What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-07 · 246 added, 81 removed, 338 unchanged (49% of the section changed)

47 unchanged sentences

together with its consolidated subsidiaries.

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 are the nation's premier operator of senior living communities, operating and managing 541 communities in 41 states as of June 30, 2026, with the ability to serve approximately 46,000 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 March 31, 2026, we owned 363 communities (32,879 units), leased 176 communities (10,456 units), and managed 29 communities (4,293 units).

As of June 30, 2026, we owned 359 communities (32,294 units), leased 176 communities (10,456 units), and managed 6 communities (570 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.

2 unchanged sentences

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 Dispositions

Community Transactions

Subsequent to June 30, 2026, we entered into an agreement to acquire 17 communities (735 units) that are currently leased by us for a purchase price of approximately $157.0 million plus transaction costs.

The acquisition is expected to close in the fourth quarter of 2026, subject to the satisfaction of customary closing conditions for real estate transactions.

We expect to fund the acquisition through proceeds from non-recourse mortgage financing and cash on hand.

In June 2026, we acquired one previously managed community (244 units) in Houston, Texas for a purchase price of $23.4 million.

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 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.

Such activities completed during the six months ended June 30, 2026 included the sale of 13 owned communities (1,108 units) for proceeds of $147.4 million, net of transaction costs, and the disposal of two leased communities (152 units) through lease terminations.

For the six months ended June 30, 2026, we recognized a net gain on sale of assets of $49.4 million.

Subsequent to June 30, 2026, we completed the sale of three owned communities (228 units) for proceeds of $2.5 million, net of transaction costs.

We plan to sell 13 additional owned communities (898 units) during 2026.

10 unchanged sentences

We define our same community portfolio as communities consolidated and operational for the full period in both comparison years.

Consolidated communities excluded from the same community portfolio include communities acquired or disposed of since the beginning of the prior year, communities classified as assets held for sale, certain communities planned for disposition including through asset sales or lease terminations, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, and certain communities that have experienced a casualty event that significantly impacts their operations.

including through asset sales or lease terminations, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, and certain communities that have experienced a casualty event that significantly impacts their operations.

Our management uses same community operating results and data for decision making and components of executive compensation, and we believe such results and data provide useful information to investors, because it enables comparisons of revenue, expense, and other operating measures for a consistent portfolio over time without giving effect to the impacts of communities that were not consolidated and operational for the comparison periods, communities acquired or disposed during the comparison periods (or planned for disposition), and communities with results that are or likely will be impacted by completed or in-process development-related capital expenditure projects.

11 unchanged sentences

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 March 31, 2026 and 2025

Comparison of Three Months Ended June 30, 2026 and 2025

Summary Operating Results

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

The following table summarizes our overall operating results for the three months ended June 30, 2026 and 2025.

Three Months Ended

March 31, Increase (Decrease)

June 30, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

1 unchanged sentence

Facility operating expense 503,455 562,317 (58,862) (10.5) %

Net income (loss) (6,904) (64,993) (58,089) (89.4) %

Net income (loss) 23,257 (43,039) 66,296 NM

Adjusted EBITDA 122,062 117,050 5,012 4.3 %

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 in resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $106.4 million less in resident fees during the three months ended June 30, 2026 compared to the prior year period.

The decrease was partially offset by a 5.5% increase in same community RevPAR, comprised of a 4.1% increase in same community RevPOR and a 110 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 decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $84.7 million less in facility operating expense during the three months ended June 30, 2026 compared to the prior year period.

The decrease was partially offset by a 5.5% increase in same community facility operating expense primarily attributable to increases in wage rates, estimated insurance expense, maintenance expense, and estimated losses on accounts receivable.

The increase in net income was primarily attributable to a $45.4 million gain on sale of communities in the current period and a decrease in depreciation and amortization 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 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.

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 June 30, 2026 and 2025, including operating results and data on a same community basis.

The same community portfolio excludes 20 communities, including 16 communities that we sold subsequent to June 30, 2026 or that we plan to sell in 2026.

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

Three Months Ended

March 31, Increase (Decrease)

June 30, Increase (Decrease)

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

15 unchanged sentences

Independent Living Segment

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.

The following table summarizes the operating results and data for our Independent Living segment for the three months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Three Months Ended

March 31, Increase (Decrease)

June 30, Increase (Decrease)

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

14 unchanged sentences

RevPOR $ 5,218 $ 4,972 $ 246 4.9 %

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 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 $45.5 million less in resident fees during the three months ended June 30, 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 4.9% increase in same community RevPOR and a 90 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 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.

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 $30.3 million less in facility operating expense during the three months ended June 30, 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, estimated insurance expense, maintenance expense, and estimated losses on accounts receivable.

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 March 31, 2026 and 2025, 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 June 30, 2026 and 2025, including operating results and data on a same community basis.

Three Months Ended

March 31, Increase (Decrease)

June 30, Increase (Decrease)

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

14 unchanged sentences

RevPOR $ 7,042 $ 6,775 $ 267 3.9 %

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 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 $44.2 million less in resident fees during the three months ended June 30, 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 3.9% increase in same community RevPOR and a 120 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 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.

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 $39.3 million less in facility operating expense during the three months ended June 30, 2026 compared to the prior year period.

CCRCs Segment

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.

The following table summarizes the operating results and data for our CCRCs segment for the three months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Three Months Ended

March 31, Increase (Decrease)

June 30, Increase (Decrease)

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

14 unchanged sentences

RevPOR $ 7,895 $ 7,661 $ 234 3.1 %

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.

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 $16.7 million less in resident fees during the three months ended June 30, 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 3.1% increase in the segment's same community RevPOR and a 210 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, partially offset by 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 $15.1 million less in facility operating expense during the three months ended June 30, 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, maintenance expense, and estimated losses on accounts receivable.

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 March 31, 2026 and 2025.

The following table summarizes other income and expense items in our operating results for the three months ended June 30, 2026 and 2025.

Three Months Ended

March 31, Increase (Decrease)

June 30, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

9 unchanged sentences

Interest expense 58,320 63,081 (4,761) (7.5) %

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

Gain (loss) on debt modification and extinguishment, net (2,934) (115) 2,819 NM

Other non-operating income (loss) 708 2,060 (1,352) (65.6) %

Benefit (provision) for income taxes (5,526) 271 (5,797) NM

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 the termination of management agreements since the beginning of the prior year period.

General and Administrative Expense.

The decrease in general and administrative expense was primarily attributable to $5.1 million of transaction costs for stockholder relations advisory matters in the prior year period and our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions.

General and administrative expense includes transaction, legal, and organizational restructuring costs of $4.5 million and $10.5 million for the three months ended June 30, 2026 and 2025, 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.

Facility Operating Lease Expense.

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

Depreciation and Amortization .

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

Asset Impairment .

The increase in asset impairment was primarily attributable 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 primarily attributable to the sale of six communities for proceeds of $125.3 million, net of transaction costs in the three months ended June 30, 2026.

Interest expense .

The decrease in interest expense was primarily attributable to an increase in the fair value of interest rate derivatives in the current period and a decrease in interest expense on long-term debt primarily as a result of decreases in variable interest rate indices.

Benefit (Provision) for Income Taxes.

The difference between our effective tax rate for the three months ended June 30, 2026 and 2025 was primarily attributable to expense recorded on operating income during the three months ended June 30, 2026 as opposed to a benefit recorded on operating losses during the three months ended June 30, 2025.

We recorded an aggregate deferred federal, state, and local tax expense of $23.5 million for the three months ended June 30, 2026, which was partially offset by a decrease to the valuation allowance of $18.7 million.

We 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.

Comparison of Six Months Ended June 30, 2026 and 2025

Summary Operating Results

The following table summarizes our overall operating results for the six months ended June 30, 2026 and 2025.

Six Months Ended

June 30, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

Resident fees $ 1,430,938 $ 1,553,068 $ (122,130) (7.9) %

Facility operating expense 1,014,925 1,119,304 (104,379) (9.3) %

Net income (loss) 16,353 (108,032) 124,385 NM

Adjusted EBITDA 253,114 241,189 11,925 4.9 %

The decrease in resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $199.8 million less in resident fees during the six months ended June 30, 2026 compared to the prior year period.

The decrease was partially offset by a 5.5% increase in same community RevPAR, comprised of a 3.7% increase in same community RevPOR and a 140 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 $157.5 million less in facility operating expense during the six months ended June 30, 2026 compared to the prior year period.

The decrease was partially offset by a 5.7% increase in same community facility operating expense primarily attributable to increases in wage rates, estimated insurance expense, maintenance expense, utilities expense, and estimated losses on accounts receivable.

The increase in net income was primarily attributable to a $49.4 million gain on sale of communities in the current period, a decrease in depreciation and amortization expense due to the disposition of communities since the beginning of the prior year period, and 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.

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 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 six months ended June 30, 2026 and 2025 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.

Six Months Ended

June 30, Increase (Decrease)

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

Resident fees $ 1,430,938 $ 1,553,068 $ (122,130) (7.9) %

Facility operating expense $ 1,014,925 $ 1,119,304 $ (104,379) (9.3) %

Number of communities (period end) 535 617 (82) (13.3) %

Total average units 43,229 50,826 (7,597) (14.9) %

RevPAR $ 5,501 $ 5,085 $ 416 8.2 %

Weighted average occupancy 82.3 % 79.7 % 260 bps n/a

RevPOR $ 6,688 $ 6,379 $ 309 4.8 %

Same Community Operating Results and Data

Resident fees $ 1,379,336 $ 1,307,037 $ 72,299 5.5 %

Facility operating expense $ 966,045 $ 913,844 $ 52,201 5.7 %

Number of communities 515 515 — — %

Total average units 41,238 41,237 1 — %

RevPAR $ 5,575 $ 5,283 $ 292 5.5 %

Weighted average occupancy 82.8 % 81.4 % 140 bps n/a

RevPOR $ 6,730 $ 6,489 $ 241 3.7 %

Independent Living Segment

The following table summarizes the operating results and data for our Independent Living segment for the six months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Six Months Ended

June 30, Increase (Decrease)

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

Resident fees $ 240,116 $ 315,252 $ (75,136) (23.8) %

Facility operating expense $ 155,076 $ 207,422 $ (52,346) (25.2) %

Number of communities (period end) 54 68 (14) (20.6) %

Total average units 9,138 12,583 (3,445) (27.4) %

RevPAR $ 4,379 $ 4,176 $ 203 4.9 %

Weighted average occupancy 84.2 % 81.6 % 260 bps n/a

RevPOR $ 5,203 $ 5,118 $ 85 1.7 %

Same Community Operating Results and Data

Resident fees $ 236,777 $ 222,025 $ 14,752 6.6 %

Facility operating expense $ 153,521 $ 144,670 $ 8,851 6.1 %

Number of communities 52 52 — — %

Total average units 8,941 8,940 1 — %

RevPAR $ 4,414 $ 4,139 $ 275 6.6 %

Occupancy rate (weighted average) 84.4 % 83.2 % 120 bps n/a

RevPOR $ 5,230 $ 4,978 $ 252 5.1 %

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 $90.6 million less in resident fees during the six months ended June 30, 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 5.1% increase in same community RevPOR and a 120 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 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 $60.1 million less in facility operating expense during the six months ended June 30, 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, estimated insurance expense, maintenance expense, and estimated losses on accounts receivable.

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 six months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Six Months Ended

June 30, Increase (Decrease)

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

Resident fees $ 1,039,777 $ 1,064,697 $ (24,920) (2.3) %

Facility operating expense $ 743,685 $ 772,437 $ (28,752) (3.7) %

Number of communities (period end) 468 532 (64) (12.0) %

Total average units 30,228 33,509 (3,281) (9.8) %

RevPAR $ 5,711 $ 5,284 $ 427 8.1 %

Weighted average occupancy 81.7 % 79.2 % 250 bps n/a

RevPOR $ 6,993 $ 6,673 $ 320 4.8 %

Same Community Operating Results and Data

Resident fees $ 1,001,280 $ 950,203 $ 51,077 5.4 %

Facility operating expense $ 705,844 $ 665,157 $ 40,687 6.1 %

Number of communities 450 450 — — %

Total average units 28,687 28,687 — — %

RevPAR $ 5,817 $ 5,521 $ 296 5.4 %

Weighted average occupancy 82.4 % 80.9 % 150 bps n/a

RevPOR $ 7,064 $ 6,820 $ 244 3.6 %

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 $83.2 million less in resident fees during the six months ended June 30, 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 3.6% increase in same community RevPOR and a 150 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 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 $73.1 million less in facility operating expense during the six months ended June 30, 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, estimated insurance expense, maintenance expense, utilities expense, and estimated losses on accounts receivable.

The segment's same community facility operating expense for the six months ended June 30, 2025 excludes $1.2 million of natural disaster expense.

CCRCs Segment

The following table summarizes the operating results and data for our CCRCs segment for the six months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Six Months Ended

June 30, Increase (Decrease)

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

Resident fees $ 151,045 $ 173,119 $ (22,074) (12.8) %

Facility operating expense $ 116,164 $ 139,445 $ (23,281) (16.7) %

Number of communities (period end) 13 17 (4) (23.5) %

Total average units 3,863 4,734 (871) (18.4) %

RevPAR $ 6,517 $ 6,095 $ 422 6.9 %

Weighted average occupancy 82.4 % 78.5 % 390 bps n/a

RevPOR $ 7,906 $ 7,765 $ 141 1.8 %

Same Community Operating Results and Data

Resident fees $ 141,279 $ 134,809 $ 6,470 4.8 %

Facility operating expense $ 106,680 $ 104,017 $ 2,663 2.6 %

Number of communities 13 13 — — %

Total average units 3,610 3,610 — — %

RevPAR $ 6,523 $ 6,224 $ 299 4.8 %

Weighted average occupancy 82.9 % 80.8 % 210 bps n/a

RevPOR $ 7,871 $ 7,703 $ 168 2.2 %

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 $26.0 million less in resident fees during the six months ended June 30, 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 2.2% 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 an occupancy mix shift to more independent living residents and lower skilled nursing occupancy.

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 $24.3 million less in facility operating expense during the six months ended June 30, 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 maintenance expense.

Operating Results - Other Income and Expense Items

The following table summarizes other income and expense items in our operating results for the six months ended June 30, 2026 and 2025.

Six Months Ended

June 30, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

Management fees $ 6,115 $ 5,243 $ 872 16.6 %

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 46,386 68,497 (22,111) (32.3) %

Costs incurred on behalf of managed communities 46,386 68,497 (22,111) (32.3) %

General and administrative expense 92,189 102,847 (10,658) (10.4) %

Facility operating lease expense 87,752 105,527 (17,775) (16.8) %

Depreciation and amortization 144,572 183,829 (39,257) (21.4) %

Asset impairment 10,015 2,364 7,651 NM

Loss (gain) on sale of communities, net (49,425) (43) 49,382 NM

Interest income 7,194 6,567 627 9.5 %

Interest expense 117,872 128,112 (10,240) (8.0) %

Gain (loss) on debt modification and extinguishment, net (5,720) (35,335) (29,615) (83.8) %

Other non-operating income (loss) 823 3,418 (2,595) (75.9) %

Benefit (provision) for income taxes (5,097) 947 (6,044) NM

Management Fees .

Management fees of $6.1 million for the six months ended June 30, 2026 include $5.4 million of management fees attributable to communities for which our management agreements were terminated during such period or subsequent to June 30, 2026.

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

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.

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.

General and Administrative Expense.

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.

The decrease in general and administrative expense was primarily attributable to $6.7 million of transaction costs for stockholder relations advisory matters in the prior year period and our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions.

General and administrative expense includes transaction, legal, and organizational restructuring costs of $5.3 million and $12.2 million for the six months ended June 30, 2026 and 2025, respectively.

2 unchanged sentences

Facility Operating Lease Expense.

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

The decrease in facility operating lease expense was primarily attributable 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.

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

Asset Impairment.

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

The increase in asset impairment was primarily attributable 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.

During the six months ended June 30, 2026, we recognized a $49.4 million gain on sale of communities attributable to the sale of 13 communities for proceeds of $147.4 million, net of transaction costs.

Interest Expense.

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.

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

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

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.

The decrease in loss on debt modification and extinguishment, net 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.

Benefit (Provision) for Income Taxes.

The difference between our effective tax rate for the six months ended June 30, 2026 and 2025 was primarily attributable to expense recorded on operating income during the six months ended June 30, 2026 as opposed to a benefit recorded on operating losses during the six months ended June 30, 2025.

We recorded an aggregate deferred federal, state, and local tax expense of $15.4 million for the six months ended June 30, 2026, which was partially offset by a decrease in the valuation allowance of $11.6 million.

We 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.

Liquidity and Capital Resources

2 unchanged sentences

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.

Three Months Ended

March 31, Increase (Decrease)

Six Months Ended

June 30, Increase (Decrease)

(in thousands) 2026 2025 Amount Percent

Net cash provided by operating activities $ 112,802 $ 106,966 $ 5,836 5.5 %

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

Net cash provided by (used in) investing activities 7,866 (377,154) 385,020 NM

Net cash provided by (used in) financing activities (22,140) 213,910 (236,050) NM

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

Net increase (decrease) in cash, cash equivalents, and restricted cash 98,528 (56,278) 154,806 NM

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

Cash, cash equivalents, and restricted cash at end of period $ 441,536 $ 323,562 $ 117,974 36.5 %

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

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.

Adjusted Free Cash Flow $ 25,980 $ 23,688 $ 2,292 9.7 %

The increase in net cash provided by operating activities was primarily attributable to an increase in same community resident fees partially offset by an increase in same community facility operating expense and an increase in the use of cash for changes in accrued expenses.

The change in net cash provided by (used in) investing activities was primarily attributable to a $287.5 million decrease in cash paid for the acquisition of formerly leased or managed communities and a $146.3 million increase in net proceeds from the sale of communities compared to the prior year period.

These changes were partially offset by a $20.0 million decrease in proceeds from sales and maturities of marketable securities and a $19.8 million increase in purchases of marketable securities compared to the prior year period.

The change in net cash provided by (used in) financing activities was primarily attributable to a $345.4 million increase in debt repayments and a $9.4 million increase in cash paid for financing costs compared to the prior year period, partially offset by a $98.9 million increase in debt proceeds and a $23.0 million increase in proceeds from our line of credit.

The increase in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities, partially offset by a $2.7 million decrease in property and casualty insurance proceeds compared to the prior year period.

Our principal sources of liquidity have historically been from:

17 unchanged sentences

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

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

As of June 30, 2026, we had $4.3 billion of debt outstanding at a weighted average interest rate of 5.09%.

As of such date, 88.9%, or $3.9 billion, of our total debt obligations represented non-recourse property-level mortgage financings.

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.

As of June 30, 2026, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending June 30, 2027, we will be required to make approximately $193.9 million of cash lease payments in connection with our existing operating and financing leases.

Total liquidity of $565.8 million as of June 30, 2026 included $370.4 million of unrestricted cash and cash equivalents (excluding restricted cash of $71.1 million), $19.9 million of marketable securities, and $175.6 million of availability on our secured credit facility.

Total liquidity as of June 30, 2026 increased $188.2 million from December 31, 2025.

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.

We continue to focus on increasing our RevPAR, maintaining appropriate expense discipline, continuing to refinance or exercise available extension options for maturing debt, continuing to evaluate our capital structure and the state of debt and equity markets, and monetizing non-strategic or underperforming owned assets.

We continue to focus on increasing our RevPAR, maintaining appropriate expense discipline, continuing to refinance or exercise available extension options for maturing debt, and continuing to evaluate our capital structure and the state of debt and equity markets.

There is no assurance that financing will continue to be available on terms consistent with our expectations or at all, or that our efforts will be successful in monetizing certain assets or exercising extension options.

3 unchanged sentences

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 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.

As of June 30, 2026, 9% of our owned communities were unencumbered by mortgage debt.

As of June 30, 2026, the current portion of long-term debt was $70.9 million, which includes $23.3 million of our 2.00% convertible senior notes due October 15, 2026.

We have completed the refinancing of all of our mortgage debt maturities due in 2027.

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.

Our inability to obtain refinancing proceeds sufficient to cover 2028 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.

Shortfalls in cash flows from estimated operating results or other principal sources of liquidity may have an adverse impact on our ability to fund our planned capital expenditures or to fund investments to support our strategy.

8 unchanged sentences

Capital Expenditures

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

Our capital expenditures for the six months ended June 30, 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.

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

The following table summarizes our capital expenditures for the six months ended June 30, 2026 for our consolidated business.

(in thousands)

4 unchanged sentences

Credit Facilities

In December 2023, we amended our revolving credit agreement with Capital One, National Association, as administrative agent and lender and the other lenders from time to time parties thereto.

The amended agreement provides an expanded commitment amount of up to $100.0 million which can be drawn in cash or as letters of credit.

The credit facility matures in January 2027, and we have the option to extend the facility for two additional terms of approximately one year each subject to the satisfaction of certain conditions.

We expect to satisfy the conditions to exercise the option to extend the facility for the first additional term.

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 0.35% per annum was applicable on the unused portion of the facility as of March 31, 2026.

In June 2026, we amended our revolving credit agreement with Capital One, National Association acting as administrative agent, and lender and the other lenders from time to time parties thereto.

The amended agreement provides an expanded commitment of up to $200.0 million, representing up to a $100 million increase, which can be drawn in cash or as letters of credit.

The credit facility matures in April 2029, and we have the option to extend the facility for two additional one-year terms, subject to the satisfaction of certain conditions.

Amounts drawn under the facility bear interest at the Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 2.25% to 2.50% based upon the percentage of the total commitment drawn.

Additionally, a quarterly commitment fee of 0.25% to 0.35% per annum is applicable based upon the percentage of the total commitment drawn.

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 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.

As of June 30, 2026, $23.0 million of borrowings and $1.4 million of letters of credit were outstanding under our $200.0 million secured credit facility, and the facility had $175.6 million of availability.

We also had separate letter of credit facilities providing up to $68.0 million of letters of credit as of June 30, 2026 under which $54.1 million had been issued as of that date.

Long-Term Leases

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

As of June 30, 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.

11 unchanged sentences

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

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.

For the six months ended June 30, 2026, our cash lease payments for our operating leases were $95.1 million and for our financing leases were $4.2 million.

For the twelve months ending June 30, 2027, we will be required to make approximately $193.9 million of cash lease payments in connection with our existing operating and financing leases.

Debt and Lease Covenants

Certain of our long-term debt and lease documents contain restrictions, maintenance and capital expenditure obligations, and financial covenants, such as those requiring us to maintain prescribed minimum liquidity and net worth levels and debt service and lease coverage ratios, and requiring us not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis.

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

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

As of June 30, 2026, our liquid assets were $390.3 million, which included $370.4 million of unrestricted cash and cash equivalents and $19.9 million of marketable securities.

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.

5 unchanged sentences

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

As of June 30, 2026, we are in compliance with the financial covenants of our debt agreements and long-term leases.

Non-GAAP Financial Measures

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2026 2025 2026 2025

29 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2026 2025 2026 2025

11 unchanged sentences

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