Financial Data and Key Metrics Changes - Brookdale achieved a RevPAR growth of 5.7% for 2025, finishing at the top end of the initial guidance of 4.75%-5.75% [7] - Adjusted EBITDA for 2025 was reported at $458 million, exceeding the midpoint of the guidance range of $430 million-$445 million [10][26] - Adjusted Free Cash Flow for 2025 was $23 million, marking the first positive cash flow since 2020, although it fell short of the guidance of $30 million-$50 million due to timing issues [11][26][38] Business Line Data and Key Metrics Changes - Consolidated fourth quarter occupancy reached a weighted average of 82.5%, a 310 basis point improvement year-over-year [8][30] - The percentage of communities with occupancy below 70% decreased from 23% in Q1 2025 to 15% in Q4 2025 [9] - Communities exceeding 90% occupancy increased from 25% in Q1 2025 to 34% in Q4 2025 [9] Market Data and Key Metrics Changes - The senior housing supply growth was reported at a historical low of 0.6% at the end of 2025, while the population of Americans aged 80 and above is expected to grow at a compounded annual rate of over 4% for the next decade [22] - The demand outlook for senior living is robust, particularly as the first baby boomers turn 80 in 2026, which is a critical age for Brookdale's move-ins [21][22] Company Strategy and Development Direction - Brookdale's strategic priorities include excelling operationally, optimizing the real estate portfolio, reinvesting capital, reducing leverage, and elevating quality for residents and associates [11][12] - The company plans to reduce its consolidated portfolio to 517 communities by mid-2026, focusing on communities with the strongest long-term value creation potential [14][15] - Capital investment for 2026 is projected to be between $175 million and $195 million, aimed at enhancing occupancy growth and community-level NOI [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the intrinsic value of the company, emphasizing the importance of specialized real estate and the ability to serve seniors effectively [24] - The outlook for 2026 includes projected RevPAR growth of 8%-9% and Adjusted EBITDA growth to between $502 million and $516 million, driven by occupancy and pricing improvements [40][41] - Management highlighted the importance of maintaining a stable labor cost environment and reducing leverage to below 6x by the end of 2028 [44] Other Important Information - The company has implemented a new regional operating structure with six distinct leadership teams to enhance operational efficiency [12] - The Net Promoter Score (NPS) has improved significantly, indicating better service delivery quality and resident satisfaction [18] Q&A Session Summary Question: Progress on transition to an operating company - Management discussed the establishment of a dedicated COO and regional teams to enhance operational focus and performance [49][50] Question: Expected progress on Health Plus - Health Plus was rolled out in 58 additional communities in 2025, with plans to fill market gaps and improve resident retention [55][57] Question: Centralized pricing strategy and rent increases - In-place rent increases for 2026 are expected to be in the high single digits, with favorable attrition rates observed [62][64] Question: CapEx plans and project details - Future capital expenditures will focus on high-impact projects, with ongoing reinvestment in real estate to maintain property value [66][68] Question: Occupancy bands and earnings potential - Management acknowledged the importance of improving occupancy in the 70%-80% band, with efforts focused on enhancing performance in that segment [75]

Brookdale Senior Living (NYSE:BKD) Q4 2025 Earnings call February 19, 2026 09:00 AM ET Speaker9Good morning. My name is Jordan, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Brookdale Senior Living Fourth Quarter 2025 Earnings Call. Today's conference call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. At this time, I would now like to turn the c ...

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]