What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-07 compared with 2025-08-07 · 109 added, 82 removed, 493 unchanged (28% of the section changed)

3 unchanged sentences

(In thousands, except stock amounts)

September 30,

2025 December 31,

14 unchanged sentences

Total assets $ 6,012,708 $ 6,335,562

Liabilities and Equity

Liabilities and Equity (Deficit)

Current liabilities

12 unchanged sentences

Total liabilities 6,018,050 6,121,657

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at June 30, 2025 and December 31, 2024;

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at September 30, 2025 and December 31, 2024;

no shares issued and outstanding

Common stock, $ 0.01 par value, 400,000,000 shares authorized at June 30, 2025 and December 31, 2024;

Common stock, $ 0.01 par value, 400,000,000 shares authorized at September 30, 2025 and December 31, 2024;

248,053,116 and 210,547,351 shares issued and 237,525,591 and 200,019,826 shares outstanding (including 28,929 and 27,972 unvested restricted shares), respectively

1 unchanged sentence

Treasury stock, at cost;

10,527,525 shares at June 30, 2025 and December 31, 2024

10,527,525 shares at September 30, 2025 and December 31, 2024

( 102,774 ) ( 102,774 )

1 unchanged sentence

Total Brookdale Senior Living Inc.

stockholders' equity 105,379 212,475

stockholders' equity (deficit) ( 6,731 ) 212,475

Noncontrolling interest 1,389 1,430

Total equity 106,780 213,905

Total liabilities and equity $ 6,141,466 $ 6,335,562

Total equity (deficit) ( 5,342 ) 213,905

Total liabilities and equity (deficit) $ 6,012,708 $ 6,335,562

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

11 unchanged sentences

Loss (gain) on sale of communities, net ( 139 ) — ( 182 ) —

Loss (gain) on facility operating lease termination, net 4,480 — 4,480 —

Costs incurred on behalf of managed communities 35,327 37,762 103,824 108,950

20 unchanged sentences

BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(Unaudited, in thousands)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Total equity, balance at beginning of period $ 148,135 $ 375,448 $ 213,905 $ 405,153

Total equity (deficit), balance at beginning of period $ 106,780 $ 341,673 $ 213,905 $ 405,153

Common stock:

24 unchanged sentences

Balance at end of period $ 1,389 $ 1,445 $ 1,389 $ 1,445

Total equity, balance at end of period $ 106,780 $ 341,673 $ 106,780 $ 341,673

Total equity (deficit), balance at end of period $ ( 5,342 ) $ 294,322 $ ( 5,342 ) $ 294,322

Common stock share activity

10 unchanged sentences

(Unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

8 unchanged sentences

Loss (gain) on sale of assets, net ( 182 ) ( 923 )

Loss (gain) on facility operating lease termination, net 4,480 —

Non-cash stock-based compensation expense 9,701 10,651

38 unchanged sentences

The Company's senior living communities and its comprehensive network help to provide seniors with care, connection, and services in an environment that feels like home.

As of June 30, 2025, the Company owned 382 communities, representing a majority of the Company's community portfolio, leased 235 communities, and managed 28 communities.

As of September 30, 2025, the Company owned 372 communities, representing a majority of the Company's community portfolio, leased 221 communities, and managed 30 communities.

Summary of Significant Accounting Policies

23 unchanged sentences

The Company considers the credit risk of its counterparties when evaluating the fair value of its derivatives.

The following table summarizes the Company's Secured Overnight Financing Rate ("SOFR") interest rate cap instruments as of June 30, 2025.

The following table summarizes the Company's Secured Overnight Financing Rate ("SOFR") interest rate cap instruments as of September 30, 2025.

($ in millions)

4 unchanged sentences

As of December 31, 2024, the estimated fair value of the SOFR interest rate cap instruments was $ 4.1 million included in other assets, net.

The following table summarizes the Company's SOFR interest rate swap instrument as of June 30, 2025.

The following table summarizes the Company's SOFR interest rate swap instrument as of September 30, 2025.

($ in millions)

1 unchanged sentence

Fixed interest rate 4.06 %

Remaining term 1.3 years

Remaining term 1.0 year

Estimated fair value (included in other liabilities) $ ( 1.1 )

As of December 31, 2024, the estimated fair value of the SOFR interest rate swap instrument was $( 0.1 ) million included in other liabilities, net.

