Slide 1: Business Update October 4, 2022
Business Update October 4, 2022
Slide 2: Forward Looking Statements and Risk Factors
Forward Looking Statements and Risk Factors This document contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “pro forma,” “estimat
Slide 3: Recent Highlights – Since Previous Business Update on August 9, 2022
Recent Highlights – Since Previous Business Update on August 9, 2022 Seniors Housing Operating (SHO) Portfolio • Year-over-year average occupancy growth from 3Q2021 to 3Q2022 expected to be in line with previous expectation for approximately +400 bps(2) • Pricing power remains robust as evidenced by
Slide 4: Secular Growth Outlook
Secular Growth Outlook
Slide 5: Seniors Housing | Compelling Backdrop for Multi-Year Revenue Growth
Seniors Housing | Compelling Backdrop for Multi-Year Revenue Growth Accelerating 80+ Population Growth Coinciding with Diminishing New Supply & Improved Affordability US 80+ Population Growth Seniors Housing Net Inventory Growth Rate Seniors Housing Affordability(1) Indexed Growth Since 2008 20M 4.0
Slide 6: Seniors Housing Supply | Significant Decline in Construction Starts
Seniors Housing Supply | Significant Decline in Construction Starts Prohibitive Cost to Build to Result in Further Diminution of New Supply Historical Cost Index(1) Seniors Housing Construction Starts(2) 300 5.0% Starts (% Inventory) 4.5% 280 4.0% 260 3.5% 240 3.0% 220 2.5% 200 2.0% 1.5% 180 1. Sour
Slide 7: Slower Net Inventory Growth Sets Stage For Occupancy Gains
Slower Net Inventory Growth Sets Stage For Occupancy Gains Meaningful Deceleration in Net Inventory Growth Paving the Way for MULTI-YEAR OCCUPANCY GAINS Deliveries Obsolescence Rate Net Inventory Growth Rate (% Inventory) (Deletions % Inventory) AL IL SH AL IL SH AL IL SH 5.5% 6.5% 1.8% 5.0% SH decl
Slide 8: Significant Wealth Accumulation Allows for Greater SH Affordability
Significant Wealth Accumulation Allows for Greater SH Affordability Backdrop to drive rate growth remains favorable Home Price Appreciation | 1987—Present S&P500 | 1981 – Present(2) S&P/Case-Shiller U.S. National Home Price Index 5000 300 4500 250 4000 3500 200 3000 2500 150 2000 100 1500 1000 50 (1
Slide 9: Global Financial Crisis Case Study
Global Financial Crisis Case Study Resilient Demand During GFC Driven By Needs-Based Nature of Seniors Housing Seniors Housing Average Occupancy(1) TTM Market Rent Growth(2) Existing Home Sales(3) 4.0% 7.0 95% Seniors housing occupancy remained stable 6.5 2.0% through the GFC despite a significant N
Slide 10: Healthcare Employment Trends
Healthcare Employment Trends(1) Healthcare Employee Wage Growth US Healthcare and Social Assistance Employment 22K Meaningful deceleration in wage growth during 21K Employment declined 11% in April 7.0% periods of weak economic conditions 2020, matching 2015 levels 20K 6.0% 19K 5.0% 18K 17K 4.0% 16K
Slide 11: Occupancy Continues to Outperform Seasonal Trends
Occupancy Continues to Outperform Seasonal Trends SHO Portfolio Same Store Sequential Occupancy Change(1,2) Pre-COVID Avg 2022 1.2% 1.0% 1.0% 0.8% 0.6% 0.4% 0.30% 0.2% 0.2% 0.0% 0.0% -0.2% -0.4% Since the occupancy trough in late-1Q2021, sequential average occupancy growth has meaningfully outpaced
Slide 12: SHO Portfolio | Path to Recovery
SHO Portfolio I Path to Recovery Category NOI A) 2Q22 Total Portfolio—IPNOI Portfolio ex HHS(1) B) 4019 Open Properties Occupancy Recovery (ex. Transitions) C) Transition Properties D) Fill-Up Properties E) Lease-Up of COVID Class Acquisitions (4020-2022) 2Q22 Total Portfolio—Post COVID Recovery NOI
Slide 13: Pro Forma Leverage Reduction in Net Debt/Adjusted EBITDA
Pro Forma Leverage Reduction in Net Debt/Adjusted EBITDA 7.20x 0.13x 7.12x 7.00x 0.04x 0.07x 0.75x 6.80x 6.60x 6.40x 6.20x 6.13x 6.00x 2Q22 ex HHS(1) 2Q22 Transaction 3Q22 QTD Transaction Proceeds from Assets Settlement of Equity Current Pro Forma Run Rate(2) Run Rate (3) Held for Sale (4) Sold on F
