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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-07 · 83 added, 277 removed, 336 unchanged (52% of the section changed)

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risks related to the implementation of our strategy, including initiatives undertaken to execute on our strategic priorities and their effect on our results;

any resurgence or variants of the COVID-19 pandemic;

limits on our ability to use net operating loss carryovers to reduce future tax payments;

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increased competition for, or a shortage of, associates, wage pressures resulting from increased competition, low unemployment levels, minimum wage increases and changes in overtime laws, and union activity;

environmental contamination at any of our communities;

failure to comply with existing environmental laws;

an adverse determination or resolution of complaints filed against us, including putative class action complaints;

negative publicity with respect to any lawsuits, claims, or other legal or regulatory proceedings;

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changes in, or our failure to comply with, employment-related laws and regulations;

environmental contamination at any of our communities;

failure to comply with existing environmental laws;

an adverse determination or resolution of complaints filed against us, including putative class action complaints;

the risks associated with current global economic conditions and general economic factors on us or our business partners such as inflation, commodity costs, fuel and other energy costs, competition in the labor market, costs of salaries, wages, benefits, and insurance, interest rates, tax rates, tariffs, and geopolitical tensions or conflicts, the impact of seasonal contagious illness or other contagious disease in the markets in which we operate;

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Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect management's views as of the date of this Quarterly Report on Form 10-Q.

We cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, we expressly disclaim any obligation to release publicly

any updates or revisions to any forward-looking statements contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.

We cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-

looking statements contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.

Unless otherwise specified, references to "Brookdale," "we," "us," "our," or "the Company" in this Quarterly Report on Form 10-Q mean Brookdale Senior Living Inc.

together with its consolidated subsidiaries.

We are the nation's premier operator of senior living communities, operating and managing 623 communities in 41 states as of September 30, 2025, with the ability to serve approximately 57,000 residents.

We are the nation's premier operator of senior living communities, operating and managing 568 communities in 41 states as of March 31, 2026, with the ability to serve approximately 51,000 residents.

We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry.

We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs").

As of September 30, 2025, we owned 372 communities (33,487 units), leased 221 communities (15,373 units), and managed 30 communities (4,416 units).

As of March 31, 2026, we owned 363 communities (32,879 units), leased 176 communities (10,456 units), and managed 29 communities (4,293 units).

Our senior living communities and our comprehensive network help to provide seniors with care, connection, and services in an environment that feels like home.

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The ability of residents to age-in-place is also beneficial to our residents' families who are concerned with care decisions for their elderly relatives.

Community Acquisitions

In September 2024, we entered into a definitive agreement to acquire 25 senior living communities (875 units) that were leased by us from Diversified Healthcare Trust for a purchase price of $135.0 million.

Effective February 27, 2025, we successfully closed the acquisition, which was funded with proceeds from mortgage financings and cash on hand.

Previously, these communities were held in a triple-net lease with annualized cash rent payments of $10.2 million and an initial maturity of December 31, 2032.

In September 2024, we entered into a definitive agreement to acquire five senior living communities (686 units) that were leased by us from Welltower Inc.

for a purchase price of $175.0 million.

Effective February 27, 2025, we successfully closed the acquisition, which was funded through proceeds from mortgage financings and cash on hand.

Previously, these communities were held in a triple-net lease with annualized cash rent payments of $13.7 million.

For the three months ended March 31, 2025, we recognized a $32.8 million loss on extinguishment of the financing obligation for the amount by which the repurchase price exceeded the previously recognized financing obligation for three communities previously subject to sale-leaseback transactions.

Community Dispositions

We have continued executing on our ongoing capital recycling program through which we have exited non-strategic or underperforming owned assets or leases.

Such activities completed during the nine months ended September 30, 2025 included the sale of 10 owned communities (257 units) and the disposal of 15 communities (1,701 units) through lease termination.

During the next twelve months, we expect to close on the disposition of six owned communities (773 units) classified as held for sale as of September 30, 2025.

Additionally, we plan to market in 2025 and sell approximately 25 owned communities.

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.

Such activities completed during the three months ended March 31, 2026 included the sale of seven owned communities (330 units) for proceeds of $22.1 million, net of transaction costs, and the disposal of two communities (152 units) through lease termination.

Subsequent to March 31, 2026, we completed the sale of three owned communities (545 units) for cash proceeds of $88 million, net of transaction costs.

We plan to sell 19 additional owned communities (1,438 units) during 2026.

The closings of the expected sales of assets are subject (where applicable) to our successful marketing of such assets on terms acceptable to us.

Further, the closings of the expected sales of assets are, or will be, subject to the satisfaction of various conditions, including (where applicable) the receipt of regulatory approvals.

There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

In December 2024, we and certain of our subsidiaries, and Ventas, Inc.

("Ventas") and certain of its subsidiaries, amended the existing master lease arrangement pursuant to which we, at the time of the amendment, leased 120 communities (10,180 units).

