PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Q2 2025 financial statements show revenue growth and improved operating cash flow, offset by a wider net loss and decreased total assets [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows a decrease in total assets and equity, alongside a slight reduction in total liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $251,888 | $308,925 | | Total current assets | $467,481 | $512,937 | | Total assets | $6,141,466 | $6,335,562 | | **Liabilities & Equity** | | | | Total current liabilities | $565,722 | $579,763 | | Long-term debt, less current portion | $4,232,238 | $4,022,008 | | Total liabilities | $6,034,686 | $6,121,657 | | Total equity | $106,780 | $213,905 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations for Q2 2025 show increased revenue but a widened net loss, with a substantial increase in net loss for the six-month period Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $812,944 | $777,541 | $1,626,808 | $1,560,372 | | Income (loss) from operations | $14,907 | $19,162 | $44,483 | $38,408 | | Net loss attributable to stockholders | $(43,024) | $(37,727) | $(108,003) | $(67,293) | | Basic and diluted net loss per share | $(0.18) | $(0.17) | $(0.46) | $(0.30) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements for H1 2025 show significantly improved operating cash flow, increased investing activities due to acquisitions, and a net decrease in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $106,966 | $54,524 | | Net cash provided by (used in) investing activities | $(377,154) | $(75,403) | | Net cash provided by (used in) financing activities | $213,910 | $33,715 | | **Net (decrease) in cash** | **$(56,278)** | **$12,836** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business operations, accounting policies, and financial position, including community portfolio, revenue sources, debt structure, and recent acquisitions - As of June 30, 2025, the company operates **645 senior living communities** across the U.S., with a majority (**382**) being owned properties[17](index=17&type=chunk) - **Private pay residents** are the primary source of revenue, accounting for **93.9% of resident fees** in the first half of 2025[30](index=30&type=chunk) - Total **long-term debt** stood at approximately **$4.3 billion** as of June 30, 2025, with **88.0% ($3.8 billion)** being non-recourse property-level mortgage financing[37](index=37&type=chunk)[38](index=38&type=chunk) - In February 2025, the company acquired **25 communities** from Diversified Healthcare Trust for **$135.0 million** and **5 communities** from Welltower Inc. for **$175.0 million**, all of which were previously leased[54](index=54&type=chunk)[56](index=56&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights improved operating performance and strategic portfolio adjustments, despite a widened net loss, with a focus on liquidity and debt management [Overview and Community Transactions](index=23&type=section&id=Overview%20and%20Community%20Transactions) This section provides an overview of the company's community portfolio and details recent strategic transactions, including acquisitions and lease amendments - In February 2025, the company acquired **25 communities** from Diversified Healthcare Trust for **$135.0 million** and **5 communities** from Welltower for **$175.0 million**[96](index=96&type=chunk)[97](index=97&type=chunk) - The master lease with Ventas was amended, resulting in the renewal of **65 community leases** and the planned transition or sale of the remaining **55 communities**, which are now excluded from the same-community portfolio[98](index=98&type=chunk) - The company plans to dispose of **12 owned communities** currently classified as held for sale within the next twelve months[100](index=100&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q2 2025 results show increased resident fees and Adjusted EBITDA, but a wider net loss due to higher expenses and a significant loss on debt extinguishment Q2 2025 vs Q2 2024 Summary Operating Results (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Resident fees | $775,614 | $739,709 | 4.9% | | Facility operating expense | $562,317 | $537,507 | 4.6% | | Net income (loss) | $(43,039) | $(37,742) | 14.0% | | Adjusted EBITDA | $117,050 | $97,816 | 19.7% | - The increase in Q2 resident fees was driven by a **4.8% rise in same-community RevPAR**, which resulted from a **2.4% increase in RevPOR** and a **190 basis point increase in weighted average occupancy**[106](index=106&type=chunk) - The net loss for the first six months of 2025 increased significantly, primarily due to a **$32.8 million loss on extinguishment of a financing obligation** from the reacquisition of three communities[130](index=130&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's liquidity position, improved Adjusted Free Cash Flow, significant debt levels, and projected capital expenditures - Total liquidity was **$350.0 million** as of June 30, 2025, including **$251.9 million** of unrestricted cash and **$98.1 million** of availability on the secured credit facility[163](index=163&type=chunk) Adjusted Free Cash Flow (in thousands) | Period | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Adjusted Free Cash Flow | $23,688 | $(31,813) | - The company projects full-year 2025 **non-development capital expenditures** to be between **$175.0 million and $180.0 million**, net of reimbursements[171](index=171&type=chunk) - As of June 30, 2025, the company had **$4.3 billion of debt outstanding** with a weighted average interest rate of **5.20%**, with **88.0%** being non-recourse property-level financing[161](index=161&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles key non-GAAP financial measures, including Adjusted EBITDA for operating performance and Adjusted Free Cash Flow for liquidity assessment Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Description | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net income (loss) | $(43,039) | $(108,032) | | Adjustments (Taxes, Interest, D&A, etc.) | $149,576 | $337,034 | | Other Adjustments (Impairment, Stock Comp, etc.) | $9,513 | $12,187 | | **Adjusted EBITDA** | **$117,050** | **$241,189** | [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on variable-rate debt, largely mitigated by hedges, with sensitivity analysis provided for SOFR changes - As of June 30, 2025, the company had **$1.2 billion of long-term variable rate debt**, with **92%** subject to interest rate cap or swap agreements[194](index=194&type=chunk)[195](index=195&type=chunk) Annual Interest Expense Increase from SOFR Increase (in millions) | Increase in SOFR (basis points) | Annual Interest Expense Increase | | :--- | :--- | | 100 | $3.6 | | 200 | $5.0 | | 500 | $8.9 | | 1,000 | $13.9 | [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, while a new ERP system implementation is causing ongoing changes to internal financial reporting controls - Management concluded that **disclosure controls and procedures were effective** as of the end of the quarter[199](index=199&type=chunk) - The company is implementing a new **ERP system**, leading to ongoing changes in its internal control over financial reporting[200](index=200&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings, including litigation and claims, is incorporated by reference from Note 8 of the financial statements - Information regarding legal proceedings is detailed in **Note 8** to the condensed consolidated financial statements[201](index=201&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor highlights potential business disruption and negative market perception due to the recent CEO departure and management transition - A new risk factor was added related to the transition of management following the departure of the President and CEO on **April 13, 2025**, which could harm the business[203](index=203&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company acquired shares to cover tax liabilities from vested restricted stock units, with $44.0 million remaining for repurchases Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Q2 2025 Total | 243,898 | $5.76 | - All shares purchased were withheld to satisfy **tax liabilities** on vested restricted stock units, not open market purchases under the public plan[208](index=208&type=chunk) - As of June 30, 2025, **$44.0 million** remained available for future purchases under the company's share repurchase program[208](index=208&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) This section discloses no Rule 10b5-1 trading arrangements and details the August 2025 amendment to the Tier I Severance Pay Policy for executive officers - On **August 5, 2025**, the company amended and restated its **Tier I Severance Pay Policy** for executive officers[207](index=207&type=chunk) - Key amendments to the severance policy include providing severance payments for termination with **\"good reason\"** equivalent to termination without **\"cause\"** and expanding the definition of **\"good reason\"** to include significant changes in reporting relationships[207](index=207&type=chunk)[210](index=210&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, and certifications - A list of all exhibits filed with the report is provided, including key agreements and certifications[211](index=211&type=chunk)

Financial Data and Key Metrics Changes - Brookdale reported a same community weighted average occupancy of 80.7%, an increase of 190 basis points year-over-year [5] - Adjusted EBITDA grew by 19.7% quarter-over-quarter and 23.4% for the first half of the year [6] - Adjusted free cash flow for the quarter was $20 million, compared to a negative $6 million in the same quarter last year [7][34] - Consolidated RevPAR increased by 5.1% year-over-year, driven by a 200 basis point increase in weighted average occupancy [27] Business Line Data and Key Metrics Changes - The same community RevPAR increased by 4.8% year-over-year, supported by a 190 basis point occupancy growth [31] - The occupancy band of communities with less than 70% occupancy decreased from 143 to 129, indicating operational improvements [10] - Communities with over 95% occupancy increased from 73 to 88, a 21% improvement [10] Market Data and Key Metrics Changes - The company experienced a sequential occupancy growth of 80 basis points, the strongest second quarter growth since 2022 [25] - Move-ins were 7% above the prior year and 9% above historic averages, indicating a positive trend in demand [28] Company Strategy and Development Direction - Brookdale's five-part strategy focuses on improving operating performance, optimizing the real estate portfolio, capital reinvestment, reducing leverage, and elevating quality for residents and associates [8][14][17][20] - The company plans to exit 55 leased assets by year-end to streamline its portfolio [14] - Capital reinvestment of $49 million was made in Q2, with over 500 capital-related projects underway [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued occupancy growth and improved financial performance, expecting the positive impact of occupancy results to be realized in the third quarter [29][41] - The company anticipates a negative adjusted EBITDA impact of approximately $2 million due to the timing of community transitions [38] Other Important Information - Brookdale's total liquidity increased to $350 million, a $44 million sequential increase [34] - The company is focused on enhancing the quality of care through the rollout of the Brookdale Health Plus program, which is expected to be in nearly 200 communities by year-end [86][88] Q&A Session Summary Question: What initiatives have been implemented to drive occupancy? - Management emphasized the focus on SWAT teams to drive profitable occupancy and accountability through daily operational meetings [45][46] Question: How should the balance between rate and occupancy be approached? - Management highlighted the importance of increasing occupancy in the less than 70% band to cover fixed costs, while maximizing pricing in higher occupancy bands [51][52] Question: What is the outlook for controllable move-outs? - Management noted improvements in the attrition rate and emphasized the importance of resident retention programs [63] Question: Can you elaborate on the softness in move-ins early in the quarter? - Management attributed the softness to macroeconomic uncertainty but noted a recovery in move-ins during May and June [71][72] Question: What are the drivers behind the improved cash flow? - Management indicated that improved operations were the primary driver of adjusted free cash flow, despite some working capital variability [75]

