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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
     
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
     
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                      
Commission file number: 1-8923
WELLTOWER INC.
 
(Exact name of registrant as specified in its charter
Delaware 34-1096634
(State or other jurisdiction
of Incorporation)
(IRS Employer
Identification No.)
4500 Dorr Street Toledo, Ohio 43615
(Address of principal executive offices) (Zip Code)
(419) 247-2800
(Registrant’s telephone number, including area code)  
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, $1.00 par value per share WELL New York Stock Exchange
4.800% Notes due 2028 WELL28 New York Stock Exchange
4.500% Notes due 2034 WELL34 New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ  No  ¨
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ  No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 þ
 Accelerated filer
¨
 Non-accelerated filer
¨
 Smaller reporting company
Emerging growth company
(Do not check if a smaller reporting company)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No  þ
As of April 23, 2021, the registrant had 417,520,500 shares of common stock outstanding. 



TABLE OF CONTENTS
 
  Page
PART I. FINANCIAL INFORMATION  
   
Item 1. Financial Statements (Unaudited)
3
   
Consolidated Balance Sheets
3
   
Consolidated Statements of Comprehensive Income
4
   
Consolidated Statements of Equity
6
   
Consolidated Statements of Cash Flows
7
   
Notes to Unaudited Consolidated Financial Statements
8
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
Item 4. Controls and Procedures
   
PART II. OTHER INFORMATION  
   
Item 1. Legal Proceedings
   
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   
Item 5. Other Information
   
Item 6. Exhibits
   
Signatures



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 

CONSOLIDATED BALANCE SHEETS
WELLTOWER INC. AND SUBSIDIARIES
(In thousands) 
March 31, 2021 (Unaudited) December 31, 2020 (Note)
Assets:  
   
Real estate investments:  
   
Real property owned:  
Land and land improvements  
$ 3,397,055  $ 3,440,650 
Buildings and improvements  
27,667,188  28,024,971 
Acquired lease intangibles  
1,506,823  1,500,030 
Real property held for sale, net of accumulated depreciation  
564,062  216,613 
Construction in progress  
542,302  487,742 
Less accumulated depreciation and amortization  
(6,212,432) (6,104,297)
Net real property owned  
27,464,998  27,565,709 
Right of use assets, net 454,787  465,866 
Real estate loans receivable, net of credit allowance   487,674  443,372 
Net real estate investments   28,407,459  28,474,947 
Other assets:  
Investments in unconsolidated entities  
1,020,010  946,234 
Goodwill  
68,321  68,321 
Cash and cash equivalents  
2,131,846  1,545,046 
Restricted cash  
426,976  475,997 
Straight-line rent receivable
312,721  344,066 
Receivables and other assets  
624,918  629,031 
Total other assets  
4,584,792  4,008,695 
Total assets  
$ 32,992,251  $ 32,483,642 
Liabilities and equity  
Liabilities:  
Senior unsecured notes  
$ 12,183,710  $ 11,420,790 
Secured debt  
2,329,474  2,377,930 
Lease liabilities
408,916  418,266 
Accrued expenses and other liabilities  
1,023,219  1,041,594 
Total liabilities  
15,945,319  15,258,580 
Redeemable noncontrolling interests  
355,915  343,490 
Equity:  
Common stock  
418,866  418,691 
Capital in excess of par value  
20,814,196  20,823,145 
Treasury stock  
(106,519) (104,490)
Cumulative net income  
8,399,144  8,327,598 
Cumulative dividends  
(13,598,673) (13,343,721)
Accumulated other comprehensive income (loss)  
(128,136) (148,504)
Total Welltower Inc. stockholders’ equity  
15,798,878  15,972,719 
Noncontrolling interests  
892,139  908,853 
Total equity  
16,691,017  16,881,572 
Total liabilities and equity  
$ 32,992,251  $ 32,483,642 
Note: The consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

3


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands, except per share data) 
Three Months Ended
March 31,
  2021 2020
Revenues:
Resident fees and services
$ 723,464    $ 849,972 
Rental income  
302,843  389,960 
Interest income
19,579  15,241 
Other income
6,176  3,429 
Total revenues
1,052,062  1,258,602 
Expenses:
Property operating expenses
617,326  681,781 
Depreciation and amortization
244,426  274,801 
Interest expense
123,142  142,007 
General and administrative expenses
29,926  35,481 
Loss (gain) on derivatives and financial instruments, net
1,934  7,651 
Loss (gain) on extinguishment of debt, net
(4,643) — 
Provision for loan losses
1,383  7,072 
Impairment of assets
23,568  27,827 
Other expenses
10,994  6,292 
Total expenses
1,048,056  1,182,912 
Income (loss) from continuing operations before income taxes and other items 4,006  75,690 
Income tax (expense) benefit (3,943) (5,442)
Income (loss) from unconsolidated entities 13,049  (3,692)
Gain (loss) on real estate dispositions, net 59,080  262,824 
Income (loss) from continuing operations 72,192  329,380 
Net income 72,192  329,380 
Less: Net income (loss) attributable to noncontrolling interests(1)
646  19,096 
Net income (loss) attributable to common stockholders $ 71,546  $ 310,284 
Average number of common shares outstanding:
Basic
417,241  410,306 
Diluted
419,079  412,420 
Earnings per share:
Basic:
Income (loss) from continuing operations
$ 0.17  $ 0.80 
Net income (loss) attributable to common stockholders
$ 0.17  $ 0.76 
Diluted:
Income (loss) from continuing operations
$ 0.17  $ 0.80 
Net income (loss) attributable to common stockholders(2)
$ 0.17  $ 0.75 
Dividends declared and paid per common share $ 0.61  $ 0.87 
(1) Includes amounts attributable to redeemable noncontrolling interests.
(2) Includes adjustment to the numerator for income (loss) attributable to OP unitholders.