Beginning January 1, 2026, we will continue to lease 65 communities (4,055 units) under the master lease arrangement, which was extended through December 31, 2035 with one 10-year extension option remaining.

The remaining 55 communities (6,127 units) that were not renewed are either being sold by Ventas or transitioned, with such transitions commencing on September 1, 2025.

During the three months ended September 30, 2025, the lease terminated on 13 of such communities (1,412 units).

Results of Operations

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See "Non-GAAP Financial Measures" below for our definition of the measure and other important information regarding such measure, including reconciliations to the most comparable measure in accordance with generally accepted accounting principles in the United States ("GAAP").

Comparison of Three Months Ended September 30, 2025 and 2024

Comparison of Three Months Ended March 31, 2026 and 2025

Summary Operating Results

The following table summarizes our overall operating results for the three months ended September 30, 2025 and 2024.

The following table summarizes our overall operating results for the three months ended March 31, 2026 and 2025.

Three Months Ended

September 30, Increase (Decrease)

March 31, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

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Adjusted EBITDA 131,052 124,139 6,913 5.6 %

The increase in resident fees was primarily attributable to a 5.3% increase in same community RevPAR, comprised of a 2.0% increase in same community RevPOR and a 260 basis point increase in same community weighted average occupancy.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $7.3 million less in resident fees during the three months ended September 30, 2025 compared to the prior year period.

The increase in facility operating expense was primarily attributable to a 5.1% increase in same community facility operating expense primarily resulting from increases in wage rates, estimated group health insurance expense, and utilities expense.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $6.4 million less in facility operating expense during the three months ended September 30, 2025 compared to the prior year period.

The increase in net loss was primarily attributable to a $61.8 million increase in non-cash impairment charges, primarily related to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods, the increase in facility operating expense, a $5.1 million increase in transaction, legal, and organizational restructuring costs, and an increase in depreciation and amortization expense, partially offset by the increase in resident fees.

The increase in Adjusted EBITDA was primarily attributable to the increase in resident fees and a decrease in cash facility operating lease payments, partially offset by the increase in facility operating expense.

The decrease in resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $93.1 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by a 5.5% increase in same community RevPAR, comprised of a 3.4% increase in same community RevPOR and a 170 basis point increase in same community weighted average occupancy.

The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $72.0 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by a 5.9% increase in same community facility operating expense primarily due to increases in wage rates, increases in estimated insurance expense, and increases in utilities and maintenance expenses associated with winter storm activity.

The decrease in net loss was primarily attributable to a $32.8 million loss on extinguishment of a financing obligation during the prior year period for the reacquisition of three communities previously subject to sale-leaseback transactions and decreases in depreciation and amortization expense and facility operating lease expense due to the disposition of communities since the beginning of the prior year period.

The increase in Adjusted EBITDA was primarily attributable to an increase in same community resident fees partially offset by an increase in same community facility operating expense.

Operating Results - Senior Housing Segments

The following table summarizes the consolidated operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) for the three months ended September 30, 2025 and 2024, including operating results and data on a same community basis.

The same community portfolio excludes 51 communities, including 42 communities (4,715 units) leased from Ventas with a lease maturity in 2025 and 6 communities (773 units) classified as assets held for sale.

The following table summarizes the consolidated operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) for the three months ended March 31, 2026 and 2025, including operating results and data on a same community basis.

The same community portfolio excludes 23 communities, including 22 communities that we sold subsequent to March 31, 2026 or that we plan to sell during 2026.

See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

Three Months Ended

September 30, Increase (Decrease)

March 31, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2026 2025 Amount Percent

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Independent Living Segment

The following table summarizes the operating results and data for our Independent Living segment for the three months ended September 30, 2025 and 2024, including operating results and data on a same community basis.

The following table summarizes the operating results and data for our Independent Living segment for the three months ended March 31, 2026 and 2025, including operating results and data on a same community basis.

Three Months Ended

September 30, Increase (Decrease)

March 31, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2026 2025 Amount Percent

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RevPOR $ 5,242 $ 4,984 $ 258 5.2 %

The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 3.0% increase in same community RevPOR and a 180 basis point increase in same community weighted average occupancy.

The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $45.1 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 5.2% increase in same community RevPOR and a 160 basis point increase in same community weighted average occupancy.

The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $1.3 million less in resident fees during the three months ended September 30, 2025 compared to the prior year period.

The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates, estimated group health insurance expense, and utilities expense.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $1.1 million less in facility operating expense during the three months ended September 30, 2025 compared to the prior year period.

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $29.9 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates and increases in estimated insurance expense.

Assisted Living and Memory Care Segment

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the three months ended September 30, 2025 and 2024, including operating results and data on a same community basis.

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the three months ended March 31, 2026 and 2025, including operating results and data on a same community basis.