Brookdale Overview - Brookdale operates 645 senior living communities across 41 states[8] - The company has the capacity to serve approximately 58,000 residents[8] - 94% of senior living resident fees are private pay[8] Financial Performance and Guidance - Second quarter Adjusted Free Cash Flow improved by $25 million year-over-year, reaching $20 million[33] - The company anticipates portfolio ownership to increase to 75% by the end of 2025[20] - 2025 Adjusted EBITDA guidance increased by $5 million at the midpoint, with a range of $445 to $455 million[37, 36] - Adjusted Free Cash Flow for 2025 is projected to be between $30 to $50 million[36] Occupancy and RevPAR - Consolidated weighted average occupancy grew by 200 bps in the second quarter year-over-year[33] - July 2025 month-end consolidated occupancy reached 82.6%, marking eight consecutive months of acceleration[33] - The company expects RevPAR YOY Growth of 5.25% to 6.00% for 2025[36] Capital Structure - 72% of the company's debt is fixed rate debt[42] - 88% of the company's debt is non-recourse property-level mortgage financings[42]

Group 1 - Brookdale Senior Living reported a quarterly loss of $0.18 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.14, and compared to a loss of $0.17 per share a year ago, indicating an earnings surprise of -28.57% [1] - The company posted revenues of $812.94 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.64%, and this represents an increase from year-ago revenues of $777.54 million [2] - Brookdale shares have increased approximately 56.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.1% [3] Group 2 - The earnings outlook for Brookdale is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend for estimate revisions ahead of the earnings release was favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.20 on revenues of $823.17 million, and for the current fiscal year, it is -$0.82 on revenues of $3.19 billion [7] Group 3 - The outlook for the Medical - Nursing Homes industry, to which Brookdale belongs, is currently strong, ranking in the top 7% of over 250 Zacks industries, indicating that stocks in the top 50% of Zacks-ranked industries tend to outperform those in the bottom 50% by more than 2 to 1 [8]

