Financial Data and Key Metrics Changes - Welltower reported a net income attributable to common stockholders of $0.41 per diluted share and normalized funds from operations (FFO) of $1.34 per diluted share, representing a year-over-year growth of 20.7% [23] - The total portfolio same-store net operating income (NOI) growth was 14.5% year-over-year [23] - Year-over-year organic revenue growth remained at approximately 10%, driven by a 400 basis point occupancy gain and strong pricing power [13] Business Line Data and Key Metrics Changes - The senior housing portfolio achieved same-store NOI growth exceeding 20% for the 12th consecutive quarter, marking an exceptional performance [12] - Operating margins across the same-store portfolio increased by 260 basis points, with growth in unit revenue (RevPor) outpacing unit expense growth (ExPor) [13] - The seniors housing triple-net portfolio's same-store NOI increased by 3.1% year-over-year, with trailing 12-month EBITDA coverage at 1.21x [24] Market Data and Key Metrics Changes - The U.K. portfolio saw a 550 basis point year-over-year increase in occupancy, leading to a 10.4% revenue increase [13] - The backdrop for growth in 2026 and beyond remains favorable, with senior housing demand expected to grow stronger while supply remains dormant [14] Company Strategy and Development Direction - Welltower is transitioning to a pure-play rental housing platform for the aging population, focusing on technology-driven transformation and operational excellence [5][14] - The company is exiting the outpatient property management business to concentrate on senior living, which is seen as a high-growth opportunity [6][14] - The launch of Welltower 3.0 emphasizes operations and technology, aiming to enhance customer experience and employee satisfaction [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning and the potential for significant growth and cash flow compounding over time [44] - The company is focused on aligning interests across its ecosystem to enhance long-term value creation [43] - Management acknowledged the uncertainty in the broader economy but highlighted the strength of their business model driven by needs-based and private pay nature [11] Other Important Information - Welltower's year-to-date transaction activity reached $33 billion, with $23 billion in incremental transactions reported [5][16] - The company announced the acquisition of the Barchester Senior Living portfolio for $5.2 billion, which is expected to be accretive to FFO per share in 2026 [9][20] - A new compensation plan was introduced to align management and operating partners' interests with shareholders [36] Q&A Session Summary Question: What is the goal behind the changes and how should growth be viewed? - Management clarified that the focus is on aligning interests across the ecosystem rather than proving anything, emphasizing the importance of duration in growth [43][44] Question: Was the new compensation plan presented as a team package? - The board spent significant time developing the plan, which aligns with the company's incentive design principles [48] Question: Why not issue equity for acquisitions instead of asset sales? - Management explained that the cost of equity was viewed as higher than the cost of asset sales, emphasizing long-term value creation over short-term gains [52][54] Question: How do the new care home deals compare to the current portfolio? - The new portfolios are similar in asset quality and private pay percentage, maintaining a consistent growth outlook [56] Question: How is execution risk managed for the announced changes? - Management highlighted the importance of a strong team with extensive transaction experience and a focus on attracting and retaining top talent to mitigate risks [76]

Financial Data and Key Metrics Changes - Welltower reported a net income attributable to common stockholders of $0.41 per diluted share and normalized funds from operations (FFO) of $1.34 per diluted share, representing a 20.7% year-over-year growth [22] - The total portfolio same-store net operating income (NOI) growth was 14.5% year-over-year [22] - Year-over-year organic revenue growth remained at approximately 10%, driven by a 400 basis point occupancy gain [11] Business Line Data and Key Metrics Changes - The senior housing portfolio achieved same-store NOI growth exceeding 20% for the 12th consecutive quarter [10] - In the UK portfolio, a 550 basis point year-over-year ramp in occupancy drove a 10.4% increase in revenue [11] - Operating margins across the same-store portfolio rose by 260 basis points, with growth in unit revenue (RevPor) outpacing unit expense (ExPor) [11] Market Data and Key Metrics Changes - The demand for senior housing is expected to grow stronger while supply remains dormant, indicating a favorable backdrop for growth in 2026 and beyond [12] - The company has expanded its year-to-date transaction activity by $23 billion, including $14 billion of acquisitions and $9 billion of dispositions and loan payoffs [15] Company Strategy and Development Direction - Welltower is transitioning to a pure-play rental housing platform for the aging population, focusing on technology-driven transformation [4] - The company is exiting the outpatient property management business to concentrate on senior living, enhancing operational excellence through digital transformation [5][12] - The launch of Welltower 3.0 emphasizes operations and technology first, aiming to delight customers and prioritize site-level employee satisfaction [28][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertainty in the broader economy but emphasizes the strength of their business model, which is needs-based and private pay [10] - The company is focused on aligning interests across the ecosystem to enhance long-term growth and cash flow compounding [42][43] - Management believes that disrupting the organization from within is essential to adapt to future market conditions and maintain competitive advantage [43] Other Important Information - Welltower's capital allocation decisions are viewed through an opportunity cost lens, evaluating the long-term implications of each decision [4] - The company has structured its recent transactions to retain significant profit interests while protecting downside risks [6][8] Q&A Session Summary Question: What is the goal behind the changes outlined, and how should growth be viewed from a cash flow standpoint? - Management clarified that they are not trying to prove anything but rather align interests across the ecosystem to enhance long-term growth and cash flow compounding [42][43] Question: Was the new compensation plan presented as an all-or-nothing proposal? - Management indicated that the board spent significant time developing the plan, which aligns with the five tenets of incentive design [47] Question: Why not issue equity to fund acquisitions instead of asset sales? - Management explained that the cost of equity was viewed as higher than the cost of capital from asset sales, emphasizing long-term value creation over short-term gains [49][51] Question: How do the new acquisitions compare to Welltower's current portfolio in terms of asset quality? - Management stated that the new acquisitions are similar in quality and metrics to the existing portfolio, maintaining a consistent growth outlook [54] Question: How does Welltower manage execution risk with the announced changes? - Management emphasized the importance of attracting and retaining top talent and building a vibrant culture to mitigate risks associated with operational changes [70][71]