operations

On March 25, 2021, we completed the issuance of $750,000,000 senior unsecured notes with a maturity date of June 2031.

On April 15, 2021, net proceeds were used to redeem the remaining $339,128,000 of our 3.75% senior unsecured notes due 2023 and $334,624,000 of our 3.95% senior unsecured notes due 2023.

As of March 31, 2021, we have total near-term available liquidity of approximately $5.1 billion.

In March 2021, we completed the issuance of $750,000,000 senior unsecured notes with a maturity date of June 2031.

In June 2021, we completed the issuance of $500,000,000 senior unsecured notes with a maturity date of January 2029.

Net proceeds from these debt issuances were used to redeem the remaining $339,128,000 of our 3.75% senior unsecured notes due 2023, $334,624,000 of our 3.95% senior unsecured notes due 2023, and $860,000,000 remaining on our term loan due April 2022.

In June 2021, we closed on a new $4,700,000,000 unsecured credit facility.

The credit facility includes $4,000,000,000 of revolving credit capacity.

As of June 30, 2021, we have total near-term available liquidity of approximately $4.5 billion.

However, we are unable to accurately predict the full impact that the pandemic will have on our results from operations, financial condition, liquidity and cash flows due to numerous factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2020, including factors identified under the heading “Risk Factors".

Off-Balance Sheet Arrangements

At March 31, 2021, we had investments in unconsolidated entities with our ownership generally ranging from 10% to 65%.

At June 30, 2021, we had investments in unconsolidated entities with our ownership generally ranging from 10% to 65%.

We use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure.

At March 31, 2021, we had 10 outstanding letter of credit obligations.

At June 30, 2021, we had 12 outstanding letter of credit obligations.

Please see Notes 8, 12 and 13 to our unaudited consolidated financial statements for additional information.

Contractual Obligations

The following table summarizes our payment requirements under contractual obligations as of March 31, 2021 (in thousands):

The following table summarizes our payment requirements under contractual obligations as of June 30, 2021 (in thousands):

Payments Due by Period

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(5) See Note 13 to our unaudited consolidated financial statements for additional information.

(6) Purchase obligations at June 30, 2021, include $1,576,800,000 representing a definitive agreement to acquire 86 seniors housing properties from Holiday Retirement, expected to close during the third quarter.

Capital Structure

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Certain agreements require us to maintain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions.

As of March 31, 2021, we were in compliance with all covenants under our primary unsecured credit facilities and senior note agreements.

As of June 30, 2021, we were in compliance in all material respects with the covenants under our debt agreements.

None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings.

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Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

Management's Discussion and Analysis of Financial Condition and Results of Operations

On May 17, 2018, we filed with the Securities and Exchange Commission (1) an open-ended automatic or “universal” shelf registration statement covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units and (2) a registration statement in connection with our enhanced dividend reinvestment plan (“DRIP”) under which we may issue up to 15,000,000 shares of common stock.

As o f April 23, 2021, 2,541,750 shares of common stock remained available for issuance under the DRIP registration statement.

On February 25, 2019, we entered into separate amended and restated equity distribution agreements with each of Barclays Capital Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co.

Morgan Securities LLC, KeyBanc Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.

LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC relating to the offer and sale from time to time of up to $1,500,000,000 aggregate amount of our common stock (“Equity Shelf Program”).

The Equity Shelf Program also allows us to enter into forward sale agreements.

As of April 23, 2021, we had $499,341,000 of remaining capacity under the Equity Shelf Program, which excludes forward sales agreements outstanding for the sale of 3,704,787 s hares or approximately $ 272,059,000 with maturity dates in 2022.

We expect to physically settle the forward sales for cash proceeds.

Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our unsecured revolving credit facility and commercial paper program.

Results of Operations

Our primary sources of revenue include resident fees and services, rent and interest income.

Our primary expenses include property operating expenses, depreciation and amortization, interest expense, general and administrative expenses and other expenses.

