Brookdale Senior Living Inc. Q3 FY2025 earnings call

• Nick Stengle thanked associates, residents, and shareholders, and highlighted his background in operations and senior living. - Outlined 5 strategic priorities: improve operating performance (SWAT-team approach, new regional operating structure), optimize real estate portfolio (exited 55 leased assets by year-end, reduced portfolio to ~550 communities by mid-2026), reinvest capital ($33.4 million invested in Q3), reduce leverage (adjusted annualized leverage improved to 9.0x), and elevate quality. - SWAT-teams reduced the number of communities below 70% occupancy, and capital reinvestment was planned towards NOI-driving projects.

In the third quarter, Brookdale Senior Living achieved a consolidated weighted average occupancy of 81.8% and a same-community weighted average occupancy of 82.3%. Resident and management fees totaled $778 million, a 4.2% increase year-over-year. Adjusted EBITDA for the third quarter was $111.1 million, an increase of 20.4% compared to the prior year quarter. Year-to-date adjusted EBITDA was 22.5% higher than the prior year. Adjusted free cash flow for the quarter was $21.8 million, marking the third consecutive quarter of positive adjusted free cash flow.

• Raised full-year 2025 adjusted EBITDA guidance from $445 million to $455 million to a revised range of $455 million to $460 million. - Expect RevPAR growth in the range of 5.25% to 6%, above the midpoint. - Anticipate continued adjusted EBITDA growth and leverage reduction as the business progresses with portfolio optimization and operational improvements.

• Seasonal factors in the fourth quarter, such as flat occupancy vs third quarter, RevPOR step down, and working capital outflow. - Unforeseen storm activity impact, though current assumptions are comfortable. - Full realization of G&A savings from Ventas transitions expected in 2026, with operating income step down from divesting Ventas communities impacting the fourth quarter.

Q: Areas of opportunity in Brookdale portfolio and strategic pricing/job focus A: Nick discussed an offensive posture, organizational changes to focus on operational excellence, CapEx deployment towards NOI-driving projects, and a strategic pricing platform to optimize occupancy and profitability Q: New FFO disclosure A: Nikolas Stengle explained FFO provides perspective on Brookdale as an operating company built on a real estate foundation, offering additional insight into the company's performance relative to other real estate companies Q: Organizational change impact on G&A A: Nikolas stated G&A is reducing due to organizational restructuring, with no increased cost, and Dawn added it reflects a step down in 2026 figures including merit increases and cost of inflation Q: Occupancy gains from new seniors vs competitors A: Dawn noted strong sequential occupancy growth but didn't break out new seniors vs market share gains, while Chad mentioned improved controllable move-outs and strong resident satisfaction contributing to occupancy growth Q: Maintaining best practices with regional units A: Nikolas explained regional leaders are empowered with support from a central team, allowing nimble operation and focus on regional aspects of senior living Q: EBITDA margin growth target A: Nikolas mentioned mid-teen EBITDA growth expected over multiyear period, with more details to be shared at the Investor Day