Property, Plant and Equipment and Leasehold Intangibles

During the three and nine months ended September 30, 2025 and 2024, the Company evaluated property, plant and equipment and leasehold intangibles for impairment and identified properties with a carrying value of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets primarily due to an expectation that certain underperforming communities will be disposed of resulting in a change in their intended holding periods.

As a result of this change in intent, the Company compared the estimated fair value of the assets to their carrying value for these identified properties and recorded an impairment charge for the excess of carrying value over estimated fair value.

The estimates of fair values of the property, plant and equipment of these communities were determined based on valuations provided by third-party pricing services and are classified within Level 3 of the valuation hierarchy.

The Company recorded property, plant and equipment and leasehold intangibles non-cash impairment charges in its operating results of $ 62.7 million and $ 65.1 million for the three and nine months ended September 30, 2025, respectively.

Long-term debt

1 unchanged sentence

The Company estimates the fair value of its convertible senior notes based on valuations provided by third-party pricing services.

The Company had outstanding long-term debt with a carrying amount of approximately $ 4.3 billion and $ 4.1 billion as of June 30, 2025 and December 31, 2024, respectively.

Fair value of the long-term debt is approximately $ 4.2 billion and $ 3.8 billion as of June 30, 2025 and December 31, 2024, respectively.

The Company had outstanding long-term debt with a carrying amount of approximately $ 4.3 billion and $ 4.1 billion as of September 30, 2025 and December 31, 2024, respectively.

Fair value of the long-term debt is approximately $ 4.3 billion and $ 3.8 billion as of September 30, 2025 and December 31, 2024, respectively.

The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy.

Resident fee revenue by payor source is as follows.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

8 unchanged sentences

Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied.

The Company had total deferred revenue (included within refundable fees and deferred revenue within the condensed consolidated balance sheets) of $ 54.8 million and $ 53.8 million, including $ 29.1 million and $ 29.4 million of monthly resident fees billed and received in advance, as of June 30, 2025 and December 31, 2024, respectively.

For the six months ended June 30, 2025 and 2024, the Company recognized $ 48.4 million and $ 42.8 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2025 and 2024, respectively.

The Company had total deferred revenue (included within refundable fees and deferred revenue within the condensed consolidated balance sheets) of $ 49.0 million and $ 53.8 million, including $ 24.1 million and $ 29.4 million of monthly resident fees billed and received in advance, as of September 30, 2025 and December 31, 2024, respectively.

For the nine months ended September 30, 2025 and 2024, the Company recognized $ 52.8 million and $ 47.0 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2025 and 2024, respectively.

Property, Plant and Equipment and Leasehold Intangibles, Net

As of June 30, 2025 and December 31, 2024, net property, plant and equipment and leasehold intangibles consisted of the following.

(in thousands) June 30, 2025 December 31, 2024

As of September 30, 2025 and December 31, 2024, net property, plant and equipment and leasehold intangibles consisted of the following.

(in thousands) September 30, 2025 December 31, 2024

Land $ 550,589 $ 532,719

8 unchanged sentences

Long-lived assets with definite useful lives are depreciated or amortized on a straight-line basis over their estimated useful lives (or, in certain cases, the shorter of their estimated useful lives or the lease term) and are tested for impairment whenever indicators of impairment arise.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 92.9 million and $ 88.0 million for the three months ended June 30, 2025 and 2024, respectively, and $ 183.8 million and $ 174.2 million for the six months ended June 30, 2025 and 2024, respectively.

The Company recognized $ 0.6 million for the three months ended June 30, 2025 of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets and did no t recognize any impairment charges for the three months ended June 30, 2024.

The Company recognized $ 2.4 million and $ 1.7 million for the six months ended June 30, 2025 and 2024, respectively, of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets.

As of June 30, 2025, 12 communities in the Assisted Living and Memory Care segment were classified as held for sale, resulting in $ 9.7 million of net property, plant and equipment and leasehold intangibles assets being recognized as assets held for sale within the condensed consolidated balance sheet.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 94.8 million and $ 90.1 million for the three months ended September 30, 2025 and 2024, respectively, and $ 278.6 million and $ 264.2 million for the nine months ended September 30, 2025 and 2024, respectively.