We evaluate our business and make resource allocations on our three business segments:

Seniors Housing Operating, Triple-net and Outpatient Medical.

The primary performance measures for our properties are NOI and same store NOI ("SSNOI"), and other supplemental measures include FFO and EBITDA, which are further discussed below.

Please see Non-GAAP Financial Measures for additional information and reconciliations.

The following is a summary of our results of operations (dollars in thousands, except per share amounts):

Three Months Ended Change

March 31, March 31,

2021 2020 Amount %

Net income $ 72,192 $ 329,380 $ (257,188) (78) %

NICS 71,546 310,284 (238,738) (77) %

FFO 287,167 356,124 (68,957) (19) %

EBITDA 443,703 751,630 (307,927) (41) %

NOI 434,736 576,821 (142,085) (25) %

SSNOI 395,076 461,491 (66,415) (14) %

Per share data (fully diluted):

NICS $ 0.17 $ 0.75 $ (0.58) (77) %

FFO $ 0.69 $ 0.86 $ (0.17) (20) %

Interest coverage ratio 3.56 x 5.42 x (1.86) x (34) %

Fixed charge coverage ratio 3.16 x 4.88 x (1.72) x (35) %

Seniors Housing Operating

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

Three Months Ended Change

March 31, 2021 March 31, 2020 $ %

$ 156,791 $ 219,756 $ (62,965) (28.7) %

(1) For the three months ended March 31, 2021 and 2020, amounts relate t o 526 same store properties, respectively.

Please see Non-GAAP Financial Measures for additional information and reconciliations.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations

Three Months Ended Change

March 31, March 31,

2021 2020 $ %

Resident fees and services

$ 723,464 $ 849,972 $ (126,508) (15) %

Interest income

1,119 104 1,015 976 %

1,819 1,052 767 73 %

Total revenues

726,402 851,128 (124,726) (15) %

Property operating expenses 555,968 607,871 (51,903) (9) %

170,434 243,257 (72,823) (30) %

Other expenses:

Depreciation and amortization

132,586 146,774 (14,188) (10) %

Interest expense

11,418 16,434 (5,016) (31) %

Loss (gain) on extinguishment of debt, net

(4,643) — (4,643) n/a

Provision for loan losses 251 — 251 n/a

Impairment of assets

4,604 3,495 1,109 32 %

Other expenses

3,459 2,989 470 16 %

147,675 169,692 (22,017) (13) %

Income (loss) from continuing operations before income taxes and other items 22,759 73,565 (50,806) (69) %

Income (loss) from unconsolidated entities 5,234 (11,024) 16,258 147 %

Gain (loss) on real estate dispositions, net 5,195 (149) 5,344 n/a

Income from continuing operations 33,188 62,392 (29,204) (47) %

Net income (loss) 33,188 62,392 (29,204) (47) %

Net income (loss) attributable to noncontrolling interests (4,924) (1,932) (2,992) n/a

Net income (loss) attributable to common stockholders $ 38,112 $ 64,324 $ (26,212) (41) %

(1) See Non-GAAP Financial Measures below.

Decreases in resident fees and services and property operating expenses are primarily a result of decreases in occupancy across the portfolio due to the COVID-19 pandemic and property dispositions.

Spot occupancy has continued to decline since the beginning of the pandemic, dropping to 73.6% as of March 31, 2021 compared to 75.9% as of December 31, 2020.

Spot occupancy rates from the start of the pandemic through March 31, 2021 are as follows:

February 2020 December 2020 January 2021 February 2021 March 2021

Spot occupancy (1)

85.4 % 75.9 % 74.4 % 73.6 % 73.6 %

Sequential occupancy change (1.5) % (0.8) % — %

and Canada, resulted in a benefit of approximately $21,204,000 for the three months ended March 31, 2021 as compared to an expense of $7,294,000 during the three months ended March 31, 2020.

These costs included higher labor expenses, coupled with expenditures related to procurement of personal protective equipment and other supplies, net of any reimbursements.