Three Months Ended

September 30, Increase (Decrease)

March 31, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2026 2025 Amount Percent

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RevPOR $ 7,086 $ 6,865 $ 221 3.2 %

The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 280 basis point increase in same community weighted average occupancy and a 1.9% increase in same community RevPOR.

The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $39.7 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 3.2% increase in same community RevPOR and a 170 basis point increase in same community weighted average occupancy.

The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $6.0 million less in resident fees during the three months ended September 30, 2025 compared to the prior year period.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $5.3 million less in facility operating expense during the three months ended September 30, 2025 compared to the prior year period.

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $34.1 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates, increases in estimated insurance expense, and increases in utilities and maintenance expenses associated with winter storm activity.

CCRCs Segment

The following table summarizes the operating results and data for our CCRCs segment for the three months ended September 30, 2025 and 2024, including operating results and data on a same community basis.

The following table summarizes the operating results and data for our CCRCs segment for the three months ended March 31, 2026 and 2025, including operating results and data on a same community basis.

Three Months Ended

September 30, Increase (Decrease)

March 31, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2026 2025 Amount Percent

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RevPOR $ 7,848 $ 7,745 $ 103 1.3 %

The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 300 basis point increase in same community weighted average occupancy and a 1.0% increase in the segment's same community RevPOR.

The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $8.3 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 210 basis point increase in same community weighted average occupancy and a 1.3% increase in the segment's same community RevPOR.

The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase, partially offset by lower skilled nursing revenue and an occupancy mix shift to more independent living residents.

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $8.0 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period.

The decrease was partially offset by an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates and increases in utilities and maintenance expenses associated with winter storm activity.

Operating Results - Other Income and Expense Items

The following table summarizes other income and expense items in our operating results for the three months ended September 30, 2025 and 2024.

The following table summarizes other income and expense items in our operating results for the three months ended March 31, 2026 and 2025.

Three Months Ended

September 30, Increase (Decrease)

March 31, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

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Loss (gain) on sale of communities, net (4,034) — 4,034 NM

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

Interest income 3,113 3,648 (535) (14.7) %

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Gain (loss) on debt modification and extinguishment, net (2,786) (35,220) (32,434) (92.1) %

Non-operating gain (loss) on sale of assets, net — 20 (20) (100.0)%

Other non-operating income (loss) 115 1,358 (1,243) (91.5) %

Benefit (provision) for income taxes 429 676 (247) (36.5) %

Reimbursed Costs Incurred on Behalf of Managed Communities and Costs Incurred on Behalf of Managed Communities.

General and Administrative Expense.

The increase in general and administrative expense was primarily attributable to $3.6 million of organizational restructuring costs related to senior leadership changes and our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions and $1.3 million of transaction costs for stockholder relations advisory matters in the current period.

General and administrative expense includes transaction, legal, and organizational restructuring costs of $5.1 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively.

Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs.

Legal costs include charges associated with putative class action litigation.

Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs.

Depreciation and Amortization .

The increase in depreciation and amortization expense was primarily due to the acquisition of 36 communities previously subject to operating leases and the completion of capital expenditures at leased communities since the beginning of the prior year period.

Asset Impairment.

During the three months ended September 30, 2025, we recorded $62.7 million of non-cash impairment charges primarily due to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods.

During the three months ended September 30, 2024, we recorded $0.9 million of non-cash impairment charges due to property damage sustained at certain communities.

Loss (gain) on facility operating lease termination, net.

During the three months ended September 30, 2025, we recognized a $4.5 million loss on facility operating lease termination, net, as a result of the termination of leases.

During the three months ended September 30, 2025, we terminated the leases for 14 communities.

Interest expense .

The decrease in interest expense was primarily due to a decrease in the fair value of interest rate derivatives in the prior period.

Gain (Loss) on Debt Modification and Extinguishment, Net.

The decrease in loss on debt modification and extinguishment, net was primarily due to debt modification costs recognized during the three months ended September 30, 2024 for the refinancing of mortgage debt.

Other Non-operating Income (Loss).

The decrease in other non-operating income is due to decreased income recognized for insurance recoveries from our property and casualty insurance policies.

Benefit (Provision) for Income Taxes.

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

We 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 in the valuation allowance of $27.5 million.

We 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.

We evaluate our 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.

Our valuation allowance as of September 30, 2025 and December 31, 2024 was $572.0 million and $521.5 million, respectively.

Comparison of Nine Months Ended September 30, 2025 and 2024

Summary Operating Results

The following table summarizes our overall operating results for the nine months ended September 30, 2025 and 2024.

Nine Months Ended

September 30, Increase (Decrease)

(in thousands) 2025 2024 Amount Percent

Resident fees $ 2,328,208 $ 2,227,679 $ 100,529 4.5 %

Facility operating expense 1,686,289 1,628,339 57,950 3.6 %

Net income (loss) (222,770) (118,057) 104,713 88.7 %

Adjusted EBITDA 352,260 287,669 64,591 22.5 %

The increase in resident fees was primarily attributable to a 4.9% increase in same community RevPAR, comprised of a 2.4% increase in same community RevPOR and a 190 basis point increase in same community weighted average occupancy.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $9.2 million less in resident fees during the nine months ended September 30, 2025 compared to the prior year period.

The increase in facility operating expense was primarily attributable to a 4.5% increase in same community facility operating expense, primarily resulting from increases in wage rates, utilities expense, repairs and maintenance expense, and estimated group health insurance expense.

The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $8.6 million less in facility operating expense during the nine months ended September 30, 2025 compared to the prior year period.

The increase in net loss was primarily attributable to a $62.4 million increase in non-cash impairment charges, primarily related to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods, the increase in facility operating expense, a $32.8 million loss on extinguishment of a financing obligation during the nine months ended September 30, 2025 for the reacquisition of three communities previously subject to sale-leaseback transactions for the amount by which the repurchase price exceeded the previously recognized financing obligation for such three communities, a $16.8 million increase in transaction, legal, and organizational restructuring costs, and an increase in depreciation and amortization expense, partially offset by the increase in resident fees.

Operating Results - Senior Housing Segments

The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the nine months ended September 30, 2025 and 2024 including operating results and data on a same community basis.

See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

Nine Months Ended

September 30, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2025 2024 Amount Percent

Resident fees $ 2,328,208 $ 2,227,679 $ 100,529 4.5 %

Facility operating expense $ 1,686,289 $ 1,628,339 $ 57,950 3.6 %

Number of communities (period end) 593 619 (26) (4.2) %

Total average units 50,555 50,934 (379) (0.7) %

RevPAR $ 5,109 $ 4,852 $ 257 5.3 %

Weighted average occupancy 80.4 % 78.3 % 210 bps n/a

RevPOR $ 6,354 $ 6,197 $ 157 2.5 %

Same Community Operating Results and Data

Resident fees $ 2,021,727 $ 1,926,444 $ 95,283 4.9 %

Facility operating expense $ 1,442,777 $ 1,381,119 $ 61,658 4.5 %

Number of communities 542 542 — — %

Total average units 43,211 43,206 5 — %

RevPAR $ 5,199 $ 4,954 $ 245 4.9 %

Weighted average occupancy 81.1 % 79.2 % 190 bps n/a

RevPOR $ 6,411 $ 6,258 $ 153 2.4 %

Independent Living Segment

The following table summarizes the operating results and data for our Independent Living segment for the nine months ended September 30, 2025 and 2024, including operating results and data on a same community basis.

Nine Months Ended

September 30, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2025 2024 Amount Percent

Resident fees $ 472,248 $ 448,870 $ 23,378 5.2 %

Facility operating expense $ 312,915 $ 301,146 $ 11,769 3.9 %

Number of communities (period end) 66 68 (2) (2.9) %

Total average units 12,501 12,572 (71) (0.6) %

RevPAR $ 4,197 $ 3,967 $ 230 5.8 %

Weighted average occupancy 82.3 % 80.1 % 220 bps n/a

RevPOR $ 5,099 $ 4,950 $ 149 3.0 %

Same Community Operating Results and Data

Resident fees $ 338,176 $ 323,115 $ 15,061 4.7 %

Facility operating expense $ 223,579 $ 213,795 $ 9,784 4.6 %

Number of communities 53 53 — — %

Total average units 9,137 9,134 3 — %

RevPAR $ 4,112 $ 3,931 $ 181 4.6 %

Occupancy rate (weighted average) 83.3 % 82.0 % 130 bps n/a

RevPOR $ 4,939 $ 4,795 $ 144 3.0 %

The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 3.0% increase in same community RevPOR and a 130 basis point increase in same community weighted average occupancy.

The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.

The increase in the segment's facility operating expense was primarily attributable to an increase in the segment’s same community facility operating expense, primarily resulting from increases in wage rates, repairs and maintenance expense, utilities expense, and estimated group health insurance expense.

Assisted Living and Memory Care Segment

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the nine months ended September 30, 2025 and 2024, including operating results and data on a same community basis.

Nine Months Ended

September 30, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2025 2024 Amount Percent

Resident fees $ 1,596,638 $ 1,528,147 $ 68,491 4.5 %

Facility operating expense $ 1,163,693 $ 1,122,766 $ 40,927 3.6 %

Number of communities (period end) 510 534 (24) (4.5) %

Total average units 33,320 33,630 (310) (0.9) %

RevPAR $ 5,312 $ 5,038 $ 274 5.4 %

Weighted average occupancy 79.9 % 77.9 % 200 bps n/a

RevPOR $ 6,647 $ 6,468 $ 179 2.8 %

Same Community Operating Results and Data

Resident fees $ 1,478,509 $ 1,407,155 $ 71,354 5.1 %

Facility operating expense $ 1,059,929 $ 1,013,422 $ 46,507 4.6 %

Number of communities 475 475 — — %

Total average units 30,385 30,384 1 — %

RevPAR $ 5,407 $ 5,146 $ 261 5.1 %

Weighted average occupancy 80.5 % 78.5 % 200 bps n/a

RevPOR $ 6,715 $ 6,553 $ 162 2.5 %

The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 2.5% increase in same community RevPOR and a 200 basis point increase in same community weighted average occupancy.

The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.

The increase in the segment's resident fees was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $8.5 million less in resident fees during the nine months ended September 30, 2025 compared to the prior year period.

The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, primarily resulting from increases in wage rates, utilities expense, and estimated group health insurance expense.

The increase in the segment's facility operating expense was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $7.8 million less in facility operating expense during the nine months ended September 30, 2025 compared to the prior year period.

The segment's same community facility operating expense for the nine months ended September 30, 2025 and 2024 excludes $1.2 million and $2.9 million, respectively, of natural disaster expense.

CCRCs Segment

The following table summarizes the operating results and data for our CCRCs segment for the nine months ended September 30, 2025 and 2024, including operating results and data on a same community basis.

Nine Months Ended

September 30, Increase (Decrease)

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) 2025 2024 Amount Percent

Resident fees $ 259,322 $ 250,662 $ 8,660 3.5 %

Facility operating expense $ 209,681 $ 204,427 $ 5,254 2.6 %

Number of communities (period end) 17 17 — — %

Total average units 4,734 4,732 2 — %

RevPAR $ 6,087 $ 5,886 $ 201 3.4 %

Weighted average occupancy 78.7 % 76.3 % 240 bps n/a

RevPOR $ 7,731 $ 7,715 $ 16 0.2 %

Same Community Operating Results and Data

Resident fees $ 205,042 $ 196,174 $ 8,868 4.5 %

Facility operating expense $ 159,269 $ 153,902 $ 5,367 3.5 %

Number of communities 14 14 — — %

Total average units 3,689 3,688 1 — %

RevPAR $ 6,176 $ 5,910 $ 266 4.5 %

Weighted average occupancy 80.5 % 77.5 % 300 bps n/a

RevPOR $ 7,675 $ 7,627 $ 48 0.6 %

The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 300 basis point increase in same community weighted average occupancy and a 0.6% increase in the segment's same community RevPOR.

The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase, and was partially offset by lower skilled nursing revenue and an occupancy mix shift to more independent living residents.

Operating Results - Other Income and Expense Items

The following table summarizes other income and expense items in our operating results for the nine months ended September 30, 2025 and 2024.

Nine Months Ended

September 30, Increase (Decrease)

(in thousands) 2025 2024 Amount Percent

Management fees.

Reimbursed costs incurred on behalf of managed communities 103,824 108,950 (5,126) (4.7) %

Costs incurred on behalf of managed communities 103,824 108,950 (5,126) (4.7) %

General and administrative expense 153,713 137,325 16,388 11.9 %

Facility operating lease expense 157,520 154,397 3,123 2.0 %

Depreciation and amortization 278,621 264,219 14,402 5.5 %

Asset impairment 65,060 2,642 62,418 NM

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

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

Interest income 9,587 14,155 (4,568) (32.3) %

Interest expense 191,686 185,570 6,116 3.3 %

Gain (loss) on debt modification and extinguishment, net (35,661) (2,267) 33,394 NM

Non-operating gain (loss) on sale of assets, net — 923 (923) (100.0)%

Other non-operating income (loss) 3,562 7,121 (3,559) (50.0) %

Benefit (provision) for income taxes 780 (1,086) 1,866 NM

The increase in management fees was primarily attributable to $2.5 million of management termination fee revenue recognized during the three months ended March 31, 2026.

Management fees of $5.4 million for the three months ended March 31, 2026 include $4.7 million of management fees attributable to communities for which our management agreements were terminated during such period or subsequent to March 31, 2026.

Reimbursed Costs Incurred on Behalf of Managed Communities and Costs Incurred on Behalf of Managed Communities.

The decrease in reimbursed costs and costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period, partially offset by an increase in community costs incurred for communities managed in both periods.

The increase in reimbursed costs and costs incurred on behalf of managed communities was primarily attributable to management agreements entered into since the beginning of the prior year period.

General and Administrative Expense.

The increase in general and administrative expense was primarily attributable to $8.8 million of organizational restructuring costs related to senior leadership changes and our efforts to reduce general and administrative expense, as we scaled our general and administrative costs in connection with community dispositions and $8.0 million of transaction costs for stockholder relations advisory matters in the current period.

General and administrative expense includes transaction, legal, and organizational restructuring costs of $17.3 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in general and administrative expense was primarily attributable to our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions and $1.6 million of transaction costs for stockholder relations advisory matters in the prior year period.

General and administrative expense includes transaction, legal, and organizational restructuring costs of $0.8 million and $1.7 million for the three months ended March 31, 2026 and 2025, respectively.

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Facility Operating Lease Expense.

The increase in facility operating lease expense was primarily due to the extension of the operating lease for 65 communities.

The decrease in facility operating lease expense was primarily due to the termination of community leases subsequent to the prior year period.

Depreciation and Amortization .

The decrease in depreciation and amortization expense was primarily due to the disposition of communities since the beginning of the prior year period.

Asset Impairment .

During the nine months ended September 30, 2025, we recorded $65.1 million of non-cash impairment charges, primarily related to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods.

During the nine months ended September 30, 2024, we recorded $2.6 million of non-cash impairment charges primarily due to non-cash impairment charges for property damage sustained at certain communities.

Loss (gain) on facility operating lease termination, net.

During the nine months ended September 30, 2025, we recognized a $4.5 million loss on facility operating lease termination, net, as a result of the termination of leases.

During the nine months ended September 30, 2025, we terminated the leases for 15 communities.

The increase in asset impairment was primarily due to changes in estimates of fair value for certain communities planned for disposition.

Loss (gain) on sale of communities, net .

The increase in gain on sale of communities is driven by the sale of seven communities for proceeds of $22.1 million, net of transaction costs in the three months ended March 31, 2026.

Interest expense .

The increase in interest expense was primarily due to debt obtained to finance the acquisition of 36 communities previously subject to operating leases subsequent to the prior year period.

The decrease in interest expense was primarily due to the acquisition of 36 communities previously subject to financing leases subsequent to the beginning of the prior year period and an increase in the fair value of interest rate derivatives in the current period.

Gain (Loss) on Debt Modification and Extinguishment, Net.

The increase in loss on debt modification and extinguishment, net was primarily due to a $32.8 million loss on extinguishment of a financing obligation during the current period for the reacquisition of three communities previously subject to sale-leaseback transactions.

Other Non-operating Income (Loss).

The decrease in other non-operating income is due to decreased income recognized for insurance recoveries from our property and casualty insurance policies.

Benefit (Provision) for Income Taxes.

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

We 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 in the valuation allowance of $50.5 million.

We 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 decrease in loss on debt modification and extinguishment, net was primarily due to a $32.8 million loss on extinguishment of a financing obligation during the prior year period for the reacquisition of three communities previously subject to sale-leaseback transactions.

Liquidity and Capital Resources

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The following is a summary of cash flows from operating, investing, and financing activities, as reflected in the condensed consolidated statements of cash flows, and our Adjusted Free Cash Flow.

Nine Months Ended

September 30, Increase (Decrease)

Three Months Ended

March 31, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

Net cash provided by operating activities $ 20,887 $ 23,402 $ (2,515) (10.7) %

Net cash provided by (used in) investing activities (411,349) (133,516) 277,833 NM

Net cash provided by (used in) investing activities (29,734) (326,755) (297,021) (90.9) %

Net cash provided by (used in) financing activities (508) 239,669 (240,177) NM

Net increase (decrease) in cash, cash equivalents, and restricted cash (48,513) (17,623) 30,890 NM

Net increase (decrease) in cash, cash equivalents, and restricted cash (9,355) (63,684) (54,329) (85.3) %

Cash, cash equivalents, and restricted cash at beginning of period 343,008 379,840 (36,832) (9.7) %

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Adjusted Free Cash Flow $ (12,225) $ 3,780 $ (16,005) NM

The increase in net cash provided by operating activities was primarily attributable to an increase in resident fees, a $22.6 million decrease in cash facility operating lease payments, and a $12.1 million increase in lessor reimbursements for capital expenditures for operating leases compared to the prior year period, partially offset by an increase in facility operating expense compared to the prior year period.

The increase in net cash used in investing activities was primarily attributable to $311.0 million of cash paid for the acquisition of formerly leased communities in the current period.

The change in net cash provided by (used in) financing activities was primarily attributable to a $132.0 million decrease in repayment of debt and financing lease obligations compared to the prior year period and a $56.7 million increase in debt proceeds compared to the prior year period.

The change in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities.

The decrease in net cash provided by operating activities was primarily attributable to an increase in the use of cash for changes in accrued expenses.

The decrease in net cash used in investing activities was primarily attributable to $311.0 million of cash paid for the acquisition of formerly leased communities in the prior year period.

The change in net cash provided by (used in) financing activities was primarily attributable to a $147.6 million increase in repayment of debt compared to the prior year period and a $89.0 million decrease in debt proceeds compared to the prior year period.

The change in Adjusted Free Cash Flow was primarily attributable to a $7.3 million increase in non-development capital expenditures, net and the decrease in net cash provided by operating activities.

Our principal sources of liquidity have historically been from:

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We are highly leveraged and have significant debt and lease obligations.

As of September 30, 2025, we had $4.3 billion of debt outstanding at a weighted average interest rate of 5.18%.

As of March 31, 2026, we had $4.3 billion of debt outstanding at a weighted average interest rate of 5.06%.

As of such date, 89.3%, or $3.9 billion, of our total debt obligations represented non-recourse property-level mortgage financings.

As of September 30, 2025, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending September 30, 2026, we will be required to make approximately $200.0 million of cash lease payments in connection with our existing operating and financing leases (without giving effect to the early termination by Ventas of certain of our community leases with maturity dates of December 31, 2025).

Total liquidity of $351.6 million as of September 30, 2025 included $253.4 million of unrestricted cash and cash equivalents (excluding restricted cash of $77.9 million) and $98.1 million of availability on our secured credit facility (excluding $16.1 million of availability on our separate letter of credit facilities, which can be drawn only as letters of credit).

Total liquidity as of September 30, 2025 decreased $37.7 million from total liquidity of $389.3 million as of December 31, 2024.

The decrease was primarily attributable to cash paid for acquisitions, net of financing proceeds, and the repayment of mortgage debt, partially offset by $45.5 million of Adjusted Free Cash Flow and a $37.6 million increase in availability on our secured credit facility during the period.

As of September 30, 2025, our current liabilities exceeded current assets by $100.8 million.

Included in our current liabilities is $82.4 million of the current portion of operating and financing lease obligations, for which the associated right-of-use assets are excluded from current assets on our condensed consolidated balance sheets.

As of March 31, 2026, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending March 31, 2027, we will be required to make approximately $192.2 million of cash lease payments in connection with our existing operating and financing leases.

Total liquidity of $368.7 million as of March 31, 2026 included $265.2 million of unrestricted cash and cash equivalents (excluding restricted cash of $68.4 million), $4.9 million of marketable securities, and $98.6 million of availability on our secured credit facility.

Subsequent to March 31, 2026, we completed the sale of three owned communities (545 units) for cash proceeds of $88 million, net of transaction costs, which further enhanced our liquidity subsequent to March 31, 2026.

We currently estimate our historical principal sources of liquidity, primarily our cash flows from operations, together with cash balances on hand and cash equivalents, availability on our secured credit facility, and proceeds from financings and refinancings of various assets will be sufficient to fund our liquidity needs for at least the next 12 months.

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In addition, our inability to satisfy underwriting criteria for individual communities may limit our access to our historical lending sources for such communities, including Fannie Mae and Freddie Mac.

As of September 30, 2025, 9% of our owned communities were unencumbered by mortgage debt.

We have $98.8 million and $227.1 million of mortgage notes payable scheduled to mature in January 2026 and October 2026, respectively, with one-year extension options, exercisable by us subject to the satisfaction of certain conditions.

We expect to satisfy the conditions to exercise the options to extend the mortgage notes payable for the additional one-year term.

As of March 31, 2026, 11% of our owned communities were unencumbered by mortgage debt.

As of March 31, 2026, the current portion of long-term debt was $82.6 million, which includes $23.3 million of our 2.00% convertible senior notes due October 15, 2026 and $6.2 million of mortgage notes payable secured by assets held for sale.

We have completed the refinancing of all of our mortgage debt maturities due in 2026.

Our other debt maturities in 2026 are $20.3 million of mortgage debt and the $23.3 million aggregate principal amount of the 2026 Notes.

Our inability to obtain refinancing proceeds sufficient to cover 2027 and later maturing indebtedness could adversely impact our liquidity, and may cause us to seek additional alternative sources of financing, which may be less attractive or unavailable.

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Capital Expenditures

Our capital expenditures are comprised of community-level, corporate, and development capital expenditures.

Our capital expenditures for the three months ended March 31, 2026 are comprised of community-level and corporate capital expenditures.

Community-level capital expenditures include maintenance expenditures (including routine maintenance of communities over $1,500 per occurrence), community renovations, unit upgrades (including unit turnovers over $500 per unit), and other major building infrastructure projects (including replacements of major building systems).

Corporate capital expenditures include those for information technology systems and equipment and the remediation or replacement of assets as a result of casualty losses.

Development capital expenditures include community expansions, major community redevelopment and repositioning projects, and the development of new communities.

The following table summarizes our capital expenditures for the nine months ended September 30, 2025 for our consolidated business.

The following table summarizes our capital expenditures for the three months ended March 31, 2026 for our consolidated business.

(in thousands)

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Non-development capital expenditures, net $ 48,380

Development capital expenditures, net 13

Total capital expenditures, net $ 128,395

(1) Reflects the amount invested, net of lessor reimbursements of $4.8 million.

(2) Amount is included in Adjusted Free Cash Flow.

In the aggregate, we expect our full-year 2025 non-development capital expenditures, net of anticipated lessor reimbursements and property and casualty insurance proceeds, to be $170.0 million to $175.0 million.

We anticipate that our 2025 capital expenditures will be funded from cash on hand, cash equivalents, cash flows from operations, and reimbursements from lessors.

Credit Facilities

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Amounts drawn under the facility will bear interest at the Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 2.5% to 3.0% based upon the percentage of the total commitment drawn.

Additionally, a quarterly commitment fee of 0.25% per annum was applicable on the unused portion of the facility as of September 30, 2025.

Additionally, a quarterly commitment fee of 0.35% per annum was applicable on the unused portion of the facility as of March 31, 2026.

The revolving credit facility is currently secured by first priority mortgages and negative pledges on certain of our communities.

Available capacity under the facility will vary from time to time based upon certain calculations related to the appraised value and performance of the communities securing the credit facility and the variable interest rate of the credit facility.

As of September 30, 2025, $1.9 million of letters of credit and no cash borrowings were outstanding under our $100.0 million secured credit facility and the facility had $98.1 million of availability.

We 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.

As of March 31, 2026, $1.4 million of letters of credit and no cash borrowings were outstanding under our $100.0 million secured credit facility and the facility had $98.6 million of availability.

We also had separate letter of credit facilities providing up to $68.0 million of letters of credit as of March 31, 2026 under which $59.2 million had been issued as of that date.

Long-Term Leases

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

As of March 31, 2026, we operated 176 communities under long-term leases (167 operating leases and 9 financing leases).

The substantial majority of our lease arrangements are structured as master leases.

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The lease terms generally provide for renewal or extension options, or in certain cases, purchase options.

The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions, and financial covenants, such as those requiring us to maintain prescribed minimum liquidity and net worth and lease coverage ratios.

Our lease documents generally contain non-financial covenants, such as those requiring us to comply with Medicare or Medicaid provider requirements and maintain insurance coverage.

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These radius restrictions could negatively affect our ability to expand, develop, or acquire senior housing communities and operating companies.

For the nine months ended September 30, 2025, our cash lease payments for our operating leases were $177.0 million and for our financing leases were $10.0 million.

For the twelve months ending September 30, 2026, we will be required to make approximately $200.0 million of cash lease payments in connection with our existing operating and financing leases (without giving effect to the early termination by Ventas of certain of our community leases with maturity dates of December 31, 2025).

For the three months ended March 31, 2026, our cash lease payments for our operating leases were $46.5 million and for our financing leases were $2.0 million.

For the twelve months ending March 31, 2027, we will be required to make approximately $192.2 million of cash lease payments in connection with our existing operating and financing leases.

Debt and Lease Covenants

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These covenants include a requirement contained in certain of our long-term debt documents for us to maintain liquidity of at least $130.0 million at each quarter-end determination date.

As of September 30, 2025, our liquidity was $351.6 million.

As of March 31, 2026, our liquidity was $368.7 million.

In addition, our debt and lease documents generally contain non-financial covenants, such as those requiring us to comply with Medicare or Medicaid provider requirements and maintain insurance coverage.

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We cannot provide assurance that we would be able to pay the debt or lease obligations if they became due upon acceleration following an event of default.

As of September 30, 2025, we are in compliance with the financial covenants of our debt agreements and long-term leases.

As of March 31, 2026, we are in compliance with the financial covenants of our debt agreements and long-term leases.

Non-GAAP Financial Measures

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and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, legal, cost reduction, or organizational restructuring items that management does not consider as part of our underlying core operating performance and that management believes impact the comparability of performance between periods.

For the periods presented herein, such other items include non-cash impairment charges, operating lease expense adjustment, non-cash stock-based compensation expense, gain/loss on sale of communities, gain/loss on facility operating lease termination, and transaction, legal, and organizational restructuring costs.

For the periods presented herein, such other items include non-cash impairment charges, operating lease expense adjustment, non-cash stock-based compensation expense, gain/loss on sale of communities, and transaction, legal, and organizational restructuring costs.

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(ii) excluded depreciation, amortization, and impairment charges may represent the wear and tear and/or reduction in value of our communities, goodwill, and other assets and may be indicative of future needs for capital expenditures;

and (iii) we may incur income/expense similar to those for which adjustments are made, such as gain/loss on sale of assets, facility operating lease termination, or debt modification and

extinguishment, non-cash stock-based compensation expense, and transaction, legal, and other costs, and such income/expense may significantly affect our operating results.

and (iii) we may incur income/expense similar to those for which adjustments are made, such as gain/loss on sale of assets, facility operating lease termination, or debt modification and extinguishment, non-cash stock-based compensation expense, and transaction, legal, and other costs, and such income/expense may significantly affect our operating results.

The table below reconciles Adjusted EBITDA from net income (loss).

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2026 2025

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Loss (gain) on debt modification and extinguishment, net 2,786 35,220

Non-operating loss (gain) on sale of assets, net — (20) — (923)

Other non-operating (income) loss (115) (1,358)

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Loss (gain) on sale of communities, net (4,034) —

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

Operating lease expense adjustment (720) (3,853)

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2026 2025

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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 2. Management’s Discussion and Analysis