The Company recognized $ 62.7 million and $ 65.1 million for the three and nine months ended September 30, 2025, respectively, of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets primarily due to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods.

The Company recognized $ 0.9 million and $ 2.6 million for the three and nine months ended

September 30, 2024, respectively, of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets primarily due to property damage sustained at certain communities.

As of September 30, 2025, four communities in the Assisted Living and Memory Care segment and two communities in the CCRCs segment were classified as held for sale, resulting in $ 68.8 million of net property, plant and equipment and leasehold intangibles assets being recognized as assets held for sale within the condensed consolidated balance sheet.

The closings of the sales of the communities are subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals.

1 unchanged sentence

Long-term debt consists of the following.

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Fixed rate mortgage notes payable due 2026 through 2047;

weighted average interest rate of 4.74 % and 4.65 % as of June 30, 2025 and December 31, 2024, respectively

weighted average interest rate of 4.74 % and 4.65 % as of September 30, 2025 and December 31, 2024, respectively

$ 2,698,526 $ 2,599,028

Variable rate mortgage notes payable due 2026 through 2030;

weighted average interest rate of 6.77 % and 6.89 % as of June 30, 2025 and December 31, 2024, respectively

weighted average interest rate of 6.71 % and 6.89 % as of September 30, 2025 and December 31, 2024, respectively

1,208,546 1,110,642

Convertible notes payable due October 2026;

interest rate of 2.00 % as of both June 30, 2025 and December 31, 2024

interest rate of 2.00 % as of both September 30, 2025 and December 31, 2024

23,297 23,297

Convertible notes payable due October 2029;

interest rate of 3.50 % as of both June 30, 2025 and December 31, 2024

interest rate of 3.50 % as of both September 30, 2025 and December 31, 2024

369,445 369,445

Tangible equity units senior amortizing notes due 2025;

interest rate of 10.25 % as of both June 30, 2025 and December 31, 2024

interest rate of 10.25 % as of both September 30, 2025 and December 31, 2024

Notes payable for insurance premium financing due 2025;

interest rate of 6.16 % as of June 30, 2025

interest rate of 6.16 % as of September 30, 2025

Deferred financing costs, net ( 42,738 ) ( 49,074 )

2 unchanged sentences

Total long-term debt, less current portion $ 4,159,357 $ 4,022,008

As of June 30, 2025, the long-term debt, less current portion within the Company's condensed consolidated balance sheet includes $ 98.9 million of mortgage debt scheduled to mature in January 2026 for which the Company has the unilateral option to extend the maturity for one year subject to the satisfaction of certain conditions.

As of June 30, 2025, 88.0 %, or $ 3.8 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

As of June 30, 2025, $ 1.9 million of letters of credit and no cash borrowings were outstanding under the Company's $ 100.0 million secured credit facility.

The Company also had separate letter of credit facilities providing up to $ 85.0 million of letters of credit as of June 30, 2025 under which $ 68.9 million had been issued as of that date.

As of September 30, 2025, the current portion of long-term debt within the Company's condensed consolidated financial statements includes $ 36.0 million of mortgage notes payable secured by assets held for sale.

As of September 30, 2025, the long-term debt, less current portion within the Company's condensed consolidated balance sheet includes $ 98.8 million of mortgage debt scheduled to mature in January 2026 for which the Company has the unilateral option to extend the maturity for one year subject to the satisfaction of certain conditions.

As of September 30, 2025, 88.1 %, or $ 3.8 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

As of September 30, 2025, $ 1.9 million of letters of credit and no cash borrowings were outstanding under the Company's $ 100.0 million secured credit facility.

The Company also had separate letter of credit facilities providing up to $ 85.0 million of letters of credit as of September 30, 2025 under which $ 68.9 million had been issued as of that date.

2025 Mortgage Financings

9 unchanged sentences

The Company's failure to comply with applicable covenants, subject to cure provisions in certain instances, could constitute an event of default under the applicable debt documents.

Many of the Company's debt documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including

documents with other lenders and lessors).

Many of the Company's debt documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors).

Furthermore, the Company's mortgage debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of June 30, 2025, the Company is in compliance with the financial covenants of its debt agreements.

As of June 30, 2025, the Company operated 235 communities under long-term leases ( 226 operating leases and 9 financing leases).