In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund related to our Seniors Housing Operating portfolio.

During the first quarter, we received Provider Relief Funds of approximately $35,682,000, which was recognized as a reduction to COVID-19 costs within property operating expenses.

The fluctuations in depreciation and amortization are due to acquisitions, dispositions and transitions.

To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly.

During the three months ended March 31, 2021 and 2020, we recorded impairment charges of $4,604,000 and $3,495,000, respectively, related to held for use properties in which the carrying values exceed the estimated fair value.

Transaction costs related to asset acquisitions are capitalized as a component of the purchase price.

Changes in the gain on sales of properties are related to the volume and timing of property sales and the sales prices.

During the three months ended March 31, 2021, we recognized a gain on real estate disposition of $5,195,000 related to four properties.

The fluctuation in other expenses is primarily due to the timing of noncapitalizable transaction costs associated with acquisitions and operator transitions.

Management's Discussion and Analysis of Financial Condition and Results of Operations

During the three months ended March 31, 2021, there were no Seniors Housing Operating construction projects completed.

The following is a summary of our Seniors Housing Operating construction projects, excluding expansions, pending as of March 31, 2021 (dollars in thousands):

Location Units Commitment Balance Est.

Potomac, MD 120 $ 56,720 $ 55,657 2Q21

Beckenham, UK 100 64,970 50,660 4Q21

Barnet, UK 100 71,453 45,194 4Q21

Hendon, UK 102 76,557 54,698 4Q21

Georgetown, TX 188 36,215 5,308 4Q21

Princeton, NJ 80 29,780 18,559 3Q22

Berea, OH 120 14,934 2,344 4Q22

Painesville, OH 119 14,462 1,857 4Q22

Beaver, PA 116 14,184 2,390 4Q22

1,045 $ 379,275 236,667

Toronto, ON Project in planning stage 47,970

Brookline, MA Project in planning stage 24,632

Washington, DC Project in planning stage 24,467

Columbus, OH Project in planning stage 11,634

Brookhaven, GA Project in planning stage 6,804

Raleigh, NC Project in planning stage 3,407

Interest expense represents secured debt interest expense which fluctuates based on the net effect and timing of assumptions, segment transitions, fluctuations in foreign currency rates, extinguishments and principal amortizations.

The fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of extinguishments and terms of the related secured debt.

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

Three Months Ended

March 31, 2021 March 31, 2020

Amount Interest Rate Amount Interest Rate

Beginning balance $ 1,706,189 3.05 % $ 2,115,037 3.54 %

Debt issued — — % 44,921 2.58 %

Debt extinguished (41,933) 7.60 % (16,040) 4.51 %

Principal payments (12,261) 3.26 % (12,174) 3.49 %

Foreign currency 15,283 2.81 % (86,818) 3.25 %

Ending balance $ 1,667,278 2.89 % $ 2,044,926 3.56 %

Monthly averages $ 1,688,213 2.99 % $ 2,080,448 3.54 %

The majority of our Seniors Housing Operating properties are formed through partnership interests.

Income from unconsolidated entities recognized during the three months ended March 31, 2021 is primarily due to a gain on sale recognized from the sale of a home health business owned by one of our unconsolidated entities, offset by losses from unconsolidated entities largely attributable to depreciation and amortization of short-lived intangible assets related to certain investments in unconsolidated joint ventures.

Net income attributable to noncontrolling interests represents our partners’ share of net income (loss) related to joint ventures.

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

Three Months Ended Change

March 31, 2021 March 31, 2020 $ %

$ 141,089 $ 147,527 $ (6,438) (4.4) %

(1) For the three months ended March 31, 2021 and 2020, amounts relate to 553 same store properties, respectively.

Please see Non-GAAP Financial Measures for additional information and reconciliations.