[Form 8-K Filing](index=1&type=section&id=Form%208-K%20Filing) [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) The company announced June 2025 occupancy and Q2 2025 financial information via a furnished press release, exempt from Section 18 liability - The company issued a press release on **July 8, 2025**, announcing its consolidated occupancy for **June 2025** and other information for the **second quarter of 2025**[8](index=8&type=chunk) - The information in the press release is furnished, not filed, exempting it from **Section 18 liabilities** of the Securities Exchange Act of 1934[9](index=9&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) Information from Item 2.02 is incorporated by reference to satisfy Regulation Fair Disclosure requirements - Information from **Item 2.02** is incorporated by reference to comply with **Regulation FD**[10](index=10&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K filing, with the press release as a key exhibit List of Exhibits | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press Release dated July 8, 2025 | | 104 | Cover Page interactive Data File (embedded within the Inline XBRL document) |

Core Insights - Brookdale Senior Living Inc. reported improved financial results for the second quarter of 2025, with a significant increase in occupancy rates and revenue, leading to raised annual guidance for the second consecutive quarter [2][8][11] Financial Performance - Resident fees for Q2 2025 reached $775.6 million, up from $739.7 million in Q2 2024, reflecting a 4.9% increase [3] - Facility operating expenses increased to $562.3 million from $537.5 million, a rise of 4.6% [3] - General and administrative expenses rose significantly by 17.8% to $55.0 million, primarily due to restructuring costs [3][9] - Adjusted EBITDA for Q2 2025 was $117.1 million, compared to $97.8 million in Q2 2024, marking a 19.7% increase [3][30] - The company reported a net loss of $43.0 million for Q2 2025, compared to a loss of $37.7 million in Q2 2024 [3][21] Occupancy and Revenue Metrics - The weighted average occupancy rate improved to 80.1% in Q2 2025, up 200 basis points from 78.1% in Q2 2024 [3][5] - RevPAR (Revenue per Available Room) increased to $5,080 from $4,835, reflecting a significant rise [3] - RevPOR (Revenue per Occupied Room) also saw an increase to $6,343 from $6,193 [3] Cash Flow and Liquidity - Net cash provided by operating activities improved to $83.6 million in Q2 2025, up from $55.7 million in Q2 2024 [7][10] - Adjusted Free Cash Flow for Q2 2025 was $19.9 million, a substantial increase from a negative $5.5 million in Q2 2024 [7][31] - Total liquidity as of June 30, 2025, was $350.0 million, which included $251.9 million in unrestricted cash [10] Outlook - The company has revised its full-year 2025 guidance for RevPAR growth to a range of 5.25% to 6.00%, up from the previous range of 5.00% to 5.75% [8][11] - Adjusted EBITDA guidance for the full year 2025 has been raised to a range of $445 million to $455 million [8][11]

Core Viewpoint - Brookdale Senior Living Inc. is set to release its second quarter 2025 financial results on August 6, 2025, followed by a conference call on August 7, 2025, to discuss the results [1][2]. Financial Results Announcement - The financial results for the second quarter of 2025 will be released after market close on August 6, 2025 [1]. - A conference call to discuss these results is scheduled for August 7, 2025, at 9:00 a.m. (ET) [2]. Conference Call Details - The conference call can be accessed within the U.S. at +1 (800) 715-9871 and outside the U.S. at +1 (646) 307-1963, with Conference ID: 1482282 [2]. - A webcast of the conference call will be available for public listening [2]. Replay Information - For those unable to attend the live call, a replay will be available until August 14, 2025, at 11:59 p.m. (ET) [3]. - The replay can be accessed by dialing +1 (800) 770-2030 within the U.S. & Canada or +1 (609) 800-9909 from other locations, using Playback ID: 1482282 [3]. Company Overview - Brookdale Senior Living Inc. operates 645 senior living communities across 41 states, serving approximately 58,000 residents as of June 30, 2025 [4]. - The company offers various living arrangements, including independent living, assisted living, memory care, and continuing care retirement communities [4]. - Brookdale is focused on enriching the lives of seniors through compassionate care and exceptional service, guided by its core values of passion, courage, partnership, and trust [4].

Core Viewpoint - Brookdale Senior Living Inc. successfully elected all eight of its director nominees during the 2025 Annual Meeting of Stockholders, reflecting strong shareholder support for the company's strategy and leadership [1][2]. Company Overview - Brookdale operates 645 senior living communities across 41 states, serving approximately 58,000 residents as of June 30, 2025 [4]. - The company focuses on enriching the lives of seniors through compassionate care, clinical expertise, and exceptional service, offering independent living, assisted living, memory care, and continuing care retirement communities [4]. Board of Directors - The newly elected Board of Directors includes Jordan Asher, MD, Claudia Drayton, Mark Fioravanti, Victoria Freed, Joshua Hausman, Elizabeth Mace, Denise Warren, and Lee Wielansky [1]. Shareholder Engagement - The company expressed gratitude to shareholders for their confidence in the Board and its strategy aimed at creating shareholder value, emphasizing the importance of executing five key initiatives [2]. Strategic Focus - Brookdale's five key initiatives include improving operating performance, optimizing the real estate portfolio, reinvesting capital into communities, reducing leverage, and ensuring high-quality environments for residents and associates [2]. - The company is optimistic about its position to capitalize on demographic and industry trends that favor growth [2]. Annual Meeting Results - Preliminary results indicated that shareholders approved all other proposals submitted for a vote at the Annual Meeting, with final results to be reported in a Form 8-K [3].

Core Insights - Brookdale Senior Living Inc. (BKD) reported a significant improvement in its weighted average occupancy, which rose by 230 basis points year over year to 80.5% in June 2025, reflecting strong move-ins and favorable move-out activity [1][8] - The consolidated occupancy at the end of June was 82.2%, an increase of 70 basis points sequentially, driven by sustained demand and effective sales execution [2] - The same community occupancy also showed positive trends, with a year-over-year increase of 220 basis points to 81.1% and a sequential rise of 50 basis points [2] Occupancy and Revenue Impact - The increase in occupancy rates indicates rising patient volumes, which is beneficial for Brookdale as its primary revenue source relies on the patient base [4] - Elevated occupancy levels are expected to enhance resident fee revenues, which constituted nearly 96% of the company's total revenues in the first quarter of 2025 [6] - Projected adjusted EBITDA for 2025 is estimated to be between $440 million and $450 million, supported by the anticipated growth in resident fees [6] Company Scale and Operations - As of June 30, 2025, Brookdale operated and managed 645 senior living communities across 41 U.S. states, with the capacity to serve approximately 58,000 residents [5][8] - The company's expansive scale, clinical expertise, and enhanced service offerings position it well to cater to the growing elderly population in the United States [5] Stock Performance - Year-to-date, Brookdale's shares have increased by 38.8%, significantly outperforming the industry average growth of 2.5% [7]

Core Viewpoint - Brookdale Senior Living Inc. is urging shareholders to vote for its nominated directors, emphasizing that the current board's strategy is effectively driving shareholder value and operational momentum [1][3][11]. Financial Performance - In June, Brookdale achieved an 81.1% same community weighted average occupancy, with a month-end occupancy of 82.8%, indicating strong demand and sales execution [2]. - The second quarter weighted average consolidated occupancy was 80.1%, marking a significant milestone for cash flow growth [2]. - Since 2022, Brookdale has renegotiated leases for approximately 250 communities and reduced the number of leased units by 19% since Q1 2021, with plans to decrease its community portfolio to less than 600 by year-end 2025 from over 1,000 in 2017 [7]. Board Composition and Strategy - Brookdale's board consists of eight highly qualified directors, seven of whom are independent, with an average tenure of less than four years, ensuring a mix of skills critical for the company's growth [5][4]. - The board is actively engaged in a CEO search process, supported by an independent search firm, to find a candidate with the necessary experience in senior living, healthcare, hospitality, and real estate [6]. Shareholder Engagement - The company has made efforts to engage with Ortelius Advisors to avoid a proxy contest, but Ortelius has not engaged constructively [10]. - Brookdale emphasizes the importance of every shareholder vote and urges them to disregard any opposing proxy cards from Ortelius [12][11]. Competitive Positioning - Brookdale's operational improvements and strategic initiatives have positioned it to outperform peers in key metrics such as consolidated RevPAR, operating income per available unit, and adjusted EBITDA margin compared to 2019 [7]. - The company highlights that Ortelius lacks understanding of its business model and has proposed a flawed plan that could jeopardize Brookdale's progress [3][8].