As of September 30, 2025, the Company is in compliance with the financial covenants of its debt agreements.

As of September 30, 2025, the Company operated 221 communities under long-term leases ( 212 operating leases and 9 financing leases).

The substantial majority of the Company's lease arrangements are structured as master leases.

11 unchanged sentences

Furthermore, the Company's leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of June 30, 2025, the Company is in compliance with the financial covenants of its long-term lease agreements.

As of September 30, 2025, the Company is in compliance with the financial covenants of its long-term lease agreements.

Lease right-of-use assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company did not recognize any such impairment charges for the three and six months ended June 30, 2025 and 2024.

The Company did not recognize any such impairment charges for the three and nine months ended September 30, 2025 and 2024.

A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and net cash outflows from leases is as follows.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Operating Leases (in thousands)

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Financing Leases (in thousands)

8 unchanged sentences

Total net cash outflows from financing leases $ 2,033 $ 5,335 $ 9,964 $ 16,033

The aggregate amounts of future minimum lease payments (without giving effect to the potential early termination by Ventas, Inc.

("Ventas") of certain of the Company's community leases with maturity dates of December 31, 2025), including community, office, and equipment leases, recognized on the condensed consolidated balance sheet as of June 30, 2025 are as follows (in millions).

The aggregate amounts of future minimum lease payments (without giving effect to the early termination by Ventas, Inc.

Year Ending December 31, Operating Leases Financing Leases

2025 (six months) $ 116.7 $ 3.6

2025 (three months) $ 57.1 $ 1.8

2026 183.5 7.2

10 unchanged sentences

Effective February 27, 2025, the Company successfully closed the acquisition.

The Company funded the acquisition of the 25 communities through proceeds from mortgage financings and cash on hand.

The Company funded the acquisition of the 25 communities through proceeds

from mortgage financings and cash on hand.

Refer to Note 6 for information on the mortgage financing.

14 unchanged sentences

Certain claims and lawsuits allege large damage amounts, seek injunctive relief, and may require (and have required) significant costs to defend and resolve.

The Company continues to vigorously defend against the putative class action cases.

Based on the information that has been received as of the date hereof related to certain pending putative class action litigation discussed above, the Company recorded $ 7.0 million in litigation expense for the three months ended December 31, 2024, representing its current estimate of the Company’s ultimate cost to resolve such litigation, net of estimated probable insurance recoveries.

The final outcome of the litigation is dependent on many factors that are difficult to predict.

Accordingly the Company’s ultimate cost related to this matter may be materially different than the amount of the Company’s current estimate and accruals.

The Company recorded $ 7.0 million in litigation expense for the three months ended December 31, 2024, representing its estimate of the Company’s ultimate cost to resolve such litigation, net of estimated probable insurance recoveries.

The final outcome of the pending class action litigation is dependent on many factors that are difficult to predict.

Accordingly the Company’s ultimate cost related to these matters may be materially different than the amount of the Company’s current estimate and accruals.

The Company continues to vigorously defend against the pending putative class action cases.

The Company maintains general liability, professional liability, excess liability, and other insurance policies in amounts and with coverage and deductibles the Company believes are appropriate, based on the nature and risks of its business, historical experience, availability, and industry standards.

20 unchanged sentences

On July 9, 2025, the court approved a settlement of the Templin Action and entered a judgment dismissing the case with prejudice.

The appeal in the Davis Action was stayed pending the completion of the settlement approval proceedings in the Templin Action;

the parties informed the Sixth Circuit that they anticipate moving to dismiss the appeal as moot in light of the settlement of the Templin Action.

The appeal in the Davis Action was stayed pending the completion of the settlement approval proceedings in the Templin Action, and on August 12, 2025, the Sixth Circuit granted the motion to dismiss the appeal as moot in light of the settlement of the Templin Action.

Stock-Based Compensation

3 unchanged sentences

Three months ended June 30, 2025 175 $ 6.29 $ 1,100

Three months ended September 30, 2025 13 $ 7.75 $ 100

Earnings Per Share

Potentially dilutive common stock equivalents for the Company include convertible senior notes, unvested restricted stock, and restricted stock units.

Prior to June 30, 2025, the potentially dilutive common stock equivalents for the Company also included warrants and prepaid stock purchase contracts.