Slide 14: Capital Allocation
Capital Allocation
Slide 15: Barbell Capital Allocation Strategy
Barbell Capital Allocation Strategy WELLNESS HOUSING Platform Provides Safe and Accessible Rental Housing SENIORS HOUSING Platform Growth Focused on Luxury-End of Affluent Micro Markets to Broader Group of Age-Targeted Residents • Capital deployment concentrated within highly desirable micro markets
Slide 16: Capital Deployment Since 4Q20
Capital Deployment Since 4Q20 Capital Deployment Volume(1) ✓ Initial yield of 5.9%; Stable yield of approximately 7.8% GROSS ✓ Low last-dollar exposure and innovative structure offer downside protection $8.6B INVESTMENTS ✓ Expected to generate high-single-digit to mid-teens unlevered IRRs to WELL Gr
Slide 17: Foundation for Long-Term Growth Established
Foundation for Long-Term Growth Established Opportunity to deploy in excess of $3.0 billion Annually | Economics Defined During Pandemic NEW and PROPRIETARY long-term relationships with best-in-class developers and operators with either exclusive rights or right of first offer 5 21 4 30 $30B+ Relati
Slide 18: Transition Case Studies
Transition Case Studies
Slide 19: West Coast Transition Portfolio
West Coast Transition Portfolio Transition of 12 Well-Located West Coast Assets Expected to Drive Longer-Term Performance Upside Transition Portfolio Overview • The portfolio was acquired as part of Welltower’s 20-property 2016 Vintage acquisition and consists of 2,010 assisted living units across 1
Slide 20: Oakmont Vintage Transition Case Study – August 2021
Oakmont Vintage Transition Case Study – August 2021 Transitioned Six Facilities to Oakmont in 2021; Expected to Drive Meaningful Value Through Improved Performance Predicted Performance Operational Update • WELL transitioned management of six predominately assisted living facilities that were 85% pr
Slide 21: Supplemental Financial Measures
Supplemental Financial Measures 21
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures We believe that revenues, net income and net income attributable to common stockholders (“NICS”), as defined by U.S. generally accepted accounting principles (“U.S. GAAP”), are the most appropriate earnings measurements. However, we consider Net Operating Income (“NOI”),
Slide 23: FFO and Normalized FFO
FFO and Normalized FFO Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or
Slide 24: NOI, IPNOI, EBITDA & Adjusted EBITDA
NOI, IPNOI, EBITDA & Adjusted EBITDA We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not lim
Slide 25: Earnings Outlook Reconciliation
Earnings Outlook Reconciliation Outlook Reconciliation: Quarter Ending September 30, 2022 (in millions, except per share data) Current Outlook Low High FFO Reconciliation: Net income attributable to common stockholders $ 57 $ 81 Depreciation and amortization(1) 334 334 NAREIT FFO and Normalized FFO
Slide 26: In-Place NOI Reconciliations
In-Place NOI Reconciliations (dollars in thousands) 2Q22 In-Place NOI by property type 2Q22 % of Total Net income (loss) $ 95,672 Seniors Housing Operating $ 895,796 46 % Loss (gain) on real estate dispositions, net 3,532 Seniors Housing Triple-net 367,496 19 % Loss (income) from unconsolidated enti
Slide 27: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA (dollars in thousands) Three Months Ended Three Months Ended June 30, June 30, 2022 2022 Net income $ 95,672 Long-term debt obligations(4,5) $ 15,144,432 Interest expense 127,750 Cash and cash equivalents and restricted cash (442,251) Income tax expense (benefit) 3,065 Ne
Slide 28: Pro Forma Net Debt to Adjusted EBITDA
Pro Forma Net Debt to Adjusted EBITDA (dollars in thousands) 3Q22 Announced June 30, 2022 Held-for- Three Months Ended Three Months Ended 2Q22 Acquisitions and Acquisitions and Loan ATM Forward Sale Sale Dispositions & June 30, 2022 June 30, 2022 (Actual) (1) HHS Received(2) Dispositions (3) Funding
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