4


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands) 
  Three Months Ended
March 31,
  2021 2020
Net income $ 72,192  $ 329,380 
Other comprehensive income (loss):
Foreign currency translation gain (loss) 44,210  (265,577)
Derivative and financial instruments designated as hedges gain (loss) (20,037) 259,112 
Total other comprehensive income (loss) 24,173  (6,465)
Total comprehensive income (loss) 96,365  322,915 
Less: Total comprehensive income (loss) attributable
to noncontrolling interests(1)
4,451  (3,313)
Total comprehensive income (loss) attributable to common stockholders $ 91,914  $ 326,228 
(1) Includes amounts attributable to redeemable noncontrolling interests.

5


CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended March 31, 2021
Common
Stock
Capital in
Excess of
Par Value
Treasury
Stock
Cumulative
Net Income
Cumulative
Dividends
Accumulated Other
Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
Balances at January 1, 2021 $ 418,691  $ 20,823,145  $ (104,490) $ 8,327,598  $ (13,343,721) $ (148,504) $ 908,853  $ 16,881,572 
Comprehensive income:
Net income (loss)
71,546  (177) 71,369 
Other comprehensive income (loss)
20,368  3,729  24,097 
Total comprehensive income 95,466 
Net change in noncontrolling interests (14,250) (20,266) (34,516)
Amounts related to stock incentive plans, net of forfeitures 175  5,393  (2,029) 3,539 
Net proceeds from issuance of common stock (92) (92)
Dividends paid:
Common stock dividends
(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
  Common
Stock
Capital in
Excess of
Par Value
Treasury
Stock
Cumulative
Net Income
Cumulative
Dividends
Accumulated Other
Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
Balances at January 1, 2020 $ 411,005  $ 20,190,119  $ (78,955) $ 7,353,966  $ (12,223,534) $ (112,157) $ 966,183  $ 16,506,627 
Cumulative change in accounting principle (Note 2) (5,212) (5,212)
Balances at January 1, 2020 (as adjusted for change in accounting principle) 411,005  20,190,119  (78,955) 7,348,754  (12,223,534) (112,157) 966,183  16,501,415 
Comprehensive income:
Net income (loss)
310,284  18,988  329,272 
Other comprehensive income (loss)
15,944  (21,955) (6,011)
Total comprehensive income 323,261 
Net change in noncontrolling interests 37,625  (29,662) 7,963 
Amounts related to stock incentive plans, net of forfeitures 246  6,608  (8,020) (1,166)
Net proceeds from issuance of common stock 6,975  583,890  590,865 
Dividends paid:
Common stock dividends
(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 

6


CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended
March 31,
  2021 2020
Operating activities:      
Net income   $ 72,192  $ 329,380 
Adjustments to reconcile net income to net cash provided from (used in) operating activities:  
Depreciation and amortization  
244,426  274,801 
Other amortization expenses  
4,197  3,220 
Provision for loan losses
1,383  7,072 
Impairment of assets  
23,568  27,827 
Stock-based compensation expense  
5,576  7,083 
Loss (gain) on derivatives and financial instruments, net  
1,934  7,651 
Loss (gain) on extinguishment of debt, net  
(4,643) — 
Loss (income) from unconsolidated entities
(13,049) 3,692 
Rental income less than (in excess of) cash received  
30,563  (2,119)
Amortization related to above (below) market leases, net  
(460) (565)
Loss (gain) on real estate dispositions, net  
(59,080) (262,824)
Distributions by unconsolidated entities
3,036  3,385 
Increase (decrease) in accrued expenses and other liabilities  
(4,406) (30,030)
Decrease (increase) in receivables and other assets  
(1,579) 43,284 
Net cash provided from (used in) operating activities   303,658  411,857 
 
Investing activities:  
Cash disbursed for acquisitions, net of cash acquired
(203,107) (390,802)
Cash disbursed for capital improvements to existing properties
(28,780) (69,382)
Cash disbursed for construction in progress
(73,605) (48,775)
Capitalized interest  
(4,496) (4,746)
Investment in loans receivable
(43,148) (10,441)
Principal collected on loans receivable  
2,852  10,045 
Other investments, net of payments  
664  (3,612)
Contributions to unconsolidated entities  
(94,095) (137,129)
Distributions by unconsolidated entities  
36,934  3,555 
Proceeds from (payments on) derivatives  
(6,567) (357)
Proceeds from sales of real property  
274,208  801,392 
Net cash provided from (used in) investing activities   (139,140) 149,748 
Financing activities:  
Net increase (decrease) under unsecured credit facility and commercial paper
—  (742,612)
Net proceeds from issuance of senior unsecured notes 713,907  — 
Net proceeds from the issuance of secured debt  
—  44,921 
Payments on secured debt  
(57,888) (31,566)
Net proceeds from the issuance of common stock  
—  591,001 
Payments for deferred financing costs and prepayment penalties  
(1,221) (722)
Contributions by noncontrolling interests(1)
5,073  9,084 
Distributions to noncontrolling interests(1)
(30,117) (50,124)
Cash distributions to stockholders  
(254,915) (354,678)
Other financing activities
(2,936) (9,599)
Net cash provided from (used in) financing activities   371,903  (544,295)
Effect of foreign currency translation on cash and cash equivalents and restricted cash 1,358  (10,010)
Increase (decrease) in cash, cash equivalents and restricted cash   537,779  7,300 
Cash, cash equivalents and restricted cash at beginning of period   2,021,043  385,766 
Cash, cash equivalents and restricted cash at end of period   $ 2,558,822  $ 393,066 
Supplemental cash flow information:
Interest paid $ 135,947  $ 140,216 
Income taxes paid (received), net (852) 471 
(1) Includes amounts attributable to redeemable noncontrolling interests.

7

WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Business
Welltower Inc. (the "Company"), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a 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. 
2. Accounting Policies and Related Matters
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. 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. 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:
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, rapid distribution and a high acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S. and U.K. has resulted in a significant decrease in total resident case counts since mid-January 2021 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
Spot occupancy (1)
85.4  % 75.9  % 74.4  % 73.6  % 73.6  %
Sequential occupancy change (1.5) % (0.8) % —  %
(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. 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. 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.
8

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. Additionally, long-term/post-acute care facilities are generally experiencing a higher degree of occupancy declines. These factors may continue to 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 Coronavirus Aid Relief and Economic Security Act (“CARES Act”) Paycheck Protection Program. 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). 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. 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.
New Accounting Standards   
In August 2020, the FASB issued ASU 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. This ASU simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provides updated disclosure requirements. The ASU is effective for public business entities beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the guidance and the impact it may have on our consolidated financial statements.
In March 2020, the FASB issued an amendment to the reference rate reform standard which provides the option for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on contract modifications and hedge accounting. An example of such reform is the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. Entities that make this optional expedient election would not have to remeasure the contracts at the modification date or reassess the accounting treatment if certain criteria are met and would continue applying hedge accounting for relationships affected by reference rate reform. The new standard was effective for us upon issuance and elections can be made through December 31, 2022. We are currently evaluating our options with regards to existing contracts and hedging relationships and the impact of adopting this update on our consolidated financial statements.
3. Real Property Acquisitions and Development 
The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets and liabilities at cost on a relative fair value basis. Liabilities assumed and any associated noncontrolling interests are reflected at fair value. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. Transaction costs primarily represent costs incurred with acquisitions, including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs. Transaction costs related to asset acquisitions are capitalized as a component of purchase price and all other non-capitalizable costs are reflected in other expenses on our Consolidated Statements of Comprehensive Income.
The following is a summary of our real property investment activity by segment for the periods presented (in thousands):
9

WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
  Three Months Ended
  March 31, 2021 March 31, 2020
Seniors Housing Operating Triple-net Outpatient
Medical
Totals Seniors Housing Operating Triple-net Outpatient
Medical
Totals
Land and land improvements $ 1,240  $ 24,154  $ 2,273  $ 27,667  $ 15,758  $ —  $ 40,847  $ 56,605 
Buildings and improvements 3,491  170,362  10,570  184,423  132,480  765  171,457  304,702 
Acquired lease intangibles 339  —  1,439  1,778  10,810  —  23,823  34,633 
Receivables and other assets 34  —  —  34  257  —  139  396 
Total assets acquired (1)
5,104  194,516  14,282  213,902  159,305  765  236,266  396,336 
Accrued expenses and other liabilities —  (8,703) (36) (8,739) (671) —  (2,036) (2,707)
Total liabilities acquired —  (8,703) (36) (8,739) (671) —  (2,036) (2,707)
Noncontrolling interests (2)
—  (2,056) —  (2,056) (2,827) —  —  (2,827)
Cash disbursed for acquisitions 5,104  183,757  14,246  203,107  155,807  765  234,230  390,802 
Construction in progress additions 38,373  31,809  7,601  77,783  29,841  13,929  13,645  57,415 
Less: Capitalized interest (2,980) (524) (992) (4,496) (2,812) (941) (993) (4,746)
Accruals (3)
—  311  318  (2,600) —  (1,294) (3,894)
Cash disbursed for construction in progress 35,400  31,285  6,920  73,605  24,429  12,988  11,358  48,775 
Capital improvements to existing properties (3,159) 25,295  6,644  28,780  52,503  3,248  13,631  69,382 
Total cash invested in real property, net of cash acquired $ 37,345  $ 240,337  $ 27,810  $ 305,492  $ 232,739  $ 17,001  $ 259,219  $ 508,959 
(1) Excludes $580,000 of unrestricted and restricted cash acquired during the three months ended March 31, 2020.
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.
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
Development projects:
Seniors Housing Operating
$ —  $ 93,188 
Triple-net
22,990  — 
Outpatient Medical
—  19,369 
Total construction in progress conversions $ 22,990  $ 112,557 
4. 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
Assets:
In place lease intangibles $ 1,411,060  $ 1,406,705 
Above market tenant leases 53,066  52,621 
Lease commissions 42,697  40,704 
Gross historical cost 1,506,823  1,500,030 
Accumulated amortization (1,204,529) (1,177,513)
Net book value $ 302,294  $ 322,517 
Weighted-average amortization period in years 10.7 10.5
Liabilities:
Below market tenant leases $ 75,451  $ 77,851 
Accumulated amortization (40,542) (40,871)
Net book value $ 34,909  $ 36,980 
Weighted-average amortization period in years 8.2 8.3
10

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,
2021 2020
Rental income related to (above)/below market tenant leases, net $ 425  $ 524 
Amortization related to in place lease intangibles and lease commissions (22,779) (35,976)
The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):
  Assets Liabilities
2021 $ 55,162  $ 5,945 
2022 44,266  7,304 
2023 34,588  5,153 
2024 26,981  3,047 
2025 21,712  2,482 
Thereafter 119,585  10,978 
Total $ 302,294  $ 34,909 
5. Dispositions, Real Property Held for Sale and Impairment
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. Expected gross sales proceeds related to the held for sale properties is approximately $716,835,000.
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.
The following is a summary of our real property disposition activity for the periods presented (in thousands):
  Three Months Ended March 31,
  2021 2020
Real estate dispositions:
Seniors Housing Operating
$ 74,326  $ — 
Triple-net
—  33,445 
Outpatient Medical
137,890  495,003 
Total dispositions
212,216  528,448 
Gain (loss) on real estate dispositions, net 59,080  262,824 
Net other assets/liabilities disposed
2,912  10,120 
Proceeds from real estate dispositions $ 274,208  $ 801,392 
Operating results attributable to properties sold or classified as held for sale which do not meet the definition of discontinued operations are not reclassified on our Consolidated Statements of Comprehensive Income. The following represents the activity related to these properties for the periods presented (in thousands):
11

WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31,
  2021 2020
Revenues:
Total revenues
$ 21,024  $ 136,452 
Expenses:
Interest expense
17  3,806 
Property operating expenses
(1,102) 61,315 
Provision for depreciation
4,567  23,708 
Total expenses
3,482  88,829 
Income (loss) from real estate dispositions, net $ 17,542  $ 47,623 
6. Leases
We lease land, buildings, office space and certain equipment. Many of our leases include a renewal option to extend the term from one to 25 years or more. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities.
The components of lease expense were as follows for the period presented (in thousands):
Three Months Ended
  Classification March 31, 2021 March 31, 2020
Operating lease cost: (1)
Real estate lease expense Property operating expenses $ 5,358  $ 6,492 
Non-real estate investment lease expense General and administrative expenses 1,185  1,267 
Finance lease cost:
Amortization of leased assets Property operating expenses 2,035  2,243 
Interest on lease liabilities Interest expense 1,663  1,379 
Sublease income Rental income (1,043) (1,043)
Total   $ 9,198  $ 10,338 
(1) Includes short-term leases which are immaterial.
Supplemental balance sheet information related to leases is as follows (in thousands):
  Classification March 31, 2021 December 31, 2020
Right of use assets:
Operating leases - real estate Right of use assets, net $ 301,505  $ 310,017 
Finance leases - real estate Right of use assets, net 153,282  155,849 
Real estate right of use assets, net 454,787  465,866 
Operating leases - non-real estate investments Receivables and other assets 7,886  9,624 
Total right of use assets, net $ 462,673  $ 475,490 
Lease liabilities:
Operating leases $ 303,387  $ 311,164 
Financing leases 105,529  107,102 
Total $ 408,916  $ 418,266 
Substantially all of our operating leases in which we are the lessor contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. 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.
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.
12

WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
7. Loans Receivable
Loans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of allowance for credit losses, or for non-real estate loans receivable, in receivables and other assets, net of allowance for credit losses. Real estate loans receivable consists of mortgage loans and other real estate loans which are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guarantees and/or personal guarantees. Non-real estate loans are generally corporate loans with no real estate backing. 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. The following is a summary of our loans receivable (in thousands):
  March 31, 2021 December 31, 2020
Mortgage loans $ 338,291  $ 299,430 
Other real estate loans 158,066  152,739 
Allowance for credit losses on real estate loans receivable (8,683) (8,797)
Real estate loans receivable, net of credit allowance 487,674  443,372 
Non-real estate loans 458,391  455,508 
Allowance for credit losses on non-real estate loans receivable (215,463) (215,239)
Non-real estate loans receivable, net of credit allowance 242,928  240,269 
Total loans receivable, net of credit allowance $ 730,602  $ 683,641 
The following is a summary of our loan activity for the periods presented (in thousands):    
  Three Months Ended
  March 31, 2021 March 31, 2020
Advances on loans receivable:
Investments in new loans
$ 30,999  $ — 
Draws on existing loans
12,149  10,441 
Net cash advances on loans receivable
43,148  10,441 
Receipts on loans receivable:
Loan payoffs
1,620  — 
Principal payments on loans
1,232  10,045 
Net cash receipts on loans receivable 2,852  10,045 
Net cash advances (receipts) on loans receivable $ 40,296  $ 396 
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. 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. We evaluate the collectability of our loans receivable based on a combination of credit quality indicators, including, but not limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors, and nature, extent, and value of the underlying collateral.
A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement. For those loans we identified as having deteriorated credit quality we determine the amount of credit loss on an individual basis. Placement on non-accrual status may be required. Consistent with this definition, all loans on non-accrual are deemed to have deteriorated credit quality. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to income accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.
For the remaining loans we assess credit loss on a collective pool basis and use our historical loss experience for similar loans to determine the reserve for credit losses. The following is a summary of our loans by credit loss category (in thousands):
13

WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021
Loan category Years of Origination Loan Carrying Value Allowance for Credit Loss Net Loan Balance No. of Loans
Deteriorated loans 2007 - 2018 $ 241,012  $ (211,191) $ 29,821 
Collective loan pool 2007-2016 259,913  (5,061) 254,852  18 
Collective loan pool 2017 126,746  (1,488) 125,258 
Collective loan pool 2018 20,620  (404) 20,216 
Collective loan pool 2019 47,045  (923) 46,122 
Collective loan pool 2020 229,219  (4,488) 224,731  11 
Collective loan pool 2021 30,193  (591) 29,602 
Total loans $ 954,748  $ (224,146) $ 730,602  52 
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. 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
Balance at beginning of period $ 224,036  $ 68,372 
Adoption of ASU 2016-13 —  5,212 
Provision for loan losses 1,383  7,072 
Loan write-offs (1,322) — 
Foreign currency translation 49  (85)
Balance at end of period $ 224,146  $ 80,571 
The following is a summary of our deteriorated loans (in thousands):
  Three Months Ended
  March 31, 2021 March 31, 2020
Balance of deteriorated loans at end of period (1)
$ 241,012  $ 185,982 
Allowance for credit losses (211,191) (75,372)
Balance of deteriorated loans not reserved $ 29,821  $ 110,610 
Interest recognized on deteriorated loans (2)
$ 3,079  $ 4,046 
(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.
(2) Represents cash interest recognized in the period.
8. Investments in Unconsolidated Entities
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. The following is a summary of our investments in unconsolidated entities (dollars in thousands): 
 
Percentage Ownership (1)
March 31, 2021 December 31, 2020
Seniors Housing Operating
10% to 65%
$ 709,727  $ 653,057 
Triple-net
10% to 25%
5,575  5,629 
Outpatient Medical
15% to 50%
304,708  287,548 
Total   $ 1,020,010  $ 946,234 
(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. 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.
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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 believe that such borrowers typically represent variable interest entities ("VIE" or "VIEs") in accordance with ASC 810 Consolidation. VIEs are required to be consolidated by their primary beneficiary ("PB") which is the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impacts the entity's economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We have concluded that we are not the PB of such borrowers, therefore, the loan arrangements were assessed based on among other factors, the amount and timing of expected residual profits, the estimated fair value of the collateral and the significance of the borrower's equity in the project. 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.
9. Credit Concentration
We use consolidated net operating income (“NOI”) as our credit concentration metric. 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):
Concentration by relationship: (1)
Number of Properties Total NOI
Percent of NOI (2)
Sunrise Senior Living (3)
165  $ 60,933  14%
ProMedica 216  53,031  13%
Genesis Healthcare 52  26,871  7%
Revera (3)
92  20,865  5%
Avery Healthcare 61  20,623  5%
Remaining portfolio 912  252,413  56%
Totals 1,498  $ 434,736  100%
(1) Sunrise Senior Living and Revera are in our Seniors Housing Operating segment. Genesis Healthcare and ProMedica are in our Triple-net segment. Avery Healthcare is in both the Triple-net and Seniors Housing Operating segments.
(2) NOI with our top five relationships comprised 36% of total NOI for the year ended December 31, 2020.
(3) Revera owns a controlling interest in Sunrise Senior Living.
During the quarter ended March 31, 2021, we entered into definitive agreements to substantially exit our operating relationship with Genesis Healthcare ("Genesis"). 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. 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.
10. 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. 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 $1,000,000,000, 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). 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. 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.

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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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,
2021 2020
Balance outstanding at quarter end $ —  $ 845,000 
Maximum amount outstanding at any month end $ —  $ 2,100,000 
Average amount outstanding (total of daily
principal balances divided by days in period)
$ —  $ 1,593,816 
Weighted average interest rate (actual interest
expense divided by average borrowings outstanding)
—  % 2.21  %
 
11. Senior Unsecured Notes and Secured Debt 
We may repurchase, redeem or refinance senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. The senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of: (i) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (ii) any “make-whole” amount due under the terms of the notes in connection with early redemptions. 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):
Senior
Unsecured Notes (1,2)
Secured
Debt (1,3)
Totals
2021 $ —  $ 438,772  $ 438,772 
2022 (4)
870,000  463,891  1,333,891 
2023 (5,6)
1,372,602  373,613  1,746,215 
2024 1,350,000  183,982  1,533,982 
2025 1,250,000  180,595  1,430,595 
Thereafter (7,8,9)
7,436,990  695,319  8,132,309 
Totals $ 12,279,592  $ 2,336,172  $ 14,615,764 
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the Consolidated Balance Sheet.
(2) Annual interest rates range from 0.81% to 6.50%.
(3) Annual interest rates range from 0.04% 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).
(5) Includes a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $198,850,000 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).
(6) 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).
(7) Includes a $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 (approximately $238,620,000 based on the Canadian/U.S. Dollar exchange rate on March 31, 2021).
(8) Includes a £550,000,000 4.80% senior unsecured notes due 2028 (approximately $758,670,000 based on the Sterling/U.S. Dollar exchange rate in effect on March 31, 2021).
(9) Includes a £500,000,000 4.50% senior unsecured notes due 2034 (approximately $689,700,000 based on the Sterling/U.S. Dollar exchange rate in effect on March 31, 2021).
The following is a summary of our senior unsecured notes principal activity during the periods presented (dollars in thousands):

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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
  Three Months Ended
  March 31, 2021 March 31, 2020
  Weighted Avg. Weighted Avg.
  Amount Interest Rate Amount Interest Rate
Beginning balance $ 11,509,533  3.67% $ 10,427,562  4.03%
Debt issued 750,000  2.80% —  —%
Foreign currency 20,059  3.90% (120,689) 4.15%
Ending balance $ 12,279,592  3.62% $ 10,306,873  3.97%
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
  Weighted Avg. Weighted Avg.
  Amount Interest Rate Amount Interest Rate
Beginning balance $ 2,378,073  3.27% $ 2,993,342  3.63%
Debt issued —  —% 44,921  2.58%
Debt extinguished (41,933) 7.60% (16,040) 4.51%
Principal payments (15,955) 3.59% (15,526) 3.78%
Foreign currency 15,987  2.92% (102,059) 3.27%
Ending balance $ 2,336,172  3.14% $ 2,904,638  3.63%
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. 
12. Derivative Instruments
We are exposed to, among other risks, the impact of changes in foreign currency exchange rates as a result of our non-U.S. investments and interest rate risk related to our capital structure. Our risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes foreign currency forward contracts, cross currency swap contracts, interest rate swaps, interest rate locks and debt issued in foreign currencies to offset a portion of these risks.
Foreign Currency Forward Contracts Designated as Cash Flow Hedges
For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is deferred as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings. 
Cash Flow Hedges of Interest Rate Risk
We enter into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our fixed-rate payments. These interest rate swap agreements were used to hedge the variable cash flows associated with variable-rate debt.
Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized into income over the life of the related debt, except where a material amount is deemed to be ineffective, which would be immediately reclassified to the Consolidated Statements of Comprehensive Income. Approximately $2,562,000 of losses, which are included in OCI, are expected to be reclassified into earnings in the next 12 months.

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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Foreign Currency Forward Contracts and Cross Currency Swap Contracts Designated as Net Investment Hedges
We use foreign currency forward and cross currency forward swap contracts to hedge a portion of the net investment in foreign subsidiaries against fluctuations in foreign exchange rates. For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. Dollar of the instrument is recorded as a cumulative translation adjustment component of OCI.
Derivative Contracts Undesignated
We use foreign currency exchange contracts to manage existing exposures to foreign currency exchange risk. Gains and losses resulting from the changes in fair value of these instruments are recorded in interest expense on the Consolidated Statements of Comprehensive Income and are substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures. In addition, we have several interest rate cap contracts related to variable rate secured debt agreements. Gains and losses resulting from the changes in fair values of these instruments are also recorded in interest expense.
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
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars $ 625,000  $ 625,000 
Denominated in Pound Sterling £ 1,340,708  £ 1,340,708 
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars $ 250,000  $ 250,000 
Denominated in Pound Sterling £ 1,050,000  £ 1,050,000 
Interest rate swaps designated as cash flow hedges:
Denominated in U.S Dollars (1)
$ 25,000  $ 450,000 
Derivative instruments not designated:
Interest rate caps denominated in U.S. Dollars $ 26,137  $ 26,137 
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.
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,
Description Location 2021 2020
Gain (loss) on derivative instruments designated as hedges recognized in income Interest expense $ 6,024  $ 6,644 
Gain (loss) on derivative instruments not designated as hedges recognized in income Interest expense $ (719) $ (95)
Gain (loss) on derivative and financial instruments designated as hedges recognized in OCI OCI $ (20,037) $ 259,112 
13. 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. Rents due from the tenant are increased to reflect the additional investment in the property.




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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
14. Stockholders’ Equity 
The following is a summary of our stockholders’ equity capital accounts as of the dates indicated: 
  March 31, 2021 December 31, 2020
Preferred Stock:
Authorized shares 50,000,000  50,000,000 
Issued shares —  — 
Outstanding shares —  — 
Common Stock, $1.00 par value:
Authorized shares 700,000,000  700,000,000 
Issued shares 419,306,453  419,124,469 
Outstanding shares 417,520,420  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 remaining 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.
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"). Under this authorization, we are not required to purchase shares but may choose to do so in the open market or through private transactions at times and amounts based on our evaluation of market conditions and other factors. 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): 
  Shares Issued Average Price Gross Proceeds Net Proceeds
2020 Dividend reinvestment plan issuances 175,129  $ 84.54  $ 14,805  $ 14,805 
2020 Equity shelf program issuances 6,799,978  86.48  588,072  576,196 
2020 Stock incentive plans, net of forfeitures 158,818  —  — 
2020 Totals 7,133,925  $ 602,877  $ 591,001 
2021 Stock incentive plans, net of forfeitures 119,818  —  — 
2021 Totals 119,818  $ —  $ — 
Dividends The decrease in dividends is attributable to the declaration of a reduced cash dividend beginning with the quarter ending March 31, 2020. The following is a summary of our dividend payments (in thousands, except per share amounts): 
  Three Months Ended
  March 31, 2021 March 31, 2020
Per Share Amount Per Share Amount
Common stock $ 0.61  $ 254,952  $ 0.87  $ 356,001 
 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
Foreign currency translation $ (581,387) $ (621,792)
Derivative and financial instruments designated as hedges 453,251  473,288 
Total accumulated other comprehensive income (loss) $ (128,136) $ (148,504)



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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

15. Stock Incentive Plans
Our 2016 Long-Term Incentive Plan (“2016 Plan”) authorizes up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. Our non-employee directors, officers and key employees are eligible to participate in the 2016 Plan. 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. 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.
16. 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,
  2021 2020
Numerator for basic earnings per share - net income (loss) attributable to common stockholders
$ 71,546  $ 310,284 
Adjustment for net income (loss) attributable to OP units
(1,353) (1,388)
Numerator for diluted earnings per share
$ 70,193  $ 308,896 
Denominator for basic earnings per share - weighted average shares 417,241  410,306 
Effect of dilutive securities:
Non-vested restricted shares
421  702 
Redeemable OP units
1,396  1,396 
Employee stock purchase program
21  16 
Dilutive potential common shares 1,838  2,114 
Denominator for diluted earnings per share - adjusted weighted average shares
419,079  412,420 
Basic earnings per share $ 0.17  $ 0.76 
Diluted earnings per share $ 0.17  $ 0.75 
As of March 31, 2021, forward sales agreements outstanding for the sale of 2,214,760 shares of common stock were not included in the computation of diluted earnings per share because such forward sales were anti-dilutive for the period.
17. Disclosure about Fair Value of Financial Instruments 
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level valuation hierarchy exists for disclosures of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 for additional information. The three levels are defined below: 
Level 1 - Quoted prices in active markets for identical assets or liabilities. 
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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.


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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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. 
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. 
Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices. The carrying amount of the variable rate senior unsecured notes approximates fair value because they are interest rate adjustable. 
Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities. 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. The fair value is measured using the closing price of our common stock, as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock per unit, subject to adjustment in certain circumstances. 
The carrying amounts and estimated fair values of our financial instruments are as follows (in thousands):
  March 31, 2021 December 31, 2020
  Carrying Amount Fair Value Carrying Amount Fair Value
Financial assets:
Mortgage loans receivable $ 331,648  $ 331,710  $ 293,752  $ 297,207 
Other real estate loans receivable 156,026  157,310  149,620  152,211 
Equity securities 2,702  2,702  4,636  4,636 
Cash and cash equivalents 2,131,846  2,131,846  1,545,046  1,545,046 
Restricted cash 426,976  426,976  475,997  475,997 
Non-real estate loans receivable 242,928 260,351  240,269  255,724 
Foreign currency forward contracts, interest rate swaps and cross currency swaps 753  753  4,668  4,668 
Financial liabilities:
Senior unsecured notes $ 12,183,710  $ 13,377,367  $ 11,420,790  $ 13,093,926 
Secured debt 2,329,474  2,410,790  2,377,930  2,451,782 
Foreign currency forward contracts, interest rate swaps and cross currency swaps 84,985  84,985  118,054  118,054 
Redeemable OP unitholder interests $ 127,859  $ 127,859  $ 116,240  $ 115,346 
Items Measured at Fair Value on a Recurring Basis 
The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The following summarizes items measured at fair value on a recurring basis (in thousands):
  Fair Value Measurements as of March 31, 2021
  Total Level 1 Level 2 Level 3
Equity securities $ 2,702  $ 2,702  $ —  $ — 
Foreign currency forward contracts, interest rate swaps and cross currency swaps, net asset (liability) (1)
(84,232) —  (84,232) — 
Totals  $ (81,530) $ 2,702  $ (84,232) $ — 
(1) Please see Note 12 for additional information.
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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Items Measured at Fair Value on a Nonrecurring Basis 
In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities in our balance sheet that are measured at fair value on a nonrecurring basis that are not included in the tables above. Assets, liabilities and noncontrolling interests that are measured at fair value on a nonrecurring basis include those acquired or assumed. Asset impairments (if applicable, see Note 5 for impairments of real property and Note 7 for impairments of loans receivable) are also measured at fair value on a nonrecurring basis. We have determined that the fair value measurements included in each of these assets and liabilities rely primarily on company-specific inputs and our assumptions about the use of the assets and settlement of liabilities, as observable inputs are not available. As such, we have determined that each of these fair value measurements generally resides within Level 3 of the fair value hierarchy. We estimate the fair value of real estate and related intangibles using the income approach and unobservable data such as net operating income and estimated capitalization and discount rates. We also consider local and national industry market data including comparable sales, and commonly engage an external real estate appraiser to assist us in our estimation of fair value. We estimate the fair value of assets held for sale based on current sales price expectations or, in the absence of such price expectations, Level 3 inputs described above. We estimate the fair value of loans receivable using projected payoff valuations based on the expected future cash flows and/or the estimated fair value of collateral, net of sales costs, if the repayment of the loan is expected to be provided solely by the collateral. We estimate the fair value of secured debt assumed in asset acquisitions using current interest rates at which similar borrowings could be obtained on the transaction date. 
18. Segment Reporting
We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our three operating segments: Seniors Housing Operating, Triple-net and Outpatient Medical. Our Seniors Housing Operating properties include seniors apartments, assisted living, independent living/continuing care retirement communities, independent supportive living communities (Canada), care homes with and without nursing (U.K.) and combinations thereof that are owned and/or operated through RIDEA structures (see Note 19). Our Triple-net properties include the property types described above as well as long-term/post-acute care facilities. Under the Triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our Outpatient Medical properties are typically leased to multiple tenants and generally require a certain level of property management by us.
We evaluate performance based upon consolidated NOI of each segment. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.  
Non-segment revenue consists mainly of interest income on certain non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. All inter-segment transactions are eliminated.
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WELLTOWER INC.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Summary information for the reportable segments (which excludes unconsolidated entities) is as follows (in thousands): 
Three Months Ended March 31, 2021: Seniors Housing Operating Triple-net Outpatient Medical Non-segment / Corporate Total
Resident fees and services $ 723,464  $ —  $ —  $ —  $ 723,464 
Rental income —  152,463  150,380  —  302,843 
Interest income 1,119  14,922  3,538  —  19,579 
Other income 1,819  1,097  2,305  955  6,176 
Total revenues 726,402  168,482  156,223  955  1,052,062 
Property operating expenses 555,968  12,841  46,863  1,654  617,326 
Consolidated net operating income 170,434  155,641  109,360  (699) 434,736 
Depreciation and amortization 132,586  56,667  55,173  —  244,426 
Interest expense 11,418  1,882  4,015  105,827  123,142 
General and administrative expenses —  —  —  29,926  29,926 
Loss (gain) on derivatives and financial instruments, net —  1,934  —  —  1,934 
Loss (gain) on extinguishment of debt, net (4,643) —  —  —  (4,643)
Provision for loan losses 251  853  279  —  1,383 
Impairment of assets 4,604  18,964  —  —  23,568 
Other expenses 3,459  4,983  712  1,840  10,994 
Income (loss) from continuing operations before income taxes and other items 22,759  70,358  49,181  (138,292) 4,006 
Income tax (expense) benefit —  —  —  (3,943) (3,943)
Income (loss) from unconsolidated entities 5,234  4,907  2,908  —  13,049 
Gain (loss) on real estate dispositions, net 5,195  2,042  51,843  —  59,080 
Income (loss) from continuing operations 33,188  77,307  103,932  (142,235) 72,192 
Net income (loss) $ 33,188  $ 77,307  $ 103,932  $ (142,235) $ 72,192 
Total assets $ 16,032,225  $ 8,660,043  $ 6,380,835  $ 1,919,148  $ 32,992,251 
Three Months Ended March 31, 2020: Seniors Housing Operating Triple-net Outpatient Medical Non-segment / Corporate Total
Resident fees and services $ 849,972  $ —  $ —  $ —  $ 849,972 
Rental income —  191,385  198,575  —  389,960 
Interest income 104  14,671  466  —  15,241 
Other income 1,052  1,673  288  416  3,429 
Total revenues 851,128  207,729  199,329  416  1,258,602 
Property operating expenses 607,871  13,302  60,608  —  681,781 
Consolidated net operating income 243,257  194,427  138,721  416  576,821 
Depreciation and amortization 146,774  57,694  70,333  —  274,801 
Interest expense 16,434  2,852  4,808  117,913  142,007 
General and administrative expenses —  —  —  35,481  35,481 
Loss (gain) on derivatives and financial instruments, net —  7,651  —  —  7,651 
Provision for loan losses —  7,072  —  —  7,072 
Impairment of assets 3,495  24,332  —  —  27,827 
Other expenses 2,989  513 