As of June 30, 2025, $ 23.3 million in aggregate principal amount of the Company's 2.00 % convertible senior notes due 2026 (the "2026 Notes") remain outstanding and the maximum number of shares issuable upon settlement of the 2026 Notes is 3.9 million (after giving effect to 1.0 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

As of June 30, 2025, $ 369.4 million in aggregate principal amount of the Company’s 3.50 % convertible senior notes due 2029 (the “2029 Notes”) remain outstanding and the maximum number of shares issuable upon settlement of the 2029 Notes is 55.0 million (after giving effect to 13.9 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

Prior to September 30, 2025, the potentially dilutive common stock equivalents for the Company also included warrants and prepaid stock purchase contracts.

As of September 30, 2025, $ 23.3 million in aggregate principal amount of the Company's 2.00 % convertible senior notes due 2026 (the "2026 Notes") remain outstanding and the maximum number of shares issuable upon settlement of the 2026 Notes is 3.9 million (after giving effect to 1.0 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

As of September 30, 2025, $ 369.4 million in aggregate principal amount of the Company’s 3.50 % convertible senior notes due 2029 (the “2029 Notes”) remain outstanding and the maximum number of shares issuable upon settlement of the 2029 Notes is 55.0 million (after giving effect to 13.9 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

On July 26, 2020, the Company issued to Ventas a warrant (the "Warrant") to purchase 16.3 million shares of the Company’s common stock, $ 0.01 par value per share, at a price per share of $ 3.00 .

During the six months ended June 30, 2025, the Company issued 5.7 million shares of common stock, upon the exercise of the Warrant by Ventas for the remaining 11.1 million shares, net of shares withheld to satisfy the aggregate exercise price.

As of June 30, 2025, the Company had no outstanding warrants.

During the nine months ended September 30, 2025, the Company issued 5.7 million shares of common stock, upon the exercise of the Warrant by Ventas for the remaining 11.1 million shares, net of shares withheld to satisfy the aggregate exercise price.

As of September 30, 2025, the Company had no outstanding warrants.

During the three months ended December 31, 2022, the Company issued 2,875,000 of its 7.00 % tangible equity units (the "Units") at a public offering price of $ 50.00 per Unit for an aggregate offering of $ 143.8 million.

1 unchanged sentence

In March 2025, the Company elected to exercise its right to settle the remaining outstanding 2,291,338 prepaid stock purchase contracts, pursuant to the early settlement right in the purchase contract agreement, and the Company delivered 29,636,386 shares of the Company's common stock upon settlement.

As of June 30, 2025, the Company had no outstanding prepaid stock purchase contracts and $ 1.5 million payable in 2025 for the senior amortizing notes component of the Units.

As of September 30, 2025, the Company had no outstanding prepaid stock purchase contracts and $ 0.8 million payable in 2025 for the senior amortizing notes component of the Units.

Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding, after giving effect to the weighted average minimum number of shares issuable upon settlement of the prepaid stock purchase contract component of the Units.

The following table summarizes the computation of basic weighted average shares presented in the condensed consolidated statements of operations.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

6 unchanged sentences

The Company has the following potentially outstanding shares of common stock, which were excluded from the computation of diluted net income (loss) per share attributable to common stockholders in both periods as a result of the net loss.

As of June 30,

As of September 30,

(in millions) 2025 2024

7 unchanged sentences

Total 63.0 62.5

The difference between the Company's effective tax rate for the three and six months ended June 30, 2025 and 2024 was primarily due to an increase in the benefit recorded on operational losses during the three and six months ended June 30, 2025.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 9.1 million for the three months ended June 30, 2025, which was partially offset by an increase to the valuation allowance of $ 8.3 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 24.9 million for the six months ended June 30, 2025, which was partially offset by an increase to the valuation allowance of $ 23.0 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 9.1 million for the three months ended June 30, 2024, which was offset by an increase to the valuation allowance of $ 9.2 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 16.7 million for the six months ended June 30, 2024, which was partially offset by an increase to the valuation allowance of $ 16.3 million.