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

Three Months Ended Change

March 31, March 31,

2021 2020 $ %

Rental income

$ 152,463 $ 191,385 $ (38,922) (20) %

Interest income

14,922 14,671 251 2 %

1,097 1,673 (576) (34) %

Total revenues

168,482 207,729 (39,247) (19) %

Property operating expenses 12,841 13,302 (461) (3) %

155,641 194,427 (38,786) (20) %

Other expenses:

Depreciation and amortization

56,667 57,694 (1,027) (2) %

Interest expense

1,882 2,852 (970) (34) %

Loss (gain) on derivatives and financial instruments, net

1,934 7,651 (5,717) (75) %

Provision for loan losses

853 7,072 (6,219) (88) %

Impairment of assets

18,964 24,332 (5,368) (22) %

Other expenses

4,983 513 4,470 871 %

85,283 100,114 (14,831) (15) %

Income (loss) from continuing operations before income taxes and other items 70,358 94,313 (23,955) (25) %

Income (loss) from unconsolidated entities 4,907 5,796 (889) (15) %

Gain (loss) on real estate dispositions, net 2,042 49,637 (47,595) (96) %

Income from continuing operations 77,307 149,746 (72,439) (48) %

Net income 77,307 149,746 (72,439) (48) %

Net income (loss) attributable to noncontrolling interests 3,400 18,575 (15,175) (82) %

Net income attributable to common stockholders $ 73,907 $ 131,171 $ (57,264) (44) %

(1) See Non-GAAP Financial Measures below.

Continued decreases in rental income are primarily attributable to the reserve for straight-line rent receivables balances of $49,241,000 and $32,268,000 during the three month periods ended March 31, 2021 and 2020, respectively, relating to leases for which collection of substantially all contractual lease payments was no longer deemed probable.

Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties.

These escalators are not fixed, so no straight-line rent is recorded;

however, rental income is recorded based on the contractual cash rental payments due for the period.

If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase.

For the three months ended March 31, 2021, we had 16 leases with rental rate increases ranging from 0.25% to 10.00% in our Triple-net portfolio.

Our Triple-net operators are experiencing similar impacts on occupancy and operating costs due to the COVID-19 pandemic as described above with respect to our Seniors Housing Operating properties.

However, long-term/post-acute facilities are generally experiencing a higher degree of occupancy declines which may impact the ability of our Triple-net operators to make contractual rent payments to us in the future.

Many of our Triple-net operators received funds under the CARES Act Paycheck Protection Program.

In addition, operators of long-term/post-acute facilities have generally received funds from Phase 1 of the Provider Relief Fund and operators of assisted living facilities have received funds from Phase 2 and Phase 3 of the Provider Relief Fund.

During the first quarter, we collected approximately 96% of rent due from operators under Triple-net lease agreements (primarily seniors housing and post-acute care facilities).

No significant rent deferrals or rent concessions have been made.

We evaluate leases individually and recognize rent on a cash basis if collectibility of substantially all contractual rent payments is not probable.

Depreciation and amortization fluctuates as a result of the acquisitions, dispositions and transitions of triple-net properties.

To the extent we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

In March 2020, we recognized a provision for loan losses of $6,898,000 to fully reserve for a non-real estate loans receivable that was no longer deemed collectible.

During the three months ended March 31, 2021, we recorded impairment charges of $18,964,000 related to one held for sale property and two held for use properties.

During the three months ended March 31, 2020, we recorded impairment charges of $24,332,000 related to two held for use properties.

Changes in the gain on sales of properties are related to the volume and timing of property sales and the sales prices.

Transaction costs related to asset acquisitions are capitalized as a component of purchase price.

The fluctuation in other expenses is primarily due to noncapitalizable transaction costs from acquisitions and segment transitions.

Management's Discussion and Analysis of Financial Condition and Results of Operations

During the three months ended March 31, 2021, we completed one Triple-net construction project representing $22,990,000 or $280,366 per unit.

The following is a summary of Triple-net construction projects, excluding expansions, pending as of March 31, 2021 (dollars in thousands):

Location Units/Beds Commitment Balance Est.

Redhill, UK 76 $ 21,932 $ 12,097 2Q21

Leicester, UK 60 15,449 6,495 1Q22

London, UK 82 44,508 22,738 2Q22

Wombourne, UK 66 16,553 6,434 2Q22

Rugby, UK 76 21,123 3,782 4Q22

Raleigh, NC 191 154,256 20,185 2Q23

551 $ 273,821 $ 71,731

Loss (gain) on derivatives and financial instruments, net is primarily attributable to the mark-to-market adjustment recorded on our Genesis Healthcare available-for-sale investment.

Interest expense represents secured debt interest expense and related fees.

The change in secured debt interest expense is due to the net effect and timing of assumptions, segment transitions, fluctuations in foreign currency rates, extinguishments and principal amortizations.

The following is a summary of our Triple-net secured debt principal activity for the periods presented (dollars in thousands):

Three Months Ended

March 31, 2021 March 31, 2020

Amount Interest Rate Amount Interest Rate

Beginning balance $ 123,652 4.91 % $ 306,038 3.60 %

Principal payments (1,220) 5.15 % (1,059) 5.17 %

Foreign currency 707 5.43 % (15,240) 3.40 %

Ending balance $ 123,139 4.91 % $ 289,739 3.55 %

Monthly averages $ 123,126 4.96 % $ 299,111 3.59 %

A portion of our Triple-net properties were formed through partnerships.

Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner.

Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.

The decrease during the three months ended March 31, 2021, relates primarily to our partner's share of a gain on sale of certain properties in the prior year.

Outpatient Medical

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

Three Months Ended Change

March 31, 2021 March 31, 2020 $ %

$ 97,196 $ 94,208 $ 2,988 3.2 %

(1) For the three months ended March 31, 2021 and 2020, amounts relate to 334 same store properties, respectively.

Please see Non-GAAP Financial Measures for additional information and reconciliations.

The following is a summary of our results of operations for the Outpatient Medical segment for the periods presented (dollars in thousands):

Management's Discussion and Analysis of Financial Condition and Results of Operations

Three Months Ended Change

March 31, March 31,

2021 2020 $ %

Rental income $ 150,380 $ 198,575 $ (48,195) (24) %

Interest income 3,538 466 3,072 659 %

Other income 2,305 288 2,017 700 %

Total revenues 156,223 199,329 (43,106) (22) %

Property operating expenses 46,863 60,608 (13,745) (23) %

109,360 138,721 (29,361) (21) %

Other expenses:

Depreciation and amortization 55,173 70,333 (15,160) (22) %

Interest expense 4,015 4,808 (793) (16) %

Provision for loan losses 279 — 279 n/a

Other expenses 712 1,007 (295) (29) %

60,179 76,148 (15,969) (21) %

Income (loss) from continuing operations before income taxes and other items

49,181 62,573 (13,392) (21) %

Income (loss) from unconsolidated entities 2,908 1,536 1,372 89 %

Gain (loss) on real estate dispositions, net 51,843 213,336 (161,493) n/a

Income from continuing operations 103,932 277,445 (173,513) (63) %

Net income (loss) 103,932 277,445 (173,513) (63) %

Net income (loss) attributable to noncontrolling interests 2,170 2,453 (283) (12) %

Net income (loss) attributable to common stockholders $ 101,762 $ 274,992 $ (173,230) (63) %

(1) See Non-GAAP Financial Measures.

Rental income has decreased for the three month period ending March 31, 2021 due primarily to significant dispositions that have closed subsequent to March 31, 2020.

Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index.

These escalators are not fixed, so no straight-line rent is recorded;

however, rental income is recorded based on the contractual cash rental payments due for the period.

If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase.

Our leases could renew above or below current rental rates, resulting in an increase or decrease in rental income.

For the three months ended March 31, 2021, our consolidated outpatient medical portfolio signed 89,863 square feet of new leases and 541,434 square feet of renewals.

The weighted-average term of these leases was six years, with a rate of $36.84 per square foot and tenant improvement and lease commission costs of $12.57 per square foot.

