WIXLIB

NON-GAAP RECONCILIATIONSThe company believes that revenues and net income, as definedby U.S. generally accepted accounting principles (U.S. GAAP),are the most appropriate earnings measurements. However, thecompany considers EBITDA, Adjusted EBITDA, NOI, In-Place NOI(IPNOI) and SSNOI to be useful supplemental measures of itsoperating performance. Excluding EBITDA and Adjusted EBITDA,these supplemental measures are disclosed on a Welltower prorata ownership basis. Pro rata amounts are derived by reducingconsolidated amounts for minority partners’ noncontrollingownership interests and adding Welltower’s minority ownershipshare of unconsolidated amounts. Welltower does not controlunconsolidated investments. While the company considerspro rata disclosures useful, they may not accurately depict thelegal and economic implications of Welltower’s joint venturearrangements and should be used with caution.The company defines NOI as total revenues, including tenantreimbursements, less property operating expenses. Propertyoperating expenses represent costs associated with managing,maintaining and servicing tenants for our seniors housingoperating and outpatient medical properties. These expensesinclude, but are not limited to, property-related payroll andbenefits, property management fees paid to operators,marketing, housekeeping, food service, maintenance, utilities,property taxes and insurance. General and administrativeexpenses represent costs unrelated to property operations.These expenses include, but are not limited to, payroll andbenefits, professional services, office expenses and depreciationof corporate fixed assets. IPNOI represents NOI excludinginterest income, other income and non-IPNOI and adjusted fortiming of current quarter portfolio changes such as acquisitions,development conversions, segment transitions, dispositionsand investments held for sale. SSNOI is used to evaluate theoperating performance of our properties using a consistentpopulation which controls for changes in the composition ofour portfolio. As used herein, same store is generally definedas those revenue-generating properties in the portfolio for therelevant year-over-year reporting periods. Land parcels, loans,and sub-leases as well as any properties acquired, developed/redeveloped (including major refurbishments where 20% or moreof units are simultaneously taken out of commission for 30 daysor more), sold or classified as held for sale during that period areexcluded from the same store amounts. Properties undergoingoperator transitions and/or segment transitions (except triplenet to seniors housing operating with the same operator) arealso excluded from the same store amounts. Normalizers includeadjustments that in management’s opinion are appropriate inconsidering SSNOI, a supplemental, non-GAAP performancemeasure. None of these adjustments, which may increaseor decrease SSNOI, are reflected in the company’s financialstatements prepared in accordance with U.S. GAAP. Significantnormalizers (defined as any that individually exceed 0.50% ofSSNOI growth per property type) are separately disclosed andexplained. The company believes NOI, IPNOI and SSNOI provideinvestors relevant and useful information because they measurethe operating performance of the company’s properties at theproperty level on an unleveraged basis. The company uses NOI,IPNOI and SSNOI to make decisions about resource allocationsand to assess the property level performance of our properties.We measure our credit strength both in terms of leverage ratiosand coverage ratios. The leverage ratios indicate how much ofour balance sheet capitalization is related to long-term debt, netof cash and Internal Revenue Code (“IRC”) Section 1031 deposits.We expect to maintain capitalization ratios and coverage ratiossufficient to maintain a capital structure consistent with ourcurrent profile. The coverage ratios are based on EBITDA whichstands for earnings (net income per income statement) beforeinterest expense, income taxes, depreciation and amortization.Covenants in our senior unsecured notes and primary creditfacility contain financial ratios based on a definition of EBITDAthat is specific to those agreements. Failure to satisfy thesecovenants could result in an event of default that could have amaterial adverse impact on our cost and availability of capital,which could in turn have a material adverse impact on ourconsolidated results of operations, liquidity and/or financialcondition. Due to the materiality of these debt agreements andthe financial covenants, we have defined Adjusted EBITDA toexclude unconsolidated entities and to include adjustmentsfor stock-based compensation expense, provision for loanlosses, gains/losses on extinguishment of debt, gains/losses/impairments on properties, gains/losses on derivatives andfinancial instruments, other expenses, and additional otherincome. We believe that EBITDA and Adjusted EBITDA, alongwith net income and cash flow provided from operating activities,are important supplemental measures because they provideadditional information to assess and evaluate the performanceof our operations. We primarily utilize them to measure ourinterest coverage ratio, which represents EBITDA and AdjustedEBITDA divided by total interest, and our fixed charge coverageratio, which represents EBITDA and Adjusted EBITDA divided byfixed charges. Fixed charges include total interest, secured debtprincipal amortization and preferred dividends. Our leverageratios include net debt to Adjusted EBITDA, book capitalization,undepreciated book capitalization and market capitalization.Book capitalization represents the sum of net debt (definedas total long-term debt less cash and cash equivalents andany IRC Section 1031 deposits), total equity and redeemablenoncontrolling interests. Undepreciated book capitalizationrepresents book capitalization adjusted for accumulateddepreciation and amortization. Our leverage ratios are defined asthe proportion of net debt to total capitalization.The company’s supplemental reporting measures and similarlyentitled financial measures are widely used by investors,equity and debt analysts and rating agencies in the valuation,comparison, rating and investment recommendations ofcompanies. The company’s management uses these financialmeasures to facilitate internal and external comparisons tohistorical operating results and in making operating decisions.Additionally, these measures are utilized by the Board ofDirectors to evaluate management. None of the supplementalreporting measures represent net income or cash flow providedfrom operating activities as determined in accordance with U.S.GAAP and should not be considered as alternative measures ofprofitability or liquidity.Finally, the supplemental reporting measures, as defined bythe company, may not be comparable to similarly entitleditems reported by other real estate investment trusts or othercompanies. Multi-period amounts may not equal the sum of theindividual quarterly amounts due to rounding.

Form 10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018Commission File No. 1-8923WELLTOWER INC.(Exact name of registrant as specified in its charter)Delaware34-1096634(State or other jurisdiction ofincorporation or organization)(I.R.S. EmployerIdentification No.)4500 Dorr Street, Toledo, Ohio43615(Address of principal executive offices)(Zip Code)(419) 247-2800(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of Each ClassName of Each Exchange on Which RegisteredCommon Stock, 1.00 par value6.50% Series I CumulativeConvertible Perpetual Preferred Stock, 1.00 par value4.800% Notes due 20284.500% Notes due 2034New York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.Yes ÍYes ‘No ‘No ÍIndicate 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 Actof 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 tosuch filing requirements for the past 90 days. Yes ÍNo ‘Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant toRule 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 tosubmit and post such files). Yes ÍNo ‘Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not containedherein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference inPart III of this Form 10-K or any amendment to this Form 10-K. ÍIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany 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 ÍAccelerated 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 withany 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 ÍThe aggregate market value of the shares of voting common stock held by non-affiliates of the registrant, computed by reference to the closingsales price of such shares on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscalquarter was 23,282,837,560.As of February 13, 2019, the registrant had 386,361,193 shares of common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held May 2, 2019, are incorporated byreference into Part III.

WELLTOWER INC. AND SUBSIDIARIES2018 FORM 10-K ANNUAL REPORTTABLE OF CONTENTSPagePART IBusiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Risk F

These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. IPNOI represents NOI excluding interest income, other income and non-IPNOI and adjusted