The difference between the Company's effective tax rate for the three and nine months ended September 30, 2025 and 2024 was primarily due to an increase in the benefit recorded on operational losses during the three and nine months ended September 30, 2025.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 27.8 million for the three months ended September 30, 2025, which was partially offset by an increase to the valuation allowance of $ 27.5 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 52.7 million for the nine months ended September 30, 2025, which was partially offset by an increase to the valuation allowance of $ 50.5 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 12.2 million for the three months ended September 30, 2024, which was offset by an increase to the valuation allowance of $ 12.5 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 28.9 million for the nine months ended September 30, 2024, which was partially offset by an increase to the valuation allowance of $ 28.8 million.

The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized.

The Company's valuation allowance as of June 30, 2025 and December 31, 2024 was $ 544.5 million and $ 521.5 million, respectively.

The increase in the valuation allowance for the six months ended June 30, 2025 and 2024 is the result of current operating losses during the six months ended June 30, 2025 and 2024 and by the anticipated reversal of future tax liabilities offset by future tax deductions.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and six months ended June 30, 2025 and 2024 which are included in income tax expense or benefit for the period.

As of June 30, 2025, tax returns for years 2020 through 2023 are subject to future examination by tax authorities.

The Company's valuation allowance as of September 30, 2025 and December 31, 2024 was $ 572.0 million and $ 521.5 million, respectively.

The increase in the valuation allowance for the nine months ended September 30, 2025 and 2024 is the result of current operating losses during the nine months ended September 30, 2025 and 2024 and by the anticipated reversal of future tax liabilities offset by future tax deductions.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and nine months ended September 30, 2025 and 2024 which are included in income tax expense or benefit for the period.

As of September 30, 2025, tax returns for years 2020 through 2024 are subject to future examination by tax authorities.

In addition, the net operating losses from prior years are subject to adjustment under examination.

Supplemental Disclosure of Cash Flow Information

Six Months Ended

Nine Months Ended

September 30,

(in thousands) 2025 2024

20 unchanged sentences

Net cash received $ ( 8,133 ) $ ( 7,017 )

Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:

Non-cash lease transactions, net:

Prepaid expenses and other assets, net $ ( 871 ) $ —

Property, plant and equipment and leasehold intangibles, net ( 171 ) 427,444

Operating lease right-of-use assets 1,925 170,867

Financing lease obligations ( 57 ) ( 452,897 )

Operating lease obligations ( 306 ) ( 145,414 )

Accrued expenses ( 5,000 ) —

Loss (gain) on facility operating lease termination, net 4,480 —

Restricted cash consists principally of escrow deposits for interest rate caps, real estate taxes, property insurance, capital expenditures, and debt service reserves required by certain lenders under mortgage debt agreements, deposits as security for self-insured retention risk under general and professional liability programs, property insurance programs, and workers' compensation programs, and regulatory reserves for certain CCRCs.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows.

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Reconciliation of cash, cash equivalents, and restricted cash:

11 unchanged sentences

Independent Living .

The Company's Independent Living segment includes owned or leased communities that are primarily designed for middle to upper income seniors who desire to live in a residential setting that feels like home, without the efforts

of ownership.

The majority of the Company's independent living communities consist of both independent and assisted living units in a single community, which allows residents to age-in-place by providing them with a broad continuum of senior independent and assisted living services to accommodate their changing needs.

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024 2025 2024

31 unchanged sentences

Asset impairment:

Independent Living 14,624 233 14,624 233

Assisted Living and Memory Care 47,883 701 49,647 2,409

1 unchanged sentence

Loss (gain) on sale of communities, net ( 139 ) — ( 182 ) —

Loss (gain) on facility operating lease termination, net 4,480 — 4,480 —

Income (loss) from operations $ ( 53,835 ) $ 10,259 $ ( 9,352 ) $ 48,667

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024 2025 2024

11 unchanged sentences

Total capital expenditures $ 47,183 $ 48,623 $ 148,473 $ 153,272

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Independent Living (4)

7 unchanged sentences

(3) Segment operating income is defined as segment revenues less segment facility operating expenses (excluding facility depreciation and amortization) and costs incurred on behalf of managed communities.

(4) The Company's total carrying amount of goodwill is included within the Independent Living segment and was $ 27.3 million as of both June 30, 2025 and December 31, 2024.

(4) The Company's total carrying amount of goodwill is included within the Independent Living segment and was $ 27.3 million as of both September 30, 2025 and December 31, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements