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]

Financial Data and Key Metrics Changes - For the full year 2025, Brookdale achieved a RevPAR growth of 5.7%, exceeding the initial guidance of 4.75%-5.75% [6][25] - Adjusted EBITDA for 2025 was reported at $458 million, marking a 19% increase year-over-year and surpassing the midpoint of the final guidance [9][29] - Adjusted Free Cash Flow for 2025 was $23 million, the first positive cash flow since 2020, although it fell short of the guidance of $30 million-$50 million due to timing issues [10][39] Business Line Data and Key Metrics Changes - The fourth quarter occupancy rate reached a weighted average of 82.5%, a 310 basis point improvement year-over-year, and 83.5% on a same-community basis [6][32] - Communities with occupancy below 70% decreased from 23% in Q1 2025 to 15% in Q4 2025, while those exceeding 90% occupancy increased from 25% to 34% [8][9] Market Data and Key Metrics Changes - The demand for senior living is expected to grow significantly as the first baby boomers turn 80 in 2026, with a projected 4%+ annual growth in the population aged 80 and above [20][22] - The supply growth of senior housing was only 0.6% at the end of 2025, indicating a strong trend toward increasing occupancy in the industry [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 [10][12] - The company plans to reduce its consolidated portfolio to 517 communities by mid-2026, focusing on those with the strongest long-term value creation potential [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the robust demand outlook for senior living, driven by demographic trends and a stagnating supply of units [20][22] - For 2026, Brookdale projects RevPAR growth of 8%-9% and Adjusted EBITDA growth to between $502 million and $516 million, indicating a continuation of positive trends [22][41] Other Important Information - The company has implemented a new regional operating structure with six distinct leadership teams to enhance operational efficiency [11][12] - Brookdale's Net Promoter Score (NPS) has improved significantly, indicating better service delivery quality and resident satisfaction [18] Q&A Session Summary Question: Progress on transitioning to an operating company - Management highlighted the establishment of a dedicated COO and regional teams to enhance operational focus and performance [50][51] Question: Expected progress on Health Plus - Health Plus was rolled out in 58 additional communities in 2025, with plans to fill gaps in markets and improve resident retention [56][58] Question: Centralized pricing strategy and rent increases - In-place rate increases for 2026 are expected to be in the high single digits, with attrition rates remaining favorable [63][65] Question: CapEx plans and project details - Non-development CapEx is projected to increase, focusing on high-impact projects that drive occupancy and NOI [66][68] Question: Occupancy bands and earnings potential - Management is focusing efforts on communities in the 70%-80% occupancy band to drive them above 80%, which is crucial for profitability [75][77]

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]