Brookdale Senior Living Inc. Q4 FY2025 earnings call

• Excelling operationally: Hired COO Mary Sue Patchett and implemented new regional operating structure with six regional leadership teams. Created Senior Vice President of Strategic Operations role to centralize pricing, labor management, and capital investment. - Optimizing real estate portfolio: Anticipate 517 communities in consolidated portfolio by 2026. Sold 12 owned communities in 2025 and expect to sell 29 more in 2026 generating ~$200 million. - Reinvesting capital: 2025 nondevelopment CapEx $170.7 million, projecting $175–$195 million in 2026. - Reducing leverage: Adjusted annualized leverage at 8.9 times in 2025, aiming to drive to under six times by 2028. - Elevating quality: Net Promoter Score up 19 points since 2022. Expanded Brookdale Health Plus to over 180 communities. K3 turnover improved 390 basis points over two years, overall associate turnover declined in 2025.

For 2025, Brookdale Senior Living Inc. grew adjusted EBITDA 19% to $458 million. Fourth quarter occupancy achieved a weighted average of 82.5–83.5% on a same community basis, highest since Q1 2020. Consolidated communities below 70% occupancy fell from 23% to 15% in 2025. 25% of communities exceeded 90% occupancy in 2025, increasing to 34% by end of 2025. Resident fees for full year 2025 increased 2.4% to $3.0 billion, with 5.7% RevPAR growth partially offset by 3.2% decline in total average available units. Fourth quarter resident fees declined 4% over prior year, with 7.1% RevPAR increase partially offset by 10.5% reduction in total average units.

2026 RevPAR growth projected 8%–9%. Adjusted EBITDA guidance $502–$516 million, expecting mid-teens adjusted EBITDA growth from 2025 baseline. Anticipate annualized leverage to continue declining, aiming to drive leverage below six times by 2028. Refinanced 2026 and portion of 2027 mortgage debt maturities in January.

Q: Talk about progress to operating company transition and Health Plus rollout.

A: Nikolas Stengle discussed regional model, dedicated COO, Senior Vice President of Strategic Operations role for pricing, labor, and CapEx. On Health Plus, rolled out 58 communities in 2025, sees improvement in resident turnover and associate turnover.

Q: On centralized pricing strategy and CapEx.

A: In-place rate increases mid-to-high single digits, similar to two years ago. CapEx to be deployed more deliberately in markets to win, with ongoing real estate capital reinvestment.

Q: On occupancy bands and CapEx for 70-80% band.

A: SWAT teams focus on 70-80% band, with efforts on CapEx, pricing, and associate turnover.

Q: On impact of winter storms on occupancy.

A: Winter storm impacted January occupancy, but February move-ins already ahead, with Q1 progressing nicely.

Q: On CapEx spend and resident acuity.

A: CapEx to be targeted, with acuity levels balancing out as resident turnover rate decreases and length of stay increases