Financial Data and Key Metrics Changes - For the full year 2025, Brookdale achieved RevPAR growth of 5.7%, exceeding the initial guidance of 4.75%-5.75% [7] - Adjusted EBITDA for 2025 was reported at $458 million, a 19% increase year-over-year, surpassing the midpoint of the guidance range [10][29] - 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] Business Line Data and Key Metrics Changes - Consolidated fourth quarter occupancy reached a weighted average of 82.5%, representing a 310 basis point improvement year-over-year [8] - 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 demand for senior living is expected to grow significantly as the first baby boomers turn 80 in 2026, with a projected 4%+ compounded annual growth rate for the 80+ population over the next decade [22] - Senior housing supply growth was reported at just 0.6% at the end of 2025, indicating a historical low [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] - 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] - 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 robust demand outlook for senior living, driven by demographic trends and a stagnating supply of units [22] - For 2026, Brookdale is projecting RevPAR growth of 8%-9% and Adjusted EBITDA growth to between $502 million and $516 million, indicating a continuation of mid-teens growth through 2028 [23][40] - The company aims to drive leverage below 6x by the end of 2028, primarily through Adjusted EBITDA expansion [17][44] Other Important Information - The company has implemented a new regional operating structure with six leadership teams to enhance operational efficiency [12] - The introduction of the HealthPlus platform has expanded to 58 additional communities, improving resident retention and reducing hospital visits [19][57] 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] Question: Expected progress on HealthPlus - HealthPlus has been rolled out in additional communities, with positive impacts on resident retention and reduced hospital visits [57] Question: Centralized pricing strategy and rent increases - In-place rent increases for 2026 are aligned with high single digits, with favorable attrition rates observed [62][64] Question: CapEx plans and project details - Future CapEx 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 is focusing efforts on communities in the 70%-80% occupancy range to drive earnings growth [75]

Summary of Brookdale Senior Living Conference Call Company Overview - **Company**: Brookdale Senior Living (NYSE: BKD) - **Industry**: Senior Housing Facilities - **Position**: Largest operator of senior housing facilities in the United States - **Current Status**: Transitioning from challenges faced during COVID-19, with a focus on improving occupancy and financial performance [1][4][6] Key Points and Arguments Occupancy and Financial Performance - **Occupancy Rate**: Achieved an average occupancy of 80% in Q2 2025, which is critical for covering fixed costs in a high fixed cost business [4][5] - **Future Expectations**: Aiming to return to pre-pandemic occupancy levels of 89%, with August occupancy reported at 81.5% [14][9] - **Revenue Growth**: Adjusted EBITDA growth has improved leverage, translating into increased shareholder value [5][14] Market Dynamics - **Supply and Demand**: Favorable market conditions with a decrease in new construction since 2017 and an expected increase of one million baby boomers turning 80 each year through 2026 [6][48] - **Community Portfolio**: Rationalizing the community portfolio from over 1,100 to an expected 550 by mid-2026 to optimize operations [7][8] Strategic Initiatives - **Brookdale HealthPlus Program**: A care coordination initiative that has shown significant positive outcomes, including an 80% reduction in urgent care visits and a 66% reduction in hospitalizations [10][11] - **Investment in Communities**: Ongoing CapEx investments to enhance community appeal and competitiveness, including a $5 million First Impressions program [31][32] Pricing and Revenue Management - **Pricing Strategy**: Dynamic pricing strategies based on occupancy levels, with a focus on filling lower-occupied communities while managing rates in higher-occupied ones [17][19] - **Revenue Per Occupied Room (RevPOR)**: Year-to-date RevPOR growth of 2.6% against expense growth of 2%, indicating effective cost management [19][20] Financial Health and Deleveraging - **Debt Management**: No debt maturities until June 2026, with a focus on reducing leverage from nearly 20 times to a target of low nine times [5][34][35] - **Cash Flow**: Positive cash flow reported in Q1 and Q2 2025, with expectations for continued improvement as occupancy grows [5][48] Marketing and Resident Engagement - **Marketing Strategy**: Shift from reliance on third-party referrals to internal marketing efforts, with a focus on enhancing resident experience to improve retention [42][46] - **Net Promoter Score**: Continuous improvement in resident and family satisfaction metrics, indicating successful engagement strategies [46] Additional Important Insights - **Long-term Outlook**: The company is positioned for durable, sustainable growth due to favorable macroeconomic conditions and a strong focus on operational efficiency [47][48] - **Community Ownership Strategy**: Transitioning from leased to owned properties to reduce financing costs and enhance cash flow [29][30] This summary encapsulates the key insights and strategic directions discussed during the Brookdale Senior Living conference call, highlighting the company's recovery trajectory, market positioning, and future growth potential.