1,007  1,783  6,292 
Income (loss) from continuing operations before income taxes and other items 73,565  94,313  62,573  (154,761) 75,690 
Income tax (expense) benefit —  —  —  (5,442) (5,442)
Income (loss) from unconsolidated entities (11,024) 5,796  1,536  —  (3,692)
Gain (loss) on real estate dispositions, net (149) 49,637  213,336  —  262,824 
Income (loss) from continuing operations 62,392  149,746  277,445  (160,203) 329,380 
Net income (loss) $ 62,392  $ 149,746  $ 277,445  $ (160,203) $ 329,380 


23

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. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for the periods presented (dollars in thousands): 
  Three Months Ended
  March 31, 2021 March 31, 2020
Revenues:
Amount(1)
% Amount %
United States $ 825,648  78.5  % $ 1,027,781  81.6  %
United Kingdom 118,874  11.3  % 117,882  9.4  %
Canada 107,540  10.2  % 112,939  9.0  %
Total $ 1,052,062  100.0  % $ 1,258,602  100.0  %
  As of
  March 31, 2021 December 31, 2020
Assets: Amount % Amount %
United States $ 27,112,760  82.1  % $ 26,658,659  82.1  %
United Kingdom 3,415,851  10.4  % 3,352,549  10.3  %
Canada 2,463,640  7.5  % 2,472,434  7.6  %
Total $ 32,992,251  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.
19. Income Taxes and Distributions 
We elected to be taxed as a REIT commencing with our first taxable year. To qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of taxable income in the current year are also subject to a 4% federal excise tax. The main differences between undistributed net income for federal income tax purposes and financial statement purposes are the recognition of straight-line rent for reporting purposes, basis differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax purposes. 
Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, a REIT may lease “qualified health care properties” on an arm’s-length basis to a taxable REIT subsidiary (“TRS”) if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent contractor”. Generally, the rent received from the TRS will meet the related party rent exception and will be treated as “rents from real property”. A “qualified health care property” includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients. We have entered into various joint ventures that were structured under RIDEA. Resident level rents and related operating expenses for these facilities are reported in the unaudited consolidated financial statements and are subject to federal and state income taxes as the operations of such facilities are included in TRS entities. Certain net operating loss carryforwards could be utilized to offset taxable income in future years. 
Income taxes reflected in the financial statements primarily represents U.S. federal, state and local income taxes as well as non-U.S. 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. 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. The structure includes a property holding company that is tax resident in the United Kingdom. No material adverse current tax consequences in Luxembourg, Jersey or the United Kingdom resulted from the creation of this holding company structure and most of the subsidiary entities in the structure are treated as disregarded entities of the company for U.S. federal income tax purposes. Subsequent to 2014 we transferred certain subsidiaries to the United Kingdom, while some wholly-owned direct and indirect subsidiaries remain in Luxembourg and Jersey. The company reflects current and deferred tax liabilities for any such withholding taxes incurred from this holding company structure in its consolidated financial statements. Generally, given current statutes of limitations, we are subject to audit by the foreign, federal, state and local taxing authorities under applicable local laws.
24

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. 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. We have made a reasonable estimate of the tax impact to us of the CARES Act in our consolidated financial statements, and while we do not believe that there will be further material impacts to the consolidated financial statements related to the CARES Act tax provisions, we will continue to evaluate the impact of the CARES Act and any guidance provided by the U.S. Treasury and the IRS on our consolidated financial statements. It is possible our estimates could differ materially from the actual tax impact to us of the