Substantially all of these leases contain an annual fixed or contingent escalation rent structure ranging from 1.0% to 3.5%.

We have collected 99% of rent due in the first quarter, with uncollected amounts primarily attributable to local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants.

We evaluate leases individually and recognize rent on a cash basis if collectibility of substantially all contractual rent payments is not probable.

The fluctuation in property operating expenses and depreciation and amortization are primarily attributable to the significant dispositions that occurred in 2020.

To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly.

Changes in gains/losses on sales of properties are related to volume of property sales and the sales prices.

Transaction costs related to asset acquisitions are capitalized as a component of purchase price.

The fluctuation in other expenses is primarily due to noncapitalizable transaction costs from acquisitions and segment transitions.

During the three months ended March 31, 2021, there were no Outpatient Medical construction projects completed.

The following is a summary of the Outpatient Medical construction projects, excluding expansions, pending as of March 31, 2021 (dollars in thousands):

Location Square Feet Commitment Balance Est.

Brooklyn, NY 140,955 $ 110,306 $ 106,692 2Q21

Kalamazoo, MI 40,607 14,267 5,917 3Q21

College Station, TX 25,200 9,025 1,111 1Q22

206,762 $ 133,598 $ 113,720

Total interest expense represents secured debt interest expense.

The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations.

The following is a summary of our outpatient medical secured debt principal activity (dollars in thousands):

Management's Discussion and Analysis of Financial Condition and Results of Operations

Three Months Ended

March 31, 2021 March 31, 2020

Amount Interest Rate Amount Interest Rate

Beginning balance $ 548,229 3.55 % $ 572,267 3.97 %

Principal payments (2,474) 4.46 % (2,293) 4.65 %

Ending balance $ 545,755 3.54 % $ 569,974 3.94 %

Monthly averages $ 546,613 3.54 % $ 571,200 3.97 %

A portion of our Outpatient Medical properties were formed through partnerships.

Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner.

Net income attributable to noncontrolling interests represents our partners’ share of net income or loss relating to those partnerships where we are the controlling partner.

Non-Segment/Corporate

The following is a summary of our results of operations for the Non-Segment/Corporate activities for the periods presented (dollars in thousands):

Three Months Ended Change

March 31, March 31,

2021 2020 $ %

$ 955 $ 416 $ 539 130 %

Total revenue

955 416 539 130 %

Property operating expenses 1,654 — 1,654 n/a

(699) 416 (1,115) (268) %

Interest expense

105,827 117,913 (12,086) (10) %

General and administrative expenses

29,926 35,481 (5,555) (16) %

Other expenses

1,840 1,783 57 3 %

137,593 155,177 (17,584) (11) %

Loss from continuing operations before income taxes and other items (138,292) (154,761) 16,469 11 %

Income tax (expense) benefit (3,943) (5,442) 1,499 28 %

Loss from continuing operations (142,235) (160,203) 17,968 11 %

Net loss attributable to common stockholders $ (142,235) $ (160,203) $ 17,968 11 %

(1) See Non-GAAP Financial Measures.

Property operating expenses represent insurance costs related to our captive insurance company formed as of July 1, 2020 which acts as a direct insurer of property level insurance coverage for our portfolio.

The following is a summary of our Non-Segment/Corporate interest expense for the periods presented (dollars in thousands):

Three Months Ended Change

March 31, March 31,

2021 2020 $ %

Senior unsecured notes $ 100,213 $ 103,533 $ (3,320) (3) %

Unsecured credit facility and commercial paper program 1,180 10,169 (8,989) (88) %

Loan expense 4,434 4,211 223 5 %

Totals $ 105,827 $ 117,913 $ (12,086) (10) %

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments, as well as the movement in foreign exchange rates and related hedge activity.

Please refer to Note 11 for additional information.

The change in interest expense on our unsecured revolving credit facility and commercial paper program is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes.

Please refer to Note 10 for additional information regarding our unsecured revolving credit facility and commercial paper program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements