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What changed in Brookdale Senior Living Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Brookdale Senior Living Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+329 added−391 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-19)

Top changes in Brookdale Senior Living Inc.'s 2025 10-K

329 paragraphs added · 391 removed · 290 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

88 edited+17 added−48 removed127 unchanged
Biggest changeWe expect to fund the acquisition of the five communities through proceeds from mortgage financing and cash on hand. Community Lease Amendments Ventas Lease Amendment 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 lease 120 communities (10,180 units).
Biggest change(“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) previously subject to a maturity of December 31, 2025.
Some of the laws and regulations that impact our industry include: state and local laws impacting licensure, protecting consumers against unfair and deceptive trade practices, and generally affecting the communities' management of property and equipment and how we otherwise conduct our operations, such as fire, health, safety, and privacy laws and regulations; federal and state laws governing Medicare and Medicaid, which regulate reimbursable costs, rates, quality of services, quality of care, food service, resident rights (including abuse and neglect) and fraud; federal and state residents' rights statutes and regulations; anti-kickback and physician self-referral ("Stark") laws; safety and health standards set by the Occupational Safety and Health Administration; and federal, state, and local employment-related laws and regulations.
Some of the laws and regulations that impact our industry include: state and local laws impacting licensure, protecting consumers against unfair and deceptive trade practices, and generally affecting the communities' management of property and equipment and how we otherwise conduct our operations, such as fire, health, safety, and privacy laws and regulations; federal and state laws governing Medicare and Medicaid, which regulate reimbursable costs, rates, quality of services, quality of care, food service, resident rights (including abuse and neglect) and fraud; federal and state residents' rights statutes and regulations; anti-kickback and physician self-referral ("Stark") laws; safety and health standards set by the Occupational Safety and Health Administration ("OSHA"); and federal, state, and local employment-related laws and regulations.
Loss, suspension, or modification of a license may also cause us to default under our debt and lease documents and/or trigger cross-defaults. Sanctions may be taken against providers or facilities without regard to the providers' or facilities' history of compliance. In addition, states' Attorneys General vigorously enforce consumer protection laws as those laws relate to the senior living industry.
Loss, suspension, or modification of a community license may also cause us to default under our debt and lease documents and/or trigger cross-defaults. Sanctions may be taken against providers or facilities without regard to the providers' or facilities' history of compliance. In addition, states' Attorneys General vigorously enforce consumer protection laws as those laws relate to the senior living industry.
Due to the scale of residents we serve, our organization is uniquely positioned to collaborate with large hospitals, healthcare systems, and nationwide provider groups. In today’s healthcare landscape, where value-based care is a priority, providers seek strategic partners to close gaps in care and ensure individuals receive the services they need.
Due to the scale of residents we serve, our organization is uniquely positioned to collaborate with large hospitals, healthcare systems, and nationwide provider groups. 11 In today’s healthcare landscape, where value-based care is a priority, providers seek strategic partners to close gaps in care and ensure individuals receive the services they need.
With respect to our participation in federal healthcare reimbursement programs, the government or private individuals acting on behalf of the 17 government may bring an action under the False Claims Act alleging that a healthcare provider has defrauded the government and seek treble damages for false claims and the payment of additional monetary civil penalties.
With respect to our participation in federal healthcare reimbursement programs, the government or private individuals acting on behalf of the government may bring an action under the False Claims Act alleging that a healthcare provider has defrauded the government and seek treble damages for false claims and the payment of additional monetary civil penalties.
We will continue to leverage and grow our Brookdale brand to win locally in the markets we serve. Human Capital Resources Our Associates We are dedicated to enriching the lives of those we serve with compassion, respect, excellence, and integrity. We know that our success is dependent on attracting, engaging, developing, and retaining the best associates.
We will continue to leverage and grow our Brookdale brand to win locally in the markets we serve. 13 Human Capital Resources Our Associates We are dedicated to enriching the lives of those we serve with compassion, respect, excellence, and integrity. We know that our success is dependent on attracting, engaging, developing, and retaining the best associates.
The majority of our units are organized in campus-like settings or stand-alone communities offering multiple service levels. Independent Living Communities Our independent living communities are primarily designed for middle to upper income seniors who desire to live in a residential setting that feels like home, without the efforts of ownership.
The majority of our units are organized in campus-like settings or stand-alone communities offering multiple service levels. 9 Independent Living Communities Our independent living communities are primarily designed for middle to upper income seniors who desire to live in a residential setting that feels like home, without the efforts of ownership.
Partially as a result of tax law changes enacted through REIT Investment Diversification and Empowerment Act ("RIDEA"), we compete more directly with the various publicly-traded healthcare REITs for the acquisition of senior housing properties, the largest of which are Ventas, Inc. and Welltower Inc.
Partially as a result of tax law changes enacted through REIT Investment Diversification and Empowerment Act ("RIDEA"), we compete more directly with the various publicly-traded healthcare REITs for the acquisition of senior housing properties, the largest of which are Welltower and Ventas.
These committees promote resident involvement and satisfaction and enable community management to be more responsive to their residents' needs and desires. 14 Marketing and Sales Our marketing efforts are intended to create awareness of our brand and services to educate prospects and referral sources about the Brookdale difference.
These committees promote resident involvement and satisfaction and enable community management to be more responsive to their residents' needs and desires. Marketing and Sales Our marketing efforts are intended to create awareness of our brand and services to educate prospects and referral sources about the Brookdale difference.
Unannounced surveys or inspections may occur annually, bi- or tri-annually, or following a regulator's receipt of a complaint about a provider. From time to time in the ordinary course of business, we receive survey reports from state or federal regulatory bodies citing deficiencies resulting from such inspections or surveys.
Unannounced surveys or inspections may occur annually, bi- or tri-annually, or following a regulator's receipt of a complaint about a provider. From time to time in the ordinary course of business, we receive survey reports from state or federal 15 regulatory bodies citing deficiencies resulting from such inspections or surveys.
Such laws may impose liability for improper handling or a release to the environment of asbestos-containing materials and potential asbestos-containing materials and may provide for fines to, and for third parties to seek recovery from, owners or operators of real properties for personal injury or improper work exposure associated with asbestos-containing materials and potential asbestos-containing materials.
Such laws may impose liability for improper handling or a release to the environment of asbestos-containing materials 18 and potential asbestos-containing materials and may provide for fines to, and for third parties to seek recovery from, owners or operators of real properties for personal injury or improper work exposure associated with asbestos-containing materials and potential asbestos-containing materials.
We seek to ensure that our communities are staffed with the appropriate mix of full and part-time associates. By increasing the number of shifts staffed with our full- and part-time associates rather than contract labor, our contract labor costs have returned to pre-pandemic inflation-adjusted levels.
We continuously seek to ensure that our communities are staffed with the appropriate mix of full and part-time associates. By increasing the number of shifts staffed with our full- and part-time associates rather than contract labor, our contract labor costs have returned to pre-pandemic inflation-adjusted levels.
Some of our communities generate infectious or other hazardous medical waste due to the illness or physical condition of the residents, including, for example, blood-contaminated bandages, swabs and other medical waste products, and incontinence 19 products of those residents diagnosed with an infectious disease.
Some of our communities generate infectious or other hazardous medical waste due to the illness or physical condition of the residents, including, for example, blood-contaminated bandages, swabs and other medical waste products, and incontinence products of those residents diagnosed with an infectious disease.
Our senior management team has extensive experience in the senior living industry, including operating and managing a broad range of senior living assets, and related healthcare, hospitality, and real estate experience. 12 • Geographically diverse, high-quality, purpose-built communities .
Our senior management team has extensive experience in the senior living industry, including operating and managing a broad range of senior living assets, and related healthcare, hospitality, and real estate experience. • Geographically diverse, high-quality, purpose-built communities .
Since the record low occupancy in 2021, NIC data shows that senior housing occupancy has returned to pre-pandemic levels through greater demand than historical levels, coupled with low inventory growth .
Since the record low occupancy in 2021, NIC 7 data shows that senior housing occupancy has returned to pre-pandemic levels through greater demand than historical levels, coupled with low inventory growth.
Segments As of December 31, 2024, we had three reportable segments: Independent Living; Assisted Living and Memory Care; and CCRCs. These segments were determined based on the way that our chief operating decision maker organizes our business activities for making operating decisions, assessing performance, developing strategy, and allocating capital resources.
Segments As of December 31, 2025, we had three reportable segments: Independent Living; Assisted Living and Memory Care; and CCRCs. These segments were determined based on the way that our chief operating decision maker organizes our business activities for making operating decisions, assessing performance, developing strategy, and allocating capital resources.
Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 20 to our consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data." Our Community Offerings We offer a variety of senior living communities in locations across the United States. We operate and manage independent living, assisted living, memory care, and continuing care retirement communities.
Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 19 to our consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data." Our Community Offerings We offer a variety of senior living communities in locations across the United States. We operate and manage independent living, assisted living, memory care, and continuing care retirement communities.
Additionally, since we operate communities that participate in federal and/or state healthcare reimbursement programs, we are subject to federal and state laws that prohibit anyone from presenting, or causing to be presented, claims for reimbursement which are false, fraudulent, or are for items or services that were not provided as claimed. Similar state laws vary from state to state.
Additionally, because we operate communities that participate in federal and/or state healthcare reimbursement programs, we are subject to federal and state laws that prohibit anyone from presenting, or causing to be presented, claims for reimbursement which are false, fraudulent, or are for items or services that were not provided as claimed. Similar state laws vary from state to state.
Certain current state laws and regulations allow enforcement officials to make determinations on whether the care provided by one or more of our communities exceeds the level of care for which the community is licensed. Furthermore, certain states may allow citations in one community to impact other communities in the state.
Certain current state laws and regulations allow enforcement officials to make determinations on whether the care provided by one or more of our communities exceeds the level of care for which the community is licensed. Furthermore, certain states may allow citations in one provider or community to impact other providers or communities in the state.
In 2014, we completed our acquisition of Emeritus Corporation through a merger, which was the then-second largest operator of senior living communities in the United States. Since our acquisition of Emeritus, we have disposed of over 380 communities through sales of owned communities and terminations of triple-net lease obligations.
In 2014, we completed our acquisition of Emeritus Corporation through a merger, which was the then-second largest operator of senior living communities in the United States. Since our acquisition of Emeritus, we have disposed of over 450 communities through sales of owned communities and terminations of triple-net lease obligations.
The Health Insurance Portability and Accountability Act of 1996, or HIPAA, and the Balanced Budget Act of 1997 expanded the penalties for healthcare fraud.
The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and the Balanced Budget Act of 1997 expanded the penalties for healthcare fraud.
Revocation or suspension of a license, or a citation, at a given community could therefore impact our ability to obtain new licenses or to renew existing licenses at other communities, which may also cause us to be in default under our loan or lease agreements and trigger cross-defaults or may also trigger defaults under certain of our credit agreements, or adversely affect our ability to operate and/or obtain financing in the future.
Revocation or suspension of a license, or a citation, at a given provider or community could therefore impact our ability to obtain new licenses or to renew existing licenses at other locations, which may also cause us to be in default under our loan or lease agreements and trigger cross-defaults or may also trigger defaults under certain of our credit agreements, or adversely affect our ability to operate and/or obtain financing in the future.
While the number varies depending upon the particular community, as of December 31, 2024 approximately 80% of all of the units at our independent living communities were independent living units, with the balance of the units operating as licensed assisted living and memory care units.
While the number varies depending upon the particular community, as of December 31, 2025 approximately 80% of all of the units at our independent living communities were independent living units, with the balance of the units operating as licensed assisted living and memory care units.
Regulation Against Fraud, Abuse, and False Claims There are various extremely complex federal and state laws governing a wide array of referrals, relationships, and arrangements and prohibiting fraud by healthcare providers, including those in the senior living industry, and governmental agencies are devoting increasing attention and resources to such anti-fraud initiatives.
Regulation Against Fraud, Abuse, and False Claims There are various extremely complex federal and state laws governing a wide array of referrals, relationships, and arrangements and prohibiting fraud by healthcare providers, including those in the senior living industry, and governmental agencies are devoting increasing, and, in some case, significant, attention and resources to such anti-fraud initiatives.
In 2024, approximately half of our eligible full-time associates participated in our medical plans. We also know maintaining overall well-being is important, which is why we offer benefits to cover a spectrum of needs. For example, all associates have access to free short-term counseling and well-being coaching.
In 2025, approximately half of our eligible full-time associates participated in our medical plans. 14 We also know maintaining overall well-being is important, which is why we offer benefits to cover a spectrum of needs. For example, all associates have access to free short-term counseling and well-being coaching.
All residents at our assisted living and memory care communities are eligible to receive the basic care level, which includes ongoing health assessments, three meals per day and snacks, coordination of special diets planned by a registered dietitian, 24-hour staff assistance, assistance with medical care coordination, education and wellness programs, social and recreational activities providing socialization and engagement, housekeeping, and personal laundry services.
All residents at our assisted living and memory care communities are eligible to receive the basic care level, which includes ongoing health assessments, three meals per day and snacks, coordination of special diets planned by a registered dietitian, 24-hour staff assistance, assistance with medical care coordination, education and wellness programs, social and recreational activities designed for engagement, housekeeping, and personal laundry services.
The table below shows the number of communities and units within each of our senior housing segments and the All Other category as of December 31, 2024.
The table below shows the number of communities and units within each of our senior housing segments and the All Other category as of December 31, 2025.
If a state were to find that one community's citation will impact another of our communities, this will also increase costs and result in increased surveillance by the state survey agency.
If a state were to find that one community's or agency’s citation will impact another of our communities or agencies, this will also increase costs and result in increased surveillance by the state survey agency.
We also plan to continue to explore additional products and services that we may offer to our residents or to seniors living outside of our communities and, in the longer term where opportunities arise, we would expect to pursue development, investment, and acquisition opportunities to further enhance and grow our senior living portfolio. • Enhance healthcare and wellness.
We also plan to continue to explore additional products and services that we may offer to our residents or to seniors living outside of our communities and, where opportunities arise, we would expect to pursue development, investment, and acquisition opportunities to further enhance and grow our senior living portfolio. • Enhance healthcare and wellness.
As of December 31, 2024, we operated a nationwide base of 647 communities in 41 states. • Ability to provide a broad spectrum of care . Given our diverse mix of independent living, assisted living, memory care, and CCRCs communities, we are able to meet a wide range of our residents' needs.
As of December 31, 2025, we operated a nationwide base of 584 communities in 41 states. • Ability to provide a broad spectrum of care . Given our diverse mix of independent living, assisted living, memory care, and CCRCs communities, we are able to meet a wide range of our residents' needs.
The information within, or that can be accessed through, our website addresses is not part of this report. 20
The information within, or that can be accessed through, our website addresses is not part of this report. 19
As of December 31, 2024, we employed approximately 36,000 associates, 68% of whom were full-time. Approximately 1,400 centralized and regional community support associates support our community-based associates. During 2024, we continued to focus on hiring the best associates and reducing turnover in order to decrease our use of more expensive premium labor.
As of December 31, 2025, we employed approximately 33,000 associates, 68% of whom were full-time. Approximately 1,300 centralized and regional community support associates support our community-based associates. During 2025, we continued to focus on hiring the best associates and reducing turnover in order to decrease our use of more expensive premium labor.
Our Business We are the nation's premier operator of senior living communities, operating and managing 647 communities in 41 states as of December 31, 2024, with the ability to serve approximately 58,000 residents. We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry.
Our Business We are the nation's premier operator of senior living communities, operating and managing 584 communities in 41 states as of December 31, 2025, 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.
In several of the states in which we operate, or intend to operate, assisted living and memory care communities or skilled nursing facilities require a certificate of need before a community may be opened or the services at an existing community may be expanded.
In several of the states in which we operate assisted living and memory care communities, skilled nursing facilities or home care agencies require a certificate of need before a community or agency may be opened or the services at an existing community may be expanded.
NIC data shows that new construction starts and openings for the senior housing industry have decreased significantly for 2023 and 2024 compared to the peaks in the decade prior to the start of the COVID-19 pandemic.
NIC data shows that new construction starts and openings for the senior housing industry have decreased significantly in recent years compared to the decade prior to the start of the COVID-19 pandemic.
According to data from the National Investment Center for the Seniors Housing & Care Industry ("NIC"), there were approximately 2,500 local and regional senior housing operators as of December 31, 2024, of which approximately 90% operated five or fewer communities.
According to data from the National Investment Center for the Seniors Housing & Care Industry ("NIC"), there were approximately 2,400 local and regional senior housing operators in the United States as of December 31, 2025, of which approximately 90% operated five or fewer communities.
We are the largest of a limited number of operators that provide a broad range of community locations and service level offerings at varying price levels. The industry attracted additional investment in the last decade, prior to the start of the COVID-19 pandemic, which resulted in increased construction and development of new senior housing supply.
We are the largest of a limited number of operators that provide a broad range of community locations and service level offerings at varying price levels. The industry attracted additional investment in the previous decade which resulted in increased construction and development of new senior housing supply.
As we continue to focus on returning to, and then exceeding, our pre-pandemic results, in the near and longer term, we also intend to (i) exit certain non-strategic or underperforming owned assets when possible, (ii) exit or restructure underperforming leases as we approach lease maturity, where possible, (iii) expand our footprint and services in core markets where we have, or can achieve, a clear leadership position, and (iv) explore further growth opportunities, such as opportunistic acquisitions (including potential acquisitions of currently leased assets) and other expansions of our senior living business, subject to capital availability.
As we continue to focus on driving organic growth in our business, in the near and longer term, we also intend to (i) exit certain non-strategic or underperforming owned assets when possible, (ii) exit or restructure underperforming leases as we approach lease maturity, where possible, (iii) expand our footprint and services in certain core markets, and (iv) explore further growth opportunities, such as opportunistic acquisitions (including potential acquisitions of currently leased assets) and other expansions of our senior living business, subject to capital availability.
As an example, we expanded our Brookdale HealthPlus® program to a growing number of assisted living communities in certain markets. Brookdale HealthPlus®, which is a community-based, technology-enabled, proactive care coordination program, is designed to help improve residents' quality of life through evidence-based preventative care coordination.
As an example, we have expanded our Brookdale HealthPlus® program to a growing number of communities in certain markets. Brookdale HealthPlus®, which is a community-based, technology-enabled, proactive care coordination program, is designed to help improve residents' quality of life through evidence-based preventative care coordination. We believe our Brookdale HealthPlus® program can be a key differentiator for Brookdale in the market.
Our owned communities generated 58.8% of our resident fee revenue, and our leased communities generated 41.2% of our resident fee revenue. The table below shows the percentage of our resident fee and management fee revenue attributable to each of our segments or All Other category for the year ended December 31, 2024.
Our owned communities generated 66.5% of our resident fee revenue, and our leased communities generated 33.5% of our resident fee revenue. The table below shows the percentage of our resident fee and management fee revenue attributable to each of our segments or All Other category for the year ended December 31, 2025.
Diversified Healthcare Trust Portfolio Acquisition In September 2024, we entered into a definitive agreement to acquire 25 senior living communities (875 units) that, as of December 31, 2024, we leased from Diversified Healthcare Trust for a purchase price of $135.0 million.
Recent Developments Community Acquisitions Diversified Healthcare Trust Portfolio Acquisition 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.
We expect RevPAR will continue to be driven by both occupancy and RevPOR (as defined below) growth, propelled by (i) our strategic priorities, (ii) accelerating growth within our target demographic, and (iii) significantly lower supply growth.
We expect RevPAR will continue to be driven by both occupancy and RevPOR (as defined below) growth, propelled by (i) our strategic priorities, (ii) accelerating growth within our target demographic, and (iii) significantly lower supply growth. As occupancy grows, we anticipate benefiting from operating leverage, resulting in improving margins.
Residents with physical frailties and higher level service needs can often be accommodated with supplemental services in their own units or, in certain communities, are cared for in a more structured and supervised environment on a separate wing or floor.
Residents with physical frailties and higher level service needs can often be accommodated with supplemental services in their own units or, in certain communities, are cared for in a more structured and supervised environment on a separate wing or floor. These communities also generally have dedicated assisted living associates and separate assisted living dining rooms and activity areas.
Management Services As of December 31, 2024, we managed a total of 28 communities (4,256 units) on behalf of others, which represented 8% of our senior housing capacity.
Management Services As of December 31, 2025, we managed a total of 36 communities (4,374 units) on behalf of others, which represented 9% of our senior housing capacity.
We have also established company-wide policies and procedures relating to, among other things: resident care; community design and community operations; billing and collections; accounts payable; finance and accounting; risk management; development of associate training materials and programs; advertising and marketing activities; the hiring and training of management and other community-based personnel; compliance with applicable local and state regulatory requirements; and implementation of our acquisition, development, and leasing plans.
We have also established company-wide policies and procedures relating to, among other things: resident care; community design and community operations; billing and collections; accounts payable; finance and accounting; risk management; development of associate training materials and programs; advertising and marketing activities; the hiring and training of management and other community-based personnel; compliance with applicable local and state regulatory requirements; and implementation of our acquisition, development, and leasing plans. 12 Community Staffing and Training Each community has an Executive Director responsible for the overall day-to-day operations of the community, including the community's associate relations, resident and family engagement and connection, financial performance, and regulatory compliance.
In addition to internal development opportunities, we have also developed a program to build business acumen skills to drive improved community performance, and associates continue to have opportunities for professional development through our advanced fee and tuition assistance programs. 15 Retention We believe the performance of our individual communities and of our company as a whole are correlated to retention of our key community leaders.
In addition to internal development opportunities, we have also developed a program to build business acumen skills to drive improved community performance, and associates continue to have opportunities for professional development through our advanced fee and tuition assistance programs.
As of December 31, 2024, we provide memory care services at 336 of our communities, aggregating 8,962 memory care units across our segments. These communities include 107 freestanding memory care communities with 4,158 units included in our Assisted Living and Memory Care segment.
As of December 31, 2025, we provide memory care services at 312 of our communities, aggregating 8,353 memory care units across our segments. These communities include 100 freestanding memory care communities with 3,854 units included in our Assisted Living and Memory Care segment.
We expect to fund the acquisition of the 25 communities through proceeds from mortgage financing and cash on hand. Welltower Portfolio Acquisition In September 2024, we entered into a definitive agreement to acquire five senior living communities (686 units) that are currently leased by us from Welltower for a purchase price of $175.0 million.
Welltower Portfolio Acquisition 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. ("Welltower") 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.
Over the long term we plan to evaluate and, where opportunities arise, pursue development, investment, and acquisition opportunities. The market for acquiring and/or operating senior living communities is highly competitive, and some of our present and potential senior living competitors have, or may obtain, greater financial resources than us and may have a lower cost of capital.
The market for acquiring and/or operating senior living communities is highly competitive, and some of our present and potential senior living competitors have, or may obtain, greater financial resources than us and may have a lower cost of capital.
Medicare and Medicaid reimbursements represented 15.5% of our CCRCs segment's resident fee revenue during such period. Medicare is a federal program that provides certain hospital and medical insurance benefits to persons age 65 and over and certain disabled persons. We receive revenue for our skilled nursing services from Medicare.
Medicare is a federal program that provides certain hospital and medical insurance benefits to persons age 65 and over and certain disabled persons. We receive revenue for our skilled nursing services from Medicare.
We are unable to predict the future course of federal, state, and local legislation or regulation. Changes in the regulatory framework could have a material adverse effect on our business. 16 State and Local Regulation and Licensing Many senior living communities are subject to regulation and licensing by state and local health and social service agencies and other regulatory authorities.
We are unable to predict the future course of federal, state, and local legislation or regulation. Changes in the regulatory framework could have a material adverse effect on our business.
Our History Brookdale Senior Living Inc. was formed as a Delaware corporation in June 2005 for the purpose of combining two leading senior living operating companies, Brookdale Living Communities, Inc. and Alterra Healthcare Corporation, which had been operating independently since 1986 and 1981, respectively.
Additionally, such REITs may have the ability to directly compete in the management of certain independent living facilities as a result of recent IRS rulings. 8 Our History Brookdale Senior Living Inc. was formed as a Delaware corporation in June 2005 for the purpose of combining two leading senior living operating companies, Brookdale Living Communities, Inc. and Alterra Healthcare Corporation, which had been operating independently since 1986 and 1981, respectively.
Further, we believe our centralized community support infrastructure allows our community-based leaders and personnel to focus on resident care and family connections. 13 Community Support Functions We have developed a centralized support infrastructure and services platform, which we believe provides us with a significant operational advantage over local and regional operators of senior living communities.
Community Support Functions We have developed a centralized support infrastructure and services platform, which we believe provides us with a significant operational advantage over local and regional operators of senior living communities.
Violation of any of these laws can result in loss of licensure, citations, sanctions, and other criminal or civil fines and penalties, the refund of overpayments, payment suspensions, or termination of participation in Medicare and Medicaid programs, which may also cause us to default under our debt and lease documents and/or trigger cross-defaults.
Violation of any of these laws can result in loss of licensure, citations, sanctions, and other criminal or civil fines and penalties, the refund of overpayments, payment suspensions, or termination of participation in Medicare and Medicaid programs, which may also cause us to default under our debt and lease documents and/or trigger cross-defaults. 16 Anti-Kickback Regulation We are subject to certain federal and state laws that regulate financial arrangements by healthcare providers, such as the federal Anti-Kickback Statute, the Stark laws, and certain state referral laws.
The Medicare and Medicaid reimbursement programs are highly regulated, involve significant administrative discretion, and are subject to frequent and substantial legislative, administrative, and interpretive changes, which may significantly affect reimbursement rates and the methods and timing of payments made under these programs.
In addition, Medicaid reimbursement can be impacted negatively by state budgetary pressures, which may lead to reduced reimbursement or delays in receiving payments. 17 The Medicare and Medicaid reimbursement programs are highly regulated, involve significant administrative discretion, and are subject to frequent and substantial legislative, administrative, and interpretive changes, which may significantly affect reimbursement rates and the methods and timing of payments made under these programs.
Due to demographic trends, and continuing advances in science, nutrition, and healthcare, the senior population will continue to grow. U.S. Census projections suggest that there will be over one million new potential residents per year for the next decade, and we believe that demand for senior care will increase as a result.
Census projections suggest that there will be over one million new potential residents per year for the next decade, and we believe that demand for senior care will increase as a result.
(in thousands) Resident Fee and Management Fee Revenue % of Total Independent Living $ 598,922 20.1 % Assisted Living and Memory Care 2,038,660 68.3 % CCRCs 334,468 11.2 % All Other 10,521 0.4 % Total resident fee and management fee revenue $ 2,982,571 100.0 % Further operating results and financial metrics from our three reportable segments are discussed further in "Item 7.
(in thousands) Resident Fee and Management Fee Revenue % of Total Independent Living $ 593,813 19.4 % Assisted Living and Memory Care 2,103,303 68.9 % CCRCs 345,596 11.3 % All Other 10,853 0.4 % Total resident fee and management fee revenue $ 3,053,565 100.0 % Further operating results and financial metrics from our three reportable segments are discussed further in "Item 7.
We compete with numerous organizations, including not-for-profit entities, that offer similar communities and services, community-based service programs, retirement communities, convalescent centers, and other senior living providers. In general, regulatory and other barriers to competitive entry in the independent living, assisted living, and memory care sectors of the senior living industry are not substantial.
Competition The senior living industry is highly competitive. We compete with numerous organizations, including not-for-profit entities, that offer similar communities and services, community-based service programs, retirement communities, convalescent centers, and other senior living providers.
Our quality assurance programs are designed to achieve a high degree of resident and family member satisfaction through the care and services that we provide. Our quality control measures include, among other things, community inspections conducted by community support associates on a regular basis.
Quality Assurance We maintain quality assurance programs at each of our communities overseen by our community support associates. Our quality assurance programs are designed to achieve a high degree of resident and family member satisfaction through the care and services that we provide.
For an additional cost at these communities, we offer higher levels of personal care services to residents who are more physically frail or require more frequent or intensive physical assistance or increased personal care and supervision due to cognitive impairments.
For an additional cost at these communities, we offer higher levels of personal care services to residents who are more physically frail or require more frequent or intensive physical assistance or increased personal care and supervision due to cognitive impairments. 10 As a result of their progressive cognitive decline, residents at our memory care units typically require higher levels of personal care and services than in assisted living and therefore pay higher monthly service fees.
There is a growing consumer awareness among seniors and their families regarding the types of services provided by senior living operators, which has further contributed to the demand for senior living services.
There is a growing consumer awareness among seniors and their families regarding the types of services provided by senior living operators, which has further contributed to the demand for senior living services. Additional challenges in our industry include increased state and local regulation have led to an increase in the cost of doing business.
Residents typically enter an assisted living or memory care community due to a relatively immediate need for services that may have been triggered by a medical event. Our assisted living and memory care communities include both freestanding, multi-story communities with more than 50 units, as well as smaller, freestanding, single story communities.
Assisted Living and Memory Care Communities Our assisted living and memory care communities offer housing and 24-hour assistance with ADLs for our residents. Residents typically enter an assisted living or memory care community due to a relatively immediate need for services that may have been triggered by a medical event.
We also actively work to partner with nursing schools, nationally and locally, to recruit nursing students to work in assisted living.
We actively partner with nursing schools, both nationally and locally, to encourage nursing students to pursue careers in assisted living and skilled nursing settings.
Our 2024 annual incentive plan included the strategic objective of retaining key community leadership (Executive Directors, Health and Wellness Directors, and Sales Directors) in our same community portfolio. As a result of our retention initiatives, our retention of key community leaders in our same community portfolio increased for 2024 compared to 2023.
Retention We believe the performance of our individual communities and of our Company as a whole are directly correlated to the retention of our key community leaders. Our 2025 annual incentive plan included the strategic objective of retaining key community leadership (Executive Directors, Health and Wellness Directors, and Sales Directors) in our same community portfolio.
Furthermore, any failure to comply with these laws can result in significant protracted litigation, government investigation, penalties, or other damages which could harm our reputation and have a material adverse effect on our business. 18 Medicare and Medicaid Programs Reimbursements from Medicare and Medicaid represented 1.3% and 3.5%, respectively, of our consolidated resident fee revenue for the year ended December 31, 2024.
Furthermore, any failure to comply with these laws can result in significant protracted litigation, government investigation, penalties, or other damages which could harm our reputation and have a material adverse effect on our business.
We believe successful execution of this strategy provides the best opportunity to create attractive long-term stockholder value. We are focused on priorities that will position us for growth and capitalize on positive trends in demand demographics, customer preferences, and lower new supply in the industry, while using our unique Brookdale differentiators and scale to our advantage.
We intend to enrich lives and drive value for our residents, families, associates, and stockholders and are focused on operational excellence that will position us for growth and capitalize on positive trends in demand demographics, customer preferences, and lower new supply in the industry, while using our unique Brookdale differentiators and scale to our advantage.
In addition, a portion of each Executive Director's compensation is directly based on the operating performance of the community, community associate turnover, and resident and family satisfaction. We continue to take actions intended to simplify the role of our Executive Director to allow them to focus on our residents and their families and our associates.
Each Executive Director receives specialized training developed by our learning and development associates. In addition, a portion of each Executive Director's compensation is directly based on the operating performance of the community, community associate turnover, and resident and family satisfaction.
We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). As of December 31, 2024, we owned 353 communities (32,206 units), leased 266 communities (18,633 units), and managed 28 communities (4,256 units).
We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). As of December 31, 2025, we owned 370 communities (33,262 units), leased 178 communities (10,608 units), and managed 36 communities (4,374 units).
In addition, full-time associates enrolled in one of our medical plans can receive a wellness incentive for completing their annual physical. Associates enrolled in a Brookdale medical plan are also eligible to participate in a free coach-led digital program for weight loss, diabetes management and reversal, as well as chronic back, knee, or hip pain.
Associates enrolled in a Brookdale medical plan are also eligible to participate in a free coach-led digital program for weight loss, diabetes management and reversal, digestive health, menopause, as well as chronic back, knee, or hip pain. We also recognize the importance of financial wellbeing, which is why we offer access to a financial wellness program for all associates.
The regulatory environment continues to intensify in the number and types of laws and regulations affecting us, accompanied by increased enforcement activity by state and local officials.
The regulatory environment continues to intensify in the number and types of laws and regulations affecting us, accompanied by increased enforcement activity by state and local officials. In addition, there continue to be various federal and state legislative and regulatory proposals to implement cost containment measures that would limit payments to healthcare providers in the future.
We believe that quality of care and operating efficiency can be maximized through direct resident and associate interaction. Associates involved in resident care, including administrative associates, are trained in support and care protocols, including emergency response techniques. We have adopted formal training and evaluation procedures to help ensure quality care for our residents.
Associates involved in resident care, including administrative associates, are trained in support and care protocols, including emergency response techniques. We have adopted formal training and evaluation procedures to help ensure quality care for our residents. We have comprehensive policy and procedure manuals and hold regular training sessions for management and non-management associates at each community.
Our major senior housing competitors include Atria Senior Living Inc., Life Care Services, LLC, Discovery Senior Living, LLC, Erickson Senior Living, LLC, and Sunrise Senior Living, LLC and multiple regional providers with large localized market presence, as well as a large number of not-for-profit entities.
Our major senior housing competitors include Discovery Senior Living, Erickson Senior Living, LCS, and multiple regional providers with large localized market presence, as well as a large number of not-for-profit entities. Over the long term we plan to evaluate and, where opportunities arise, pursue development, investment, and acquisition opportunities.
Refer to Note 7 to the consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data" for additional information on our recent debt financing and refinancing transactions.
Through these transactions, we refinanced all of our $346.3 million remaining 2026 mortgage debt maturities and $190.7 million of our 2027 mortgage debt maturities, while further strengthening our balance sheet. Refer to Note 7 to the consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data" for additional information on our recent mortgage debt financing transactions.
Communities Units % of Total Units Average Number of Units per Community Independent Living 68 12,581 22.8 % 185 Assisted Living and Memory Care 534 33,524 60.8 % 63 CCRCs 17 4,734 8.6 % 278 All Other 28 4,256 7.8 % 152 Total 647 55,095 100.0 % 85 10 For the year ended December 31, 2024, we generated 93.8% of our resident fee revenue from private pay residents, 4.8% from government reimbursement programs (primarily Medicaid and Medicare), and 1.4% from other payor sources.
Communities Units % of Total Units Average Number of Units per Community Independent Living 53 9,137 18.9 % 172 Assisted Living and Memory Care 480 30,553 63.3 % 64 CCRCs 15 4,180 8.7 % 279 All Other 36 4,374 9.1 % 122 Total 584 48,244 100.0 % 83 For the year ended December 31, 2025, we generated 93.9% of our resident fee revenue from private pay residents, 4.8% from government reimbursement programs (primarily Medicaid and Medicare), and 1.3% from other payor sources.
Operations Operations Overview We have implemented intensive standards, policies and procedures, and systems, including detailed associate resources and training, which we believe have contributed to high levels of customer service.
Operations Operations Overview We have implemented intensive standards, policies and procedures, and systems, including detailed associate resources and training, which we believe have contributed to high levels of customer service. Further, we believe our centralized community support infrastructure allows our community-based leaders and personnel to focus on resident care and family connections. We recently introduced a new operating structure.
The Health and Wellness Director or nursing director is directly responsible for day-to-day care of our assisted living, memory care, and skilled nursing residents. The Sales Director oversees the community's sales, marketing, and community outreach programs. Other key positions supporting each community may include individuals responsible for dining services, healthcare services, resident activities, housekeeping, transportation, and maintenance.
The Sales Director oversees the community's sales, marketing, and community outreach programs. Other key positions supporting each community may include individuals responsible for dining services, healthcare services, resident activities, housekeeping, transportation, and maintenance. We believe that quality of care and operating efficiency can be maximized through direct resident and associate interaction.
We believe engaged associates, who are committed to our mission and culture, lead to an enhanced resident experience, higher retention, and ultimately improved operations that drive accelerated growth. Through this strategic priority, we intend to deliver continued favorable progress toward our goal of reducing associate turnover and extending length of employment with Brookdale.
Through this strategic priority, we intend to deliver continued favorable progress toward our goal of reducing associate turnover and extending length of employment with Brookdale.
We are a learning organization that uses multiple tools to obtain feedback from residents, their families, and our associates to improve our services to meet the changing needs of residents.
We are a learning organization that uses multiple tools to obtain feedback from residents, their families, and our associates to improve our services to meet the changing needs of residents. As we lengthen our associates' tenure, we believe this will translate into an even better resident experience. • Operational excellence, resulting in increased revenue, disciplined expense management, and accelerated growth.
Through our targeted sales and marketing efforts, we plan to drive increased move-ins through enhanced outreach with impactful points of differentiation based on quality, clinical and healthcare expertise, a portfolio of choices, and high-quality, personalized service delivered by caring and engaged associates. • Attract, engage, develop, and retain the best associates. Brookdale’s culture is one of people serving people.
Through our targeted sales and marketing efforts, we plan to drive increased move-ins through enhanced outreach with impactful points of differentiation based on quality, clinical and healthcare expertise, a portfolio of choices, and high-quality, personalized service delivered by caring and engaged associates. 5 The above priorities coupled with robust supply-demand fundamentals are intended to provide long-term returns to our stockholders by driving organic growth through focusing on growing RevPAR (as defined below), Adjusted EBITDA (as defined below), and cash flow.
We believe that the quality of our communities, coupled with support provided by our community support infrastructure has enabled us to attract high-quality, professional community Executive Directors. Depending upon the size and type of the community, each Executive Director is supported by key leaders, a Health and Wellness Director (or nursing director), and/or a Sales Director.
We continue to take actions intended to simplify the role of our Executive Director to allow them to focus on our residents and their families and our associates. We believe that the quality of our communities, coupled with support provided by our community support infrastructure has enabled us to attract high-quality, professional community Executive Directors.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeDue to lower operating performance for certain of our communities resulting from the COVID-19 pandemic, during 2021 and 2022 we sought and obtained non-agency mortgage financings to partially refinance maturing Freddie Mac and Fannie Mae indebtedness. We cannot provide assurance that such non-agency mortgage financing will continue to be available as an alternative to Fannie Mae and Freddie Mac financing.
Biggest changeWe cannot provide assurance that such non-agency mortgage financing will continue to be available as an alternative to Fannie Mae and Freddie Mac financing. We have completed the refinancing of all of our mortgage debt maturities due in 2026.
Failure to maintain the security and functionality of our information systems, to prevent a cybersecurity attack or other unauthorized access to our information systems, or to comply with applicable privacy and consumer protection laws, including HIPAA, could expose us to a number of adverse consequences, many of which are not insurable, including: (i) interruptions to our business, (ii) the theft, destruction, loss, misappropriation, or release of sensitive information, including proprietary business information and personally identifiable information of our residents and associates, (iii) significant remediation costs; (iv) negative publicity which could damage our reputation and our relationships with our residents, associates, and referral sources, (v) litigation and potential liability under privacy, security, and consumer protection laws, including HIPAA, or other applicable laws, rules, or regulations, and (vi) government inquiries which may result in sanctions and other criminal or civil fines or penalties.
Failure to maintain the security and functionality of our information systems, to prevent a cybersecurity attack or other unauthorized access to our information systems, or to comply with applicable privacy, security, and consumer protection laws, including HIPAA, could expose us to a number of adverse consequences, many of which are not insurable, including: (i) interruptions to our business, (ii) the theft, destruction, loss, misappropriation, or release of sensitive information, including proprietary business information and personally identifiable information of our residents and associates, (iii) significant remediation costs; (iv) negative publicity which could damage our reputation and our relationships with our residents, associates, and referral sources, (v) litigation and potential liability under privacy, security, and consumer protection laws, including HIPAA, or other applicable laws, rules, or regulations, and (vi) government inquiries which may result in sanctions and other criminal or civil fines or penalties.
These factors include the necessity of arranging separate leases, mortgage loans, or other financings to provide the capital required to complete these projects; difficulties or delays in obtaining zoning, land use, building, occupancy, licensing, certificate of need, and other required governmental permits and approvals; failure to complete construction of the projects on budget and on schedule; failure of third-party contractors and subcontractors to perform under their contracts; shortages of labor or materials that could delay projects or make them more expensive (including due to supply chain disruptions); adverse weather conditions that could delay completion of projects; increased costs resulting from general 23 economic conditions or increases in the cost of materials or labor (including as a result of inflation and general labor market conditions); and increased costs as a result of changes in laws and regulations.
These factors include the necessity of arranging separate leases, mortgage loans, or other financings to provide the capital required to complete these projects; difficulties or delays in obtaining zoning, land use, building, occupancy, licensing, certificate of need, and other required governmental permits and approvals; failure to complete construction of the projects on budget and on schedule; failure of third-party contractors and subcontractors to perform under their contracts; shortages of labor or materials that could delay projects or make them more expensive (including due to supply chain disruptions); adverse weather conditions that could delay completion of projects; increased costs resulting from general economic conditions or increases in the cost of materials or labor (including as a result of inflation and general labor market conditions); and increased costs as a result of changes in laws and regulations.
Our level of indebtedness and our long-term leases could adversely affect our future operations and/or impact our stockholders for several reasons, including, without limitation: • We may have little or no cash flow apart from cash flow that is dedicated to required interest, principal, and lease payments; 26 • Increases in our outstanding indebtedness, leverage, and long-term lease obligations will increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; • Increases in our outstanding indebtedness may limit our ability to obtain additional financing for working capital, capital expenditures, acquisition and development, general corporate, and other purposes; and • Our ability to pay dividends to our stockholders (should we initiate dividend payments in the future) may be limited.
Our level of indebtedness and our long-term leases could adversely affect our future operations and/or impact our stockholders for several reasons, including, without limitation: • We may have little or no cash flow apart from cash flow that is dedicated to required interest, principal, and lease payments; • Increases in our outstanding indebtedness, leverage, and long-term lease obligations will increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; • Increases in our outstanding indebtedness may limit our ability to obtain additional financing for working capital, capital expenditures, acquisition and development, general corporate, and other purposes; and • Our ability to pay dividends to our stockholders (should we initiate dividend payments in the future) may be limited.
Therefore, if an event of default has occurred under any of our debt or lease documents, subject to cure provisions in certain instances, the respective lender or lessor would have the right to declare all the related outstanding amounts of indebtedness or cash lease obligations immediately due and payable, to foreclose 27 on our mortgaged communities, to terminate our leasehold interests, to foreclose on other collateral securing the indebtedness and leases, to discontinue our operation of leased communities, and/or to pursue other remedies available to such lender or lessor.
Therefore, if an event of default has occurred under any of our debt or lease documents, subject to cure provisions in certain instances, the respective lender or lessor would have the right to declare all the related outstanding amounts of indebtedness or cash lease obligations immediately due and payable, to foreclose on our mortgaged communities, to terminate our leasehold interests, to foreclose on other collateral securing the indebtedness and leases, to discontinue our operation of leased communities, and/or to pursue other remedies available to such lender or lessor.
There can be no assurance that we will be able to obtain liability insurance in the future or, if available, that such coverage will be available on acceptable terms. We face periodic and routine inquiries, reviews, audits, and investigations by government agencies, and any adverse findings could negatively impact our business, financial condition, results of operations, and cash flow.
There can be no assurance that we will be able to obtain liability insurance in the future or, if available, that such coverage will be available on acceptable terms. 28 We face periodic and routine inquiries, reviews, audits, and investigations by government agencies, and any adverse findings could negatively impact our business, financial condition, results of operations, and cash flow.
Additionally, our amended and restated certificate of incorporation provides that Section 203 of the Delaware General Corporation Law, which restricts certain business combinations with interested stockholders in certain situations, will not apply to us. 33 We are a holding company with no operations and rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations.
Additionally, our amended and restated certificate of incorporation provides that Section 203 of the Delaware General Corporation Law, which restricts certain business combinations with interested stockholders in certain situations, will not apply to us. We are a holding company with no operations and rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations.
We are subject to a wide variety of federal, state, and local employment-related laws and regulations which govern matters including, but not limited to, wage and hour requirements, equal employment opportunity obligations, leaves of absence and reasonable accommodations, employee benefits, the right of employees to engage in protected concerted activity (including union organizing), and occupational health and safety requirements.
We are subject to a wide variety of federal, state, and local employment-related laws and regulations which govern matters including, but not limited to, wage and hour requirements, equal employment opportunity obligations, leaves of absence and reasonable accommodations, employee benefits, the right of employees to engage in protected concerted activity (including 30 union organizing), and occupational health and safety requirements.
Though we have taken steps to protect the cybersecurity and physical security of our information systems and have implemented policies and procedures to comply with HIPAA and other privacy laws, rules, and regulations, there can be no assurance that our security measures and disaster recovery plan will prevent damage to, or interruption or breach of, our information systems or other unauthorized access to proprietary or private information.
Though we have taken steps to protect the cybersecurity and physical security of our information systems and have implemented policies and procedures to comply with HIPAA and other privacy laws, rules, and regulations, there can be no assurance that our security measures and disaster 21 recovery plan will prevent damage to, or interruption or breach of, our information systems or other unauthorized access to proprietary or private information.
As a result of this concentration, the conditions of local economies and real estate markets, changes in governmental 21 regulations, acts of nature, and other factors that may result in a decrease in demand for senior living services in these areas could have an adverse effect on our financial condition, revenues, results of operations, and cash flow.
As a result of this concentration, the conditions of local economies and real estate markets, changes in governmental regulations, acts of nature, and other factors that may result in a decrease in demand for senior living services in these areas could have an adverse effect on our financial condition, revenues, results of operations, and cash flow.
If we are not able to obtain additional financing on favorable terms, we also may have to forgo, delay, or abandon some or all of our planned capital expenditures, any potential lease restructuring opportunities that we identify, or investments to support our strategy, which could adversely affect our revenues, results of operations, and cash flow.
If we are not able to obtain additional financing on favorable terms, we also may have to forgo, delay, or abandon some or all of our planned capital expenditures, any potential lease restructuring opportunities 24 that we identify, or investments to support our strategy, which could adversely affect our revenues, results of operations, and cash flow.
Further, if additional funds are raised through the issuance of additional equity securities, the percentage ownership of our stockholders would be diluted. Any newly issued equity securities may have rights, preferences, or privileges senior to those of our common stock. 28 Human Capital The transition of management or unexpected departure of our key officers could harm our business.
Further, if additional funds are raised through the issuance of additional equity securities, the percentage ownership of our stockholders would be diluted. Any newly issued equity securities may have rights, preferences, or privileges senior to those of our common stock. Human Capital The transition of management or unexpected departure of our key officers could harm our business.
In addition, we have experienced and may continue to experience wage pressures due to minimum wage and minimum salary threshold increases mandated by federal, state, and local laws. Third-party staffing agencies from which we source contract labor have increased the rates they charge which has resulted in, and may further result in, increases in the cost of contract labor.
In addition, we have experienced and may continue to experience wage pressures due to minimum wage and minimum salary threshold increases mandated by federal, 27 state, and local laws. Third-party staffing agencies from which we source contract labor have increased the rates they charge which has resulted in, and may further result in, increases in the cost of contract labor.
In addition, if a future pandemic, epidemic, or outbreak were to occur, it could have a similar impact as the COVID-19 pandemic, including an adverse impact on our business, results of operations, cash flow, liquidity, and stock price; and on the nation’s economy and debt and equity markets and the local economies in our markets.
If a future pandemic, epidemic, or outbreak were to occur, it could have a similar impact as the COVID-19 pandemic, including an adverse impact on our business, results of operations, cash flow, liquidity, and stock price, and on the nation’s economy and debt and equity markets and the local economies in our markets.
We are unable to predict the future course of federal, state, and local legislation or regulation. If regulatory 31 requirements increase, whether through enactment of new laws or regulations or changes in the enforcement of existing rules, our business, results of operations, and cash flow could be adversely affected.
We are unable to predict the future course of federal, state, and local legislation or regulation. If regulatory requirements increase, whether through enactment of new laws or regulations or changes in the enforcement of existing rules, our business, results of operations, and cash flow could be adversely affected.
Furthermore, in some circumstances, areas affected by mold may be unusable for periods of time for repairs, and even after successful remediation, the known prior presence of extensive mold could adversely affect the ability of a community to retain or attract residents and could adversely affect a community's market value.
Furthermore, in some circumstances, areas affected by mold may be unusable for periods of time for repairs, and even after 31 successful remediation, the known prior presence of extensive mold could adversely affect the ability of a community to retain or attract residents and could adversely affect a community's market value.
Additionally, since we operate communities that participate in federal and/or state healthcare reimbursement programs, we are subject to federal and state laws that prohibit anyone from presenting, or causing to be presented, claims for reimbursement which are false, fraudulent, or are for items or services that were not provided as claimed. Similar state laws vary from state to state.
Additionally, since we operate communities that participate in federal and/or state healthcare reimbursement programs, we are subject to federal and state laws that prohibit anyone from presenting, or causing to be presented, claims for reimbursement 29 which are false, fraudulent, or are for items or services that were not provided as claimed. Similar state laws vary from state to state.
Future offerings of debt or equity securities by us may adversely affect the market price of our common stock. In the future, we may attempt to increase our capital resources by offering additional debt or equity securities, including commercial paper, medium-term notes, senior or subordinated notes, convertible securities, series of preferred shares, or shares 34 of our common stock.
Future offerings of debt or equity securities by us may adversely affect the market price of our common stock. In the future, we may attempt to increase our capital resources by offering additional debt or equity securities, including commercial paper, medium-term notes, senior or subordinated notes, convertible securities, series of preferred shares, or shares of our common stock.
In recent years, we, as well as other participants in our industry, have been subject to an increasing number of claims and lawsuits alleging that our services have resulted in resident injury or other adverse effects. Many of these lawsuits involve large damage claims and significant legal costs.
In recent years, we, as well as other participants in our industry, have been subject to an increasing number of claims and lawsuits alleging that our services have resulted in resident or associate injury or other adverse effects. Many of these lawsuits involve large damage claims and significant legal costs.
Components of our information systems that we develop or procure from third parties may contain defects in design or manufacture or other 22 problems that could unexpectedly compromise the security or functionality of our information systems.
Components of our information systems that we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise the security or functionality of our information systems.
If applicable, compliance with ADA 32 requirements could require removal of access barriers and non-compliance could result in imposition of government fines or an award of damages to private litigants.
If applicable, compliance with ADA requirements could require removal of access barriers and non-compliance could result in imposition of government fines or an award of damages to private litigants.
In addition, the rate adjustment may not be sufficient to offset our increased costs. The increase we implemented in January 2025 (and any rate increases that we implement in future years) could also result in a higher amount of attrition among our residents, which could negatively impact our occupancy, revenues, results of operations and cash flows.
In addition, the rate adjustment may not be sufficient to offset our increased costs. The increase we implemented in January 2026 (and any rate increases that we implement in future years) could also result in a higher amount of attrition among our residents, which could negatively impact our occupancy, revenues, results of operations, and cash flows.
If we are unable to extend or 25 refinance our indebtedness prior to scheduled maturity dates, our liquidity and financial condition could be adversely impacted.
If we are unable to extend or refinance our indebtedness prior to scheduled maturity dates, our liquidity and financial condition could be adversely impacted.
Certain of our debt and lease documents contain restrictions and financial covenants, such as those requiring us to maintain prescribed minimum liquidity, net worth, and stockholders' equity 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.
Certain of our debt and lease documents contain restrictions 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.
General economic conditions, such as inflation, the consumer price index, commodity costs, fuel and other energy costs, competition in the labor market, costs of salaries, wages, benefits and insurance, interest rates, and tax rates, affect our facility operating, facility lease, general and administrative and other expenses, and we have no control or limited ability to control such factors.
General economic conditions, such as inflation, the consumer price index, commodity costs, fuel and other energy costs, competition in the labor market, costs of salaries, wages, benefits and insurance, interest rates, tax rates, and tariffs affect our facility operating, general and administrative and other expenses, and we have no control or limited ability to control such factors.
Additional equity offerings may dilute the economic and voting rights of our existing stockholders or reduce the market price of our common stock, or both.
Additional equity offerings may dilute the economic and voting rights of our existing stockholders or reduce the market price of 33 our common stock, or both.
Also, our insurance policies' deductibles, or self-insured retention, are accrued based on an actuarial projection of future liabilities. If these projections are inaccurate and if there is an unexpectedly large number of successful claims that result in liabilities in excess of our accrued reserves, our operating results could be negatively affected.
Also, our insurance policies' deductibles, or self-insured retention, are accrued based on an actuarial projection of future liabilities. If these projections are inaccurate and if there is an unexpectedly large number of successful claims that result in costs in excess of our accrued liabilities, our operating results could be negatively affected.
Certain of our communities, or portions thereof, may be subject to compliance with the Americans with Disabilities Act, or ADA. The ADA has separate compliance requirements for "public accommodations" and "commercial properties," but generally requires that buildings be made accessible to people with disabilities.
Certain of our communities, or portions thereof, may be subject to compliance with the ADA. The ADA has separate compliance requirements for "public accommodations" and "commercial properties," but generally requires that buildings be made accessible to people with disabilities.
In addition, we are required to operate our communities in compliance with applicable safety and health standards of the Occupational Safety and Health Administration, and other fire, health, and safety regulations, building codes and other land use regulations, and food licensing or certification requirements as they may be adopted by governmental agencies and bodies from time to time.
In addition, we are required to operate our communities in compliance with applicable safety and health standards of the OSHA, and other fire, health, and safety regulations, building codes and other land use regulations, and food licensing or certification requirements as they may be adopted by governmental agencies and bodies from time to time.
Due to the competitive environment for new residents in our industry, our rate adjustments could slow our occupancy recovery progress or result in a decrease in occupancy in our communities. Any use of promotional or other discounting would offset a portion of such rate adjustments in our RevPAR and RevPOR results.
Due to the competitive environment for new residents in our industry, our rate adjustments could slow our occupancy growth or result in a decrease in occupancy in our communities. Any use of promotional or other discounting would offset a portion of such rate adjustments in our RevPAR and RevPOR results.
Compliance with the Americans with Disabilities Act and Fair Housing Act, safety and health standards of the Occupational Safety and Health Administration, and other fire, safety, health, and other regulations may require us to make unanticipated expenditures, which could increase our costs and therefore adversely affect our results of operations and financial condition .
Compliance with the Americans with Disabilities Act and Fair Housing Act, safety and health standards of the OSHA, and other fire, safety, health, and other regulations may require us to make unanticipated expenditures, which could increase our costs and therefore adversely affect our results of operations and financial condition .
Costs to seniors associated with independent living, assisted living, and memory care communities are not generally reimbursable under government reimbursement programs such as Medicare and Medicaid. For the year ended December 31, 2024, we generated 93.8% of our consolidated resident fee revenue from private pay residents.
Costs to seniors associated with independent living, assisted living, and memory care communities are not generally reimbursable under government reimbursement programs such as Medicare and Medicaid. For the year ended December 31, 2025, we generated 93.9% of our consolidated resident fee revenue from private pay residents.
Regulatory, Compliance, and Legal Environmental contamination at any of our communities could result in substantial liabilities to us, which may exceed the value of the underlying assets and which could materially and adversely affect our financial condition, results of operations, and cash flow.
Environmental contamination at any of our communities could result in substantial liabilities to us, which may exceed the value of the underlying assets and which could materially and adversely affect our financial condition, results of operations, and cash flow.
A future health crisis could also result in restrictions on visitors and move-ins at our communities as a result of infections at a community or as necessary to comply with regulatory requirements or at the direction of authorities having jurisdiction; perceptions regarding the safety of senior living communities; changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand; changes in our residents’ and their families’ ability to afford our resident fees; changes in the acuity levels of our new residents; increased costs for response efforts, including increased equipment, supplies, labor, litigation, testing, vaccination clinic, health plan, and other expenses; greater use of contract labor and other premium labor; impacts on our ability to complete financings and refinancings of various assets or other transactions or to generate sufficient cash flow to cover required debt, interest, and lease payments and to satisfy financial and other covenants in our debt and lease documents; and increases in the frequency and magnitude of legal actions and liability claims that may arise due to such health crisis or our response efforts.
Any future health crisis could also result in restrictions on visitors and move-ins at our communities as a result of infections at a community or as necessary to comply with regulatory requirements or at the direction of authorities having jurisdiction; perceptions regarding the safety of senior living communities; changes in demand for senior living communities and our ability 32 to adapt our sales and marketing efforts to meet that demand; changes in our residents’ and their families’ ability to afford our resident fees; changes in the acuity levels of our new residents; increased costs for response efforts; greater use of contract labor and other premium labor; impacts on our ability to complete financings and refinancings of various assets or other transactions or to generate sufficient cash flow to cover required debt, interest, and lease payments and to satisfy financial and other covenants in our debt and lease documents; and increases in the frequency and magnitude of legal actions and liability claims that may arise due to such health crisis or our response efforts.
We may issue all of the shares of our common stock that are authorized but unissued (and not otherwise reserved for issuance under our stock incentive or purchase plans, outstanding warrants, outstanding convertible senior notes, or outstanding tangible equity units) without any action or approval by our stockholders.
We may issue all of the shares of our common stock that are authorized but unissued (and not otherwise reserved for issuance under our stock incentive or purchase plans or outstanding convertible senior notes) without any action or approval by our stockholders.
We rely on reimbursement from government programs for a portion of our revenues, primarily in our CCRCs segment. For the year ended December 31, 2024, Medicare and Medicaid reimbursements represented 15.5% of our CCRCs segment’s resident fee revenue and 4.8% of our consolidated resident fee revenue.
We rely on reimbursement from government programs for a portion of our revenues, primarily in our CCRCs segment. For the year ended December 31, 2025, Medicare and Medicaid reimbursements represented 15.3% of our CCRCs segment’s resident fee revenue and 4.8% of our consolidated resident fee revenue.
Current global economic conditions and uncertainties, including geopolitical tensions, conflicts, potential recessions or economic downturns, uncertainty surrounding a new presidential administration, the potential for failures or realignments of financial institutions, and the related impact on available credit may affect us and our business partners, landlords, counterparties, and residents or prospective residents in an adverse manner including, but not limited to, reducing access to liquid funds or credit, increasing the cost of credit, limiting our ability to manage interest rate risk, increasing costs and expenses to us, increasing the risk that certain of our business partners, landlords, or counterparties would be unable to fulfill their obligations to us, and other impacts which we are unable to fully anticipate.
Current global economic conditions and uncertainties, including geopolitical tensions, conflicts, potential recessions or economic downturns, other general political developments, the potential for failures or realignments of financial institutions, and the related impact on available credit may affect us and our business partners, landlords, counterparties, and residents or prospective residents in an adverse manner including, but not limited to, reducing access to liquid funds or credit, increasing the cost of credit, limiting our ability to manage interest rate risk, increasing costs and expenses to us, increasing the risk that certain of our business partners, landlords, or counterparties would be unable to fulfill their obligations to us, and other impacts which we are unable to fully anticipate.
In addition, the Company has been and currently is involved in putative class action litigation regarding staffing at our communities and compliance with consumer protection laws and the Americans with Disabilities Act (and similar state laws). Certain claims and lawsuits allege large damage amounts, seek injunctive relief, and may require (and have required) significant costs to defend and resolve.
In addition, we have been and currently are involved in putative class action litigation regarding staffing at our communities and compliance with consumer protection laws and the Americans with Disabilities Act ("ADA") (and similar state laws). Certain claims and lawsuits allege large damage amounts, seek injunctive relief, and may require (and have required) significant costs to defend and resolve.
While the SEC rules are currently stayed pending litigation, as the nature, scope and complexity of environmental and climate change reporting, diligence and disclosure requirements expand, significant effort and expenses could be required to comply with the evolving requirements. As our disclosure obligations increase, third parties may make claims or bring litigation relating to those disclosures which may be costly.
If the nature, scope and complexity of environmental and climate change reporting, diligence, and disclosure requirements expand, significant effort and expenses could be required to comply with the evolving requirements. As our disclosure obligations increase, third parties may make claims or bring litigation relating to those disclosures, which may be costly.
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. Our failure to comply with applicable covenants could constitute an event of default under the applicable debt or lease documents.
As of December 31, 2025, our liquidity was $377.7 million. 25 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. Our failure to comply with applicable covenants could constitute an event of default under the applicable debt or lease documents.
In addition, new disclosure standards and rules related to environmental matters have been adopted and may continue to be introduced in various states and other jurisdictions. In October 2023, California adopted new carbon and climate-related reporting requirements for large public and private companies doing business in the state. Further, the SEC finalized climate change disclosure rules in 2024.
In addition, new disclosure standards and rules related to environmental matters have been adopted and may continue to be introduced in various states and other jurisdictions. In October 2023, California adopted new carbon and climate-related reporting requirements for large public and private companies doing business in the state and other states are and have contemplated similar rules and regulations.
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 December 31, 2024, our liquidity was $389.3 million.
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.
In the decade prior to start of the COVID-19 pandemic in 2020, the industry historically attracted investments resulting in continuous increases in construction and development of new senior housing supply, and if this development were to return to pre-pandemic levels, it could result in increased competition.
In the decade prior to start of the COVID-19 pandemic in 2020, the industry historically attracted investments resulting in continuous increases in construction and development of new senior housing supply, and if this development were to return to pre-pandemic levels, it could result in increased competition. In addition, certain competitors may price aggressively in order to capture market share.
Although we do not believe that we have incurred such liabilities as would have a material adverse effect on our business, financial condition, and results of operations, we could be subject to substantial future liability for environmental contamination that we have no knowledge about as of the date of this report and/or for which we may not be at fault. 29 Failure to comply with existing environmental laws could result in increased expenditures, litigation, and potential loss to our business and in our asset value, which would have an adverse effect on our financial condition, results of operations, and cash flow.
Although we do not believe that we have incurred such liabilities as would have a material adverse effect on our business, financial condition, and results of operations, we could be subject to substantial future liability for environmental contamination that we have no knowledge about as of the date of this report and/or for which we may not be at fault.
As of December 31, 2024, we had outstanding $3.7 billion principal amount of mortgage financing, $369.4 million of 3.50% convertible senior notes due 2029, $23.3 million of 2.00% convertible senior notes due 2026, $9.4 million principal amount of the senior amortizing notes component of tangible equity units, and $75.3 million letters of credit.
As of December 31, 2025, we had outstanding $3.9 billion principal amount of mortgage financing, $369.4 million of 3.50% convertible senior notes due 2029, $23.3 million of 2.00% convertible senior notes due 2026, and $60.6 million of letters of credit.
This implementation process could disrupt our operations or otherwise adversely affect us, including as the result of delays, disruptions to business continuity, higher than anticipated expenditures, potential design defects, data migration issues, diversion of management’s attention from other key priorities, increased cybersecurity risks and adverse impacts on the effectiveness of our internal controls over financial reporting.
This process could disrupt our operations or otherwise adversely affect us, including as the result of disruptions to business continuity, higher than anticipated expenditures, potential design defects, and adverse impacts on the effectiveness of our internal controls over financial reporting.
Due to the average age and prevalence of chronic medical conditions among our residents, they generally are at disproportionately higher risk of becoming severely ill from COVID-19 or any similar future pandemic, epidemic, or outbreak of an infectious disease or other public health crisis.
Due to the average age and prevalence of chronic medical conditions among our residents, they could be at disproportionately higher risk of becoming severely ill from pandemics, epidemics, or outbreaks of an infectious disease or other public health crisis, as occurred with the COVID-19 pandemic.
To the extent we identify and pursue any future development, investment, or acquisition opportunities, we may encounter difficulties in identifying opportunities at attractive prices or integrating acquisitions with our operations, which may adversely affect our financial condition, results of operations, and cash flow.
Furthermore, our failure to complete, or delays in completing, our planned community-level capital expenditures could harm the value of our communities and our revenues, results of operations, and cash flow. 22 To the extent we identify and pursue any future development, investment, or acquisition opportunities, we may encounter difficulties in identifying opportunities at attractive prices or integrating acquisitions with our operations, which may adversely affect our financial condition, results of operations, and cash flow.
Further, if we are unable to reduce our general and administrative expense with respect to completed dispositions or management arrangement terminations in accordance with our expectations, we may not realize the expected benefits of such transactions, which could negatively impact our anticipated results of operations and cash flow. 24 Our execution of our strategy may not be successful, and initiatives undertaken to execute on our strategic priorities may adversely affect our business, financial condition, results of operations, cash flow, and the price of our common stock.
Further, if we are unable to reduce our general and administrative expense with respect to completed dispositions or management arrangement terminations in accordance with our expectations, we may not realize the expected benefits of such transactions, which could negatively impact our anticipated results of operations and cash flow.
The redesign of various business processes and implementation of this ERP and other aspects of this transformative process requires an investment of significant personnel and financial resources, including substantial expenditures for third-party consultants and system software.
During 2025, we implemented a new ERP. The redesign of various business processes and implementation of this ERP and other aspects of this transformative process required and may still require an investment of significant personnel and financial resources, including substantial expenditures for third-party consultants.
There can be no assurance that our strategy or initiatives undertaken to execute on our strategic priorities will be successful and, as a result, such initiatives may adversely affect our business, financial condition, results of operations, cash flow, and the price of our common stock.
Our execution of our strategy may not be successful, and initiatives undertaken to execute on our strategic priorities may adversely affect our business, financial condition, results of operations, cash flow, and the price of our common stock.
We believe potential residents and their families were more cautious, or temporarily delayed their decision, regarding moving into senior living communities during the pandemic, and such caution could recur with a future pandemic, epidemic, or outbreak.
We believe potential residents and their families were more cautious, or temporarily delayed their decision, regarding moving into senior living communities during the COVID-19 pandemic, and such caution could recur with a future pandemic, epidemic, or outbreak. Various factors, including general economic conditions, could adversely affect our financial performance and other aspects of our business.
Our planned full-year 2025 non-development capital expenditures include maintenance, renovations, upgrades, and other major building infrastructure projects for our communities. Such projects may be needed to ensure that our communities are in appropriate physical condition to support our strategy, to meet regulatory standards, to protect the value of our community portfolio, and to remain competitive in our markets.
Such projects may be needed to ensure that our communities are in appropriate physical condition to support our strategy, to meet regulatory standards, to protect the value of our community portfolio, and to remain competitive in our markets.
If we experience a greater 30 number of losses than we anticipate, or if certain claims are not covered by insurance, our results of operations and financial condition could be adversely affected. The senior living industry entails an inherent risk of liability, particularly given the demographics of our residents and the services we provide.
If we experience a greater number of losses than we anticipate, or if certain claims are not covered by insurance, our results of operations and financial condition could be adversely affected.
Changes in the environmental regulatory framework (including legislative or regulatory efforts designed to address climate change) could have a material adverse effect on our business. Significant legal actions and liability claims against us, including putative class action complaints, could subject us to increased operating costs and substantial uninsured liabilities, which may adversely affect our financial condition and results of operations.
Regulatory, Compliance, and Legal Significant legal actions and liability claims against us, including putative class action complaints, could subject us to increased operating costs and substantial uninsured liabilities, which may adversely affect our financial condition and results of operations.
The market price of our common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. If the market price of our common stock declines significantly, stockholders may be unable to resell their shares at or above their purchase price.
The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders. The market price of our common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur.
Consequently, we may encounter competition that could limit our ability to attract and retain residents and associates, raise or maintain resident fees, and expand our business, which could have a material adverse effect on our occupancy, revenues, results of operations, and cash flow.
Consequently, we may encounter competition that could limit our ability to attract and retain residents and associates, raise or maintain resident fees, and expand our business, which could have a material adverse effect on our occupancy, revenues, results of operations, and cash flow. 20 The geographic concentration of our communities could leave us vulnerable to an economic downturn, regulatory changes, acts of nature, or the effects of climate change in those areas, which could negatively impact our financial condition, revenues, results of operations, and cash flow.
If we are unable to complete the implementation of the ERP effectively, on a timely basis, or at all, our financial position, results of operations, and cash flows may be adversely affected and we may be required to incur additional unanticipated expenditures to maintain systems that were expected to be replaced.
If we are unable to integrate the ERP effectively, our financial position, results of operations, and cash flows may be adversely affected and we may be required to incur additional unanticipated expenditures to mitigate business impact.
These events also may make it more difficult or costly for us to raise capital, including through the issuance of common stock. Disruptions in the financial markets could have an adverse effect on our business.
Disruptions or prolonged downturns in the financial markets may cause us to seek alternative sources of potentially less attractive financing and may require us to further adjust our business plan accordingly. These events also may make it more difficult or costly for us to raise capital, including through the issuance of common stock.
Further, because many of our outstanding debt and lease documents contain cross-default and cross-collateralization provisions, a default by us related to one community could affect a significant number of our other communities and their corresponding financing arrangements and leases.
Further, because many of our outstanding debt and lease documents contain cross-default and cross-collateralization provisions, a default by us related to one community could affect a significant number of our other communities and their corresponding financing arrangements and leases. 26 We may not be able to renew, extend, or restructure existing leases, or purchase communities subject to leases, at or prior to the end of their respective lease terms, which could impact our business, results of operations, and cash flow.
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.
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. Due to lower operating performance for certain of our communities in prior years, we sought and obtained non-agency mortgage financings to partially refinance maturing Freddie Mac and Fannie Mae indebtedness.
Corporate Organization and Structure Anti-takeover provisions in our organizational documents may delay, deter, or prevent a tender offer, merger, or acquisition that investors may consider favorable .
Changes in the environmental regulatory framework (including legislative or regulatory efforts designed to address climate change) could have a material adverse effect on our business. Corporate Organization and Structure Anti-takeover provisions in our organizational documents may delay, deter, or prevent a tender offer, merger, or acquisition that investors may consider favorable .
We have completed the refinancing of all of our debt maturities due in 2025. Our inability to obtain refinancing proceeds sufficient to cover 2026 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 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. There can be no assurance that any such additional financing will be available or on terms that are acceptable to us.
We also cannot provide assurance that any of our capital projects will be economically successful or provide a return on investment in accordance with our plans or at all. Furthermore, our failure to complete, or delays in completing, our planned community-level capital expenditures could harm the value of our communities and our revenues, results of operations, and cash flow.
We also cannot provide assurance that any of our capital projects will be economically successful or provide a return on investment in accordance with our plans or at all.
Any of the foregoing could materially and adversely impact our revenues, results of operations, and cash flow. If the redesign and consolidation of certain technology platforms, including through the implementation of a core enterprise resource planning system, or ERP, does not proceed as expected or is not completed successfully, our business and financial results may be adversely impacted.
There can be no assurance that our strategy or initiatives undertaken to execute on our strategic priorities will be successful and, as a result, such initiatives may adversely affect our business, financial condition, results of operations, cash flow, and the price of our common stock. 23 If the redesign and consolidation of certain technology platforms, including through the implementation of a core enterprise resource planning system, or ERP, does not proceed as expected or is not integrated successfully, our business and financial results may be adversely impacted.
The market price of our common stock may fluctuate or decline significantly in the future.
If the market price of our common stock declines significantly, stockholders may be unable to resell their shares at or above their purchase price. The market price of our common stock may fluctuate or decline significantly in the future.
If we fail to attract and retain qualified associates, our ability to conduct our business operations effectively, our overall operating results, and cash flow could be harmed. In recent years, we experienced pressures associated with the intensely competitive labor environment, including increased associate turnover and difficulty in filling open positions timely.
In recent years, we experienced pressures associated with the intensely competitive labor environment, including increased associate turnover and difficulty in filling open positions timely.
Some examples are the Health Insurance Portability and Accountability Act of 1996, or HIPAA, the Balanced Budget Act of 1997, and the False Claims Act, which gives private individuals the ability to bring an action on behalf of the federal government.
Some examples are HIPAA, the Balanced Budget Act of 1997, and the False Claims Act, which gives private individuals the ability to bring an action on behalf of the federal government. The violation of any of these laws or regulations may result in the imposition of fines or other penalties that could increase our costs and otherwise jeopardize our business.
Severe cold and flu season, or other contagious disease in the markets in which we operate could result in a regulatory ban on admissions, decreased occupancy, and otherwise adversely affect our business. The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders.
Similarly, seasonal contagious illnesses such as cold and flu, which typically more severely impact seniors than the general population may negatively affect our occupancy. Severe cold and flu season, or other contagious disease in the markets in which we operate could result in a regulatory ban on admissions, decreased occupancy, and otherwise adversely affect our business.
The violation of any of these laws or regulations may result in the imposition of fines or other penalties that could increase our costs and otherwise jeopardize our business. Because of incentives allowing a private individual to bring a claim on behalf of the federal government, so-called "whistleblower" suits have become more frequent.
Because of incentives allowing a private individual to bring a claim on behalf of the federal government, so-called "whistleblower" suits have become more frequent.
Further, advances in technology and at-home services may permit more seniors to age-in-place at home and could have an impact on the demand for senior living communities.
Such advances in technology and at-home services may also permit more seniors to age-in-place at home and could have an impact on the demand for senior living communities. We compete for residents on the basis of resident and family member satisfaction, reputation, location, service offerings, our communities’ physical characteristics, dining, and other amenities, among other things.
Moreover, there is no assurance that this new ERP and other aspects of this process, once implemented, will meet our current or future business needs or will operate as intended. Failure to complete our capital expenditures in accordance with our plans may adversely affect our anticipated revenues, results of operations, and cash flow.
Moreover, there is no assurance that this new ERP and other aspects of this process will meet our current or future business needs or will operate as intended. Our ability to use net operating loss carryovers to reduce future tax payments may be limited.
We have recently made the annual rate adjustment effective January 1, 2025 for our in-place private pay residents. The average increase was again higher than our typical annual rate adjustment in order to help offset our increased costs as a result of labor pressures, high inflation, and elevated interest rates.
The average increase was again higher than our typical annual rate adjustment in order to help offset our increased costs as a result of general cost inflation and investments in our communities and other corporate initiatives (including information systems and other strategic projects).
Our subsidiaries are legally distinct from us and have no obligation to make funds available to us. Other Market Factors Various factors, including general economic conditions and the spread of contagious illnesses, could adversely affect our financial performance and other aspects of our business.
Our subsidiaries are legally distinct from us and have no obligation to make funds available to us. Other Market Factors We cannot predict the emergence and effects of future pandemics, epidemics or a severe cold and flu season on our business, results of operations, cash flow, liquidity, and stock price.
Removed
In addition, the COVID-19 pandemic resulted in additional occupancy pressure for our industry, and industry data shows that nearly all markets had fallen to record low occupancy by the first quarter of 2021. While the industry recovers occupancy, certain competitors may price aggressively in order to capture market share.
Added
We have recently made the annual rate adjustment effective January 1, 2026 for our in-place private pay residents.
Removed
The geographic concentration of our communities could leave us vulnerable to an economic downturn, regulatory changes, acts of nature, or the effects of climate change in those areas, which could negatively impact our financial condition, revenues, results of operations, and cash flow.
Added
Further, our competitors or other third parties may incorporate advanced technology, including artificial intelligence, into their business operations or services more quickly or more successfully than us, which could impair our ability to compete effectively.
Removed
We have begun a transformative process of redesigning numerous workflows that is intended to modernize and consolidate certain of our technology platforms and streamline associated processes across our organization to carry out certain financial and operational functions. As part of this process, we are designing and implementing a new ERP system.
Added
Any of the foregoing could materially and adversely impact our revenues, results of operations, and cash flow. Failure to complete our capital expenditures in accordance with our plans may adversely affect our anticipated revenues, results of operations, and cash flow. Our planned full-year 2026 non-development capital expenditures include maintenance, renovations, upgrades, and other major building infrastructure projects for our communities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn the event of a cybersecurity incident, the CISO is equipped with a written incident response plan. 35 Failure to maintain the security and functionality of our information systems and data, to prevent a cybersecurity attack or breach, or to comply with applicable privacy and consumer protection laws, including HIPAA, could adversely affect our business, reputation, and relationships with our residents, associates, and referral sources and subject us to remediation costs, government inquiries, and liabilities, any of which could materially and adversely impact our revenues, results of operations, and cash flow.
Biggest changeFailure to maintain the security and functionality of our information systems and data, to prevent a cybersecurity attack or breach, or to comply with applicable privacy and consumer protection laws, including HIPAA, could adversely affect our business, reputation, and relationships with our residents, associates, and referral sources and subject us to remediation costs, government inquiries, and liabilities, any of which could materially and adversely impact our revenues, results of operations, and cash flow.
Further information is discussed in "Item 1A. Risk Factors ." To date, the aforementioned cybersecurity risks and any incidents that we, or our third-party vendors, have experienced have not materially affected us, including our business, strategy, results of operations, or financial condition.
Further information is discussed in "Item 1A. Risk Factors ." To date, the aforementioned cybersecurity risks and 34 any incidents that we, or our third-party vendors, have experienced have not materially affected us, including our business, strategy, results of operations, or financial condition.
The CISO who reports to the CIO has primary responsibility for assessing, monitoring, and managing our cybersecurity risks. The CIO, in turn, reports directly to our President and Chief Executive Officer. Our CISO oversees our cybersecurity governance programs, tests our compliance with standards, takes action to mitigate known risks, and leads our cybersecurity associate training program.
The CISO who reports to the CIO has primary responsibility for assessing, monitoring, and managing our cybersecurity risks. Our CISO oversees our cybersecurity governance programs, tests our compliance with standards, takes action to mitigate known risks, and leads our cybersecurity associate training program.
Added
In the event of a cybersecurity incident, the CISO is equipped with a written incident response plan.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table sets forth certain information regarding our owned, leased, and managed communities as of December 31, 2024, or, for occupancy, represents the weighted average occupancy for the month of December 2024. 36 Number of Communities State Units Owned Leased Managed Total Texas 7,667 53 19 11 83 Florida 5,907 44 24 — 68 California 5,021 31 11 — 42 Colorado 3,368 13 11 5 29 North Carolina 3,193 7 45 — 52 Ohio 2,887 15 14 6 35 Illinois 2,823 3 9 1 13 Washington 2,705 19 12 — 31 Arizona 2,054 17 9 — 26 Michigan 1,678 9 22 — 31 Tennessee 1,518 16 6 1 23 Oregon 1,499 11 11 — 22 New York 1,441 11 9 1 21 Kansas 1,120 8 10 — 18 New Jersey 1,024 7 5 — 12 Virginia 964 7 3 — 10 Massachusetts 900 3 3 — 6 Pennsylvania 766 7 3 — 10 Alabama 760 4 — — 4 Georgia 656 8 — — 8 Louisiana 606 6 — 1 7 Connecticut 590 2 3 — 5 Idaho 548 6 1 — 7 Minnesota 538 — 12 — 12 Wisconsin 485 5 7 — 12 Missouri 479 2 — 1 3 Oklahoma 469 3 9 — 12 New Mexico 426 2 1 — 3 Rhode Island 398 3 — — 3 Mississippi 386 5 — — 5 Maryland 359 3 — 1 4 South Carolina 333 4 3 — 7 Arkansas 332 4 — — 4 Indiana 310 3 4 — 7 Nevada 257 4 — — 4 Kentucky 163 2 — — 2 Delaware 105 2 — — 2 Vermont 101 1 — — 1 West Virginia 93 1 — — 1 New Hampshire 90 1 — — 1 Montana 76 1 — — 1 Total 55,095 353 266 28 647 December 2024 weighted average occupancy 78.4 % 80.8 % 81.2 % 79.5 % 37 Community Support Centers Our main community support centers are leased, including our 52,755 square foot support center in Brentwood, Tennessee and our 5,391 square foot support center in Milwaukee, Wisconsin.
Biggest changeThe following table sets forth certain information regarding our owned, leased, and managed communities as of December 31, 2025, or, for occupancy, represents the weighted average occupancy for the month of December 2025. 35 Number of Communities State Units Owned Leased Managed Total Texas 7,516 52 16 11 79 Florida 4,921 44 16 — 60 California 3,829 31 4 1 36 Colorado 3,238 15 7 5 27 North Carolina 3,193 9 43 — 52 Ohio 2,585 14 13 4 31 Washington 2,514 19 11 — 30 Arizona 1,818 18 6 — 24 Tennessee 1,518 19 3 1 23 Michigan 1,398 12 8 1 21 New York 1,396 11 8 1 20 Oregon 1,197 11 7 — 18 Kansas 1,121 10 8 — 18 Illinois 1,117 3 3 1 7 New Jersey 1,024 7 5 — 12 Virginia 891 7 2 — 9 Alabama 760 4 — — 4 Pennsylvania 742 8 1 — 9 Georgia 656 8 — — 8 Massachusetts 618 3 2 — 5 Louisiana 606 6 — 1 7 Missouri 479 2 — 1 3 Idaho 478 6 — — 6 Oklahoma 436 4 7 — 11 Wisconsin 431 5 3 3 11 Connecticut 422 2 2 — 4 Rhode Island 398 3 — — 3 Mississippi 386 5 — — 5 Maryland 359 3 — 1 4 Arkansas 332 4 — — 4 South Carolina 292 5 1 — 6 New Mexico 283 2 — — 2 Nevada 257 4 — — 4 Indiana 226 3 2 — 5 Minnesota 179 3 — 5 8 Kentucky 163 2 — — 2 Delaware 105 2 — — 2 Vermont 101 1 — — 1 West Virginia 93 1 — — 1 New Hampshire 90 1 — — 1 Montana 76 1 — — 1 Total 48,244 370 178 36 584 December 2025 weighted average occupancy 82.2 % 83.1 % 81.9 % 82.4 % 36 Community Support Centers Our main community support centers are leased, including our 52,755 square foot support center in Brentwood, Tennessee and our 5,391 square foot support center in Milwaukee, Wisconsin.
Item 2. Properties Communities As of December 31, 2024, we operated and managed 647 communities across 41 states, with the capacity to serve approximately 58,000 residents. As of December 31, 2024, we owned 353 communities, leased 266 communities, and managed 28 communities on behalf of others. As of December 31, 2024, 90% of our owned communities are subject to mortgages.
Item 2. Properties Communities As of December 31, 2025, we operated and managed 584 communities across 41 states, with the capacity to serve approximately 51,000 residents. As of December 31, 2025, we owned 370 communities, leased 178 communities, and managed 36 communities on behalf of others. As of December 31, 2025, 89% of our owned communities are subject to mortgages.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparisons in this graph are not intended to forecast or be indicative of possible future performance of Brookdale shares or such indices. 12/19 12/20 12/21 12/22 12/23 12/24 Brookdale Senior Living Inc. $ 100.00 $ 60.94 $ 70.98 $ 37.55 $ 80.06 $ 69.19 Russell 3000 100.00 120.89 151.91 122.73 154.59 191.39 S&P Health Care 100.00 113.45 143.09 140.29 143.18 146.87 The performance graph and related information shall not be deemed to be filed as part of this Annual Report on Form 10-K and do not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing by us under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate them by reference into such filing. 40 Recent Sales of Unregistered Securities Other than as previously disclosed, none during the quarter ended December 31, 2024.
Biggest changeThe comparisons in this graph are not intended to forecast or be indicative of possible future performance of Brookdale shares or such indices. 12/20 12/21 12/22 12/23 12/24 12/25 Brookdale Senior Living Inc. $ 100.00 $ 116.48 $ 61.63 $ 131.38 $ 113.54 $ 243.57 Russell 3000 100.00 125.66 101.53 127.88 158.32 185.47 S&P Health Care 100.00 126.13 123.67 126.21 129.46 148.36 The performance graph and related information shall not be deemed to be filed as part of this Annual Report on Form 10-K and do not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing by us under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate them by reference into such filing.
The repurchase program does not obligate us to acquire any particular amount of common stock and the program may be suspended, modified, or discontinued at any time at our discretion without prior notice. Shares of stock repurchased under the program will be held as treasury shares. As of December 31, 2024, $44.0 million remained available under the repurchase program.
The repurchase program does not obligate us to acquire any particular amount of common stock and the program may be suspended, modified, or discontinued at any time at our discretion without prior notice. Shares of stock repurchased under the program will be held as treasury shares. As of December 31, 2025, $44.0 million remained available under the repurchase program.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table contains information regarding purchases of our common stock made during the three months ended December 31, 2024 by or on behalf of us or any ''affiliated purchaser,'' as defined by Rule 10b-18(a)(3) of the Exchange Act.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table contains information regarding purchases of our common stock made during the three months ended 39 December 31, 2025 by or on behalf of us or any ''affiliated purchaser,'' as defined by Rule 10b-18(a)(3) of the Exchange Act.
The graph assumes that a person invested $100 in Brookdale stock and each of the indices on December 31, 2019 and that dividends are reinvested.
The graph assumes that a person invested $100 in Brookdale stock and each of the indices on December 31, 2020 and that dividends are reinvested.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange, or the NYSE, under the symbol "BKD." As of February 17, 2025, there were approximately 328 holders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange, or the NYSE, under the symbol "BKD." As of February 17, 2026, there were approximately 282 holders of record of our common stock.
As we have done in the past, we may also pay dividends in the future that exceed our net income for the relevant period as calculated in accordance with GAAP. 39 Share Price Performance Graph The following graph compares the five-year cumulative total return for Brookdale common stock with the comparable cumulative return of the Russell 3000 and S&P Health Care Indices.
As we have done in the past, we may also pay dividends in the future that exceed our net income for the relevant period as calculated in accordance with generally accepted accounting principles in the United States ("GAAP"). 38 Share Price Performance Graph The following graph compares the five-year cumulative total return for Brookdale common stock with the comparable cumulative return of the Russell 3000 and S&P Health Care Indices.
Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (2) 10/1/2024 - 10/31/2024 — $ — — $ 44,026 11/1/2024 - 11/30/2024 2,398 $ 5.20 — $ 44,026 12/1/2024 - 12/31/2024 — $ — — $ 44,026 Total 2,398 $ 5.20 — (1) Consists entirely of shares withheld to satisfy tax liabilities due upon the vesting of restricted stock units.
Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (2) 10/1/2025 - 10/31/2025 29,744 $ 8.56 — $ 44,026 11/1/2025 - 11/30/2025 2,522 $ 10.49 — $ 44,026 12/1/2025 - 12/31/2025 — $ — — $ 44,026 Total 32,266 $ 8.71 — (1) Consists entirely of shares withheld to satisfy tax liabilities due upon the vesting of restricted stock units.
We may determine to pay a regular quarterly dividend to the holders of our common stock in the future, but in the near term, we anticipate deploying capital to, among other uses, fund planned capital expenditures or investments to support our strategy.
Dividend Policy On December 30, 2008, our Board of Directors voted to suspend our quarterly cash dividend indefinitely. We may determine to pay a regular quarterly dividend to the holders of our common stock in the future, but in the near term, we anticipate deploying capital to, among other uses, fund planned capital expenditures or investments to support our strategy.
Removed
On November 25, 2022, our 7.00% tangible equity units began trading on the New York Stock Exchange under the symbol "BKDT." Dividend Policy On December 30, 2008, our Board of Directors voted to suspend our quarterly cash dividend indefinitely.
Added
Recent Sales of Unregistered Securities None during the quarter ended December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

109 edited+12 added−37 removed77 unchanged
Biggest change(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Years Ended December 31, Increase (Decrease) 2024 2023 Amount Percent Resident fees $ 598,922 $ 564,012 $ 34,910 6.2 % Other operating income $ — $ 487 $ (487) (100.0)% Facility operating expense $ 403,840 $ 379,854 $ 23,986 6.3 % Number of communities (period end) 68 68 — — % Total average units 12,574 12,569 5 — % RevPAR $ 3,969 $ 3,739 $ 230 6.2 % Weighted average occupancy 80.4 % 79.4 % 100 bps n/a RevPOR $ 4,934 $ 4,711 $ 223 4.7 % The increase in the segment's resident fees was primarily attributable to an increase in the segment's RevPAR, comprised of a 4.7% increase in RevPOR and a 100 basis point increase in weighted average occupancy.
Biggest change(in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Years Ended December 31, Increase (Decrease) 2025 2024 Amount Percent Resident fees $ 593,813 $ 598,922 $ (5,109) (0.9) % Facility operating expense $ 396,267 $ 403,840 $ (7,573) (1.9) % Number of communities (period end) 53 68 (15) (22.1) % Total average units 11,814 12,574 (760) (6.0) % RevPAR $ 4,189 $ 3,969 $ 220 5.5 % Weighted average occupancy 82.8 % 80.4 % 240 bps n/a RevPOR $ 5,061 $ 4,934 $ 127 2.6 % Same Community Operating Results and Data Resident fees $ 446,372 $ 423,854 $ 22,518 5.3 % Facility operating expense $ 294,741 $ 280,450 $ 14,291 5.1 % Number of communities 52 52 — — % Total average units 8,940 8,937 3 — % RevPAR $ 4,161 $ 3,952 $ 209 5.3 % Weighted average occupancy 84.1 % 82.4 % 170 bps n/a RevPOR $ 4,950 $ 4,795 $ 155 3.2 % The decrease in the segment's resident fees was primarily attributable to the disposition of communities, primarily though lease terminations, since the beginning of the prior year, which resulted in $26.7 million less in resident fees during the year ended December 31, 2025 compared to the prior year.
Holders of the 2029 Notes may convert all or any portion of their 2029 Notes at their option at any 54 time prior to the close of business on the business day immediately preceding July 15, 2029, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2024 (and only during such calendar quarter), if the last reported sale price of our the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2029 Notes on each such trading day; or (3) upon the occurrence of specified corporate events.
Holders of the 2029 Notes may convert all or any portion of their 2029 Notes at their option at any time prior to the close of business on the business day immediately preceding July 15, 2029, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2024 (and only during such calendar quarter), if the last reported sale price of our the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2029 Notes on each such trading day; or (3) upon the occurrence of specified corporate events.
Therefore, if an event of default has occurred under any of our debt or lease documents, subject to cure provisions in certain instances, the respective lender or lessor would have the right to declare all the related outstanding amounts of indebtedness or cash lease obligations immediately due and payable, to foreclose on our mortgaged communities, to terminate our leasehold interests, to foreclose on other collateral securing the indebtedness and leases, to discontinue our operation of leased communities, and/or to pursue other remedies available to such lender or lessor.
Therefore, if an event of default has occurred under any of our debt 55 or lease documents, subject to cure provisions in certain instances, the respective lender or lessor would have the right to declare all the related outstanding amounts of indebtedness or cash lease obligations immediately due and payable, to foreclose on our mortgaged communities, to terminate our leasehold interests, to foreclose on other collateral securing the indebtedness and leases, to discontinue our operation of leased communities, and/or to pursue other remedies available to such lender or lessor.
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. • RevPAR , or average monthly senior housing resident fee revenue per available unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding revenue for private duty services provided to seniors living outside of our communities and entrance fee amortization), divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the period.
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. • RevPAR , or average monthly senior housing resident fee revenue per available unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding revenue for private duty services provided to seniors living outside of our communities), divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the period.
We review the adequacy of our accruals related to these liabilities on an ongoing basis, using historical claims, actuarial valuations, third-party administrator estimates, consultants, advice from legal counsel, and industry data, and adjust accruals periodically. Estimated costs related to these self-insurance programs are accrued based on known claims and projected claims incurred but not yet reported.
We review the adequacy of our accruals related to these liabilities on an ongoing basis, using historical claims, actuarial valuations, third-party administrator estimates, 57 consultants, advice from legal counsel, and industry data, and adjust accruals periodically. Estimated costs related to these self-insurance programs are accrued based on known claims and projected claims incurred but not yet reported.
In addition, following certain corporate events that occur prior to the maturity date or following the issuance of a notice of redemption, we will 53 increase the conversion rate for a holder who elects to convert its 2026 Notes in connection with such a corporate event or who elects to convert any 2026 Notes called (or deemed called) for redemption during the related redemption period in certain circumstances.
In addition, following certain corporate events that occur prior to the maturity date or following the issuance of a notice of redemption, we will increase the conversion rate for a holder who elects to convert its 2026 Notes in connection with such a corporate event or who elects to convert any 2026 Notes called (or deemed called) for redemption during the related redemption period in certain circumstances.
Under the 2029 Notes Indenture, we will not be obligated to deliver any shares of common stock to any holder upon any conversion of the 2029 Notes whereby such holder would beneficially own a number of shares of Company common stock in excess of 19.9% of the total number of shares of Company common stock issued and outstanding immediately following such conversion.
Under the 2029 Notes Indenture, we will not be obligated to deliver any shares of common stock to any holder upon any conversion of the 2029 Notes 53 whereby such holder would beneficially own a number of shares of Company common stock in excess of 19.9% of the total number of shares of Company common stock issued and outstanding immediately following such conversion.
In estimating the recoverability of asset groups for purposes of our long-lived asset impairment testing, we utilize future cash flow projections that are generally developed internally. Any estimates of future cash flow projections necessarily involve predicting unknown future circumstances and events and require significant management judgments and estimates.
In estimating the recoverability of asset groups for purposes of our long-lived asset impairment testing, we utilize future cash flow projections that are generally developed internally. Any estimates of future cash flow projections necessarily involve 56 predicting unknown future circumstances and events and require significant management judgments and estimates.
Financial Statements and Supplementary Data" for additional information on the convertible senior notes transactions. 2029 Convertible Senior Notes On September 30, 2024, we entered into privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with certain holders (the "Investors") of the 2026 Notes.
Financial Statements and Supplementary Data" for additional information on the convertible senior notes transactions. 2029 Convertible Senior Notes On September 30, 2024, we entered into privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with certain holders of the 2026 Notes.
Our management uses RevPAR for decision making and components of executive compensation, and we believe the measure provides useful information to investors, because the measure is an indicator of senior housing resident fee revenue performance that reflects the impact of both senior housing occupancy and rate. • RevPOR , or average monthly senior housing resident fee revenue per occupied unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding revenue for private duty services provided to seniors living outside of our communities and entrance fee amortization), divided by the weighted average number of occupied units in the corresponding portfolio for the period, divided by the number of months in the period.
Our management uses RevPAR for decision making and components of executive compensation, and we believe the measure provides useful information to investors, because the measure is an indicator of senior housing resident fee revenue performance that reflects the impact of both senior housing occupancy and rate. • RevPOR , or average monthly senior housing resident fee revenue per occupied unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding revenue for private duty services provided to seniors living outside of our communities), divided by the weighted average number of occupied units in the corresponding portfolio for the period, divided by the number of months in the period.
The operating results exclude natural disaster expense and related insurance recoveries. We define our same community portfolio as communities consolidated and operational for the full period in both comparison years.
The 40 operating results exclude natural disaster expense and related insurance recoveries. We define our same community portfolio as communities consolidated and operational for the full period in both comparison years.
We measure RevPOR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory 42 Care, and CCRCs segments.
We measure RevPOR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments.
These segments were determined based on the way that our chief operating decision maker organizes our business activities for making operating decisions, assessing performance, developing strategy, and allocating capital resources. Discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.
These segments were determined based on the way that our chief operating decision maker organizes our business activities for making operating decisions, assessing performance, developing strategy, and allocating capital resources. Discussion of our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below.
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 GAAP. As of December 31, 2024, we had three reportable segments: Independent Living; Assisted Living and Memory Care; and CCRCs.
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 GAAP. As of December 31, 2025, we had three reportable segments: Independent Living; Assisted Living and Memory Care; and CCRCs.
As of December 31, 2024, we are in compliance with the financial covenants of our debt agreements and long-term leases. Summary of Contractual Obligations The following table presen ts a summary of our material indebtedness and lease obligations, as of December 31, 2024.
As of December 31, 2025, we are in compliance with the financial covenants of our debt agreements and long-term leases. Summary of Contractual Obligations The following table presen ts a summary of our material indebtedness and lease obligations, as of December 31, 2025.
Adjusted EBITDA has material limitations as a performance measure, including: (i) excluded interest and income tax are necessary to operate our business under our current financing and capital structure; (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.
Adjusted EBITDA has material limitations as a performance measure, including: (i) excluded interest and income tax are necessary to operate our business under our current financing and capital structure; (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. 58 The table below reconciles Adjusted EBITDA from net income (loss).
Discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found in "Item 7.
Discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in "Item 7.
As of December 31, 2024, our long-term variable rate debt had a weighted average interest rate of 6.89%. We are subject to market risks from changes in interest rates and increases or decreases in prevailing interest rates would change our payment obligations on our variable-rate obligations.
As of December 31, 2025, our long-term variable-rate debt had a weighted average interest rate of 6.18%. We are subject to market risks from changes in interest rates and increases or decreases in prevailing interest rates would change our payment obligations on our variable-rate obligations.
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.
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.
Those assumptions include asset holding periods, future revenues, facility operating expenses, and cash flows, including sales proceeds that we would receive upon a sale of the assets using estimated capitalization rates in the case of communities. We corroborate the estimated capitalization rates we use in these calculations with capitalization rates observable from recent market transactions.
Those assumptions include asset holding periods, future revenues, facility operating expenses, and cash flows, including sales proceeds that we would receive upon a sale of the assets. We corroborate the estimated asset sale proceeds we use in these calculations with capitalization rates or sales prices observable from recent market transactions.
O ur inability to obtain refinancing proceeds sufficient to cover 2026 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 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.
Adjusted Free Cash Flow has material limitations as a liquidity measure, including: (i) it does not represent cash available for dividends, share repurchases, or discretionary expenditures since certain non-discretionary expenditures, including mandatory debt principal payments, are not reflected in this measure; (ii) the cash portion of non-recurring charges related to gain/loss on facility lease termination generally represent charges/gains that may significantly affect our liquidity; and (iii) the impact of timing of cash expenditures, including the timing of non-development capital expenditures, limits the usefulness of the measure for short-term comparisons.
Adjusted Free Cash Flow has material limitations as a liquidity measure, including: (i) it does not represent cash available for dividends, share repurchases, or discretionary expenditures since certain non-discretionary expenditures, including mandatory debt principal payments, are not reflected in this measure; (ii) the cash portion of non-recurring charges related to gain/loss on facility lease termination generally represent charges/gains that may significantly affect our liquidity; and (iii) the impact of timing of cash expenditures, including the timing of non-development capital expenditures, limits the usefulness of the measure for short-term comparisons. 59 The table below reconciles Adjusted Free Cash Flow from net cash provided by operating activities.
Over the near-term, we expect that our liquidity requirements will primarily arise from: • working capital; • operating costs such as labor costs, severance costs, general and administrative expense, and supply costs; • debt, interest, and lease payments; • investment in our healthcare and wellness initiatives; • transaction consideration and related expenses, including consideration for the acquisition of 30 communities pursuant to agreements with certain of our lessors; • capital expenditures and improvements; • cash collateral required to be posted in connection with our financial instruments and insurance programs; and • other corporate initiatives (including information systems and other strategic projects).
Over the near-term, we expect that our liquidity requirements will primarily arise from: • working capital; • operating costs such as labor costs, severance costs, general and administrative expense, and supply costs; • debt, interest, and lease payments; • investment in our healthcare and wellness initiatives; • transaction consideration and related expenses; • capital expenditures and improvements; • cash collateral required to be posted in connection with our financial instruments and insurance programs; and • other corporate initiatives (including information systems and other strategic projects).
We currently estimate our historical principal sources of liquidity, primarily our cash flows from operations, together with cash balances on hand, cash equivalents, and marketable securities, 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 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.
Financial Statements and Supplementary Data." Long-Lived Asset Impairment As of December 31, 2024, our long-lived assets were comprised primarily of $4.6 billion and $1.1 billion of net property, plant and equipment and leasehold intangibles and operating lease right-of-use assets, respectively.
Financial Statements and Supplementary Data." Long-Lived Asset Impairment As of December 31, 2025, our long-lived assets were comprised primarily of $4.3 billion and $1.0 billion of net property, plant and equipment and leasehold intangibles and operating lease right-of-use assets, respectively.
The segment's same community facility operating expense for the year ended December 31, 2024 excludes $1.3 million of natural disaster expense. 45 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 years ended December 31, 2024 and 2023, including operating results and data on a same community basis.
The segment's same community facility operating expense for the year ended December 31, 2024 excludes $1.2 million of natural disaster expense. 44 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 years ended December 31, 2025 and 2024, including operating results and data on a same community 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 December 31, 2024, our liquidity was $389.3 million.
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 December 31, 2025, our liquidity was $377.7 million.
(2) Excludes deferred financing costs of $49.1 million as of December 31, 2024. (3) Represents contractual interest for all fixed rate obligations and interest on variable rate instruments at the December 31, 2024 rate applicable for each instrument excluding the impact of interest rate cap and swap agreements.
(2) Excludes deferred financing costs of $45.8 million as of December 31, 2025. (3) Represents contractual interest for all fixed-rate obligations and interest on variable rate instruments at the December 31, 2025 rate applicable for each instrument excluding the impact of interest rate cap and swap agreements.
During the year ended December 31, 2024, we increased our estimate of the amount of aggregate accrued liabilities for these programs based on recent claims experience, resulting in an increase to operating expenses of $13.5 million.
During the years ended December 31, 2025 and 2024, we increased our estimate of the amount of aggregate accrued liabilities for these programs based on recent claims experience, resulting in an increase to operating expenses of $2.5 million and $13.5 million, respectively.
We are required to spend approximately $28.0 million in aggregate for the 24-month period ending December, 31, 2026 for capital expenditures under certain of our community leases and approximately $125.0 million in aggregate thereafter under the initial lease terms of such leases.
We are required to spend approximately $23.0 million in aggregate for the 24-month period ending December, 31, 2027 for capital expenditures under certain of our community leases and approximately $116.0 million in aggregate thereafter under the initial lease terms of such leases.
During 2024, 2023, and 2022, we evaluated long-lived depreciable assets and lease right-of-use assets and determined that the carrying amount of these assets exceeded the undiscounted cash flows for certain of our communities. Estimated fair values were determined for these certain properties, and we recorded asset impairment charges.
During 2025, 2024, and 2023, we evaluated long-lived depreciable assets and lease right-of-use assets and determined that the carrying amount of these assets exceeded the undiscounted cash flows for certain of our communities. Estimated fair values were determined for these certain properties, and we recorded asset impairment charges. The following is a summary of asset impairment expense for these assets.
We are responsible for all operating costs, including repairs, property taxes, and insurance. As of December 31, 2024, the weighted average remaining lease term of our operating and financing leases was 10.3 and 0.8 years , respectively. The lease terms generally provide for renewal or extension options, or in certain cases, purchase options.
We are responsible for all operating costs, including repairs and maintenance, property taxes, and insurance. As of December 31, 2025, the weighted average remaining lease term of our operating and financing leases was 9.9 and 6.3 years, respectively. The lease terms generally provide for renewal or extension options, or in certain cases, purchase options.
These estimates require significant judgment, and as a result these estimates are uncertain and our actual exposure may be different from our estimates. Subsequent changes in actual experience are monitored and estimates are updated as information becomes available. As of December 31, 2024, we accrued reserves of $117.1 million for general liability, professional liability, and workers' compensation programs.
These estimates require significant judgment, and as a result these estimates are uncertain and our actual exposure may be different from our estimates. Subsequent changes in actual experience are monitored and estimates are updated as information becomes available. As of December 31, 2025, we accrued liabilities of $109.0 million for general liability, professional liability, and workers' compensation programs.
General and administrative expense includes transaction, legal, and organizational restructuring costs of $7.9 million and $3.9 million for the years ended December 31, 2024 and 2023, respectively. Transaction costs include those directly related to acquisition, disposition, financing and leasing activity, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs.
General and administrative expense includes transaction, legal, and organizational restructuring costs of $18.1 million and $7.9 million for the years ended December 31, 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.
The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year, which resulted in $14.9 million less in facility operating expense during the year ended December 31, 2024 compared to the prior year.
The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities, primarily though lease terminations, since the beginning of the prior year, which resulted in $18.9 million less in facility operating expense during the year ended December 31, 2025 compared to the prior year.
We recorded an aggregate deferred federal, state, and local tax benefit of $41.5 million for the year ended December 31, 2023, which was offset by an increase in the valuation allowance of $49.1 million. Liquidity and Capital Resources This section includes the non-GAAP liquidity measure Adjusted Free Cash Flow.
We recorded an aggregate deferred federal, state, and local tax benefit of $43.7 million for the year ended December 31, 2024, which was offset by an increase in the valuation allowance of $47.3 million. Liquidity and Capital Resources This section includes the non-GAAP liquidity measure 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 $175.0 million to 180.0 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.
In the aggregate, we expect our full-year 2026 non-development capital expenditures, net of anticipated lessor reimbursements, to be approximately $175.0 million to $195.0 million. We anticipate that our 2026 capital expenditures will be funded from cash on hand, cash equivalents, cash flows from operations, and reimbursements from lessors.
We are highly leveraged and have significant debt and lease obligations. As of December 31, 2024, we had $4.1 billion of debt outstanding at a weighted average interest rate of 5.15%. As of such date, 88.4%, or $3.6 billion, of our total debt obligations represented non-recourse property-level mortgage financings.
We are highly leveraged and have significant debt and lease obligations. As of December 31, 2025, we had $4.3 billion of debt outstanding at a weighted average interest rate of 5.06%. As of such date, 89.7%, or $3.9 billion, of our total debt obligations represented non-recourse property-level mortgage financings.
We account for Capped Call Transactions separately from the 2026 Notes and recognized the cost as a reduction of additional paid-in capital in the year ended December 31, 2021 as the Capped Call Transactions are indexed to our common stock. Refer to Note 7 to the consolidated financial statements contained in "Item 8.
We account for Capped Call Transactions separately from the 2026 Notes and recognized the cost as a reduction of additional paid-in capital in the year ended December 31, 2021 as the Capped Call Transactions are indexed to our common stock.
We urge investors to review the following reconciliations of these non-GAAP financial measures from the most comparable financial measures determined in accordance with GAAP. 59 Adjusted EBITDA Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) excluding: benefit/provision for income taxes, non-operating income/expense items, and depreciation and amortization; 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.
Adjusted EBITDA Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) excluding: benefit/provision for income taxes, non-operating income/expense items, and depreciation and amortization; 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.
The increase in the segment's facility operating expense was partially offset by the disposition of communities since the beginning of the prior year, which resulted in $33.1 million less in facility operating expense during the year ended December 31, 2024 compared to the prior year.
The increase in the segment's facility operating expense was partially offset by the disposition of communities, primarily though lease terminations, since the beginning of the prior year, which resulted in $29.1 million less in facility operating expense during the year ended December 31, 2025 compared to the prior year.
During the current year, we recognized $8.6 million of non-cash impairment charges, primarily for certain leased communities with lower than expected occupancy and decreased future cash flow estimates over the remaining lease term and for property damage sustained at certain communities during the year.
During the year ended December 31, 2024, we recorded $8.6 million of non-cash impairment charges, primarily for certain leased communities with lower than expected occupancy and decreased future cash flow estimates over the remaining lease term and for property damage sustained at certain communities during the year. 47 Interest Expense.
We recorded an aggregate deferred federal, state, and local tax benefit of $43.7 million for the year ended December 31, 2024, which was offset by an increase in the valuation allowance of $47.3 million.
We recorded an aggregate deferred federal, state, and local tax benefit of $60.0 million for the year ended December 31, 2025, which was offset by an increase in the valuation allowance of $56.7 million.
For the year ended December 31, 2024, our cash lease payments for our operating leases were $257.5 million and for our financing leases were $28.8 million. The aggregate amounts of future minimum lease payments, including community, office, and equipment leases, recognized on the consolidated balance sheet as of December 31, 2024 are as follows (in millions).
For the year ended December 31, 2025, our cash lease payments for our operating leases were $222.6 million and for our financing leases were $12.0 million. The aggregate amounts of future minimum lease payments, including community, office, and equipment leases, recognized on the consolidated balance sheet as of December 31, 2025 are as follows (in millions).
The increase in reimbursed costs and costs incurred on behalf of managed communities was primarily attributable to an increase in community costs incurred as a result of broad inflationary pressure for communities managed in both periods, partially offset by terminations of management agreements subsequent to the beginning of the prior year. General and Administrative Expense.
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, partially offset by an increase in community labor costs incurred for communities managed in both years. General and Administrative Expense.
As of December 31, 2024, we had $3.0 billion of long-term fixed rate debt (including our $23.3 million principal amount of 2.00% convertible senior notes due 2026, our $369.4 million principal amount of 3.50% convertible senior notes due 2029, and our $9.4 million principal amount of the senior amortizing notes component of our tangible equity units), at a weighted average interest rate of 4.50%.
As of December 31, 2025, we had $3.3 billion of long-term fixed-rate debt (including our $23.3 million principal amount of 2.00% convertible senior notes due 2026 and our $369.4 million principal amount of 3.50% convertible senior notes due 2029), at a weighted average interest rate of 4.70%.
Indebtedness As of December 31, 2024, we had $4.1 billion of debt outstanding, at a weighted average interest rate of 5.15%. As of such date, 88.4%, or $3.6 billion, of our total debt obligations represented non-recourse property-level mortgage financings.
Indebtedness As of December 31, 2025, we had $4.3 billion of debt outstanding, at a weighted average interest rate of 5.06%. As of such date, 89.7%, or $3.9 billion, of our total debt obligations represented non-recourse property-level mortgage financings.
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 December 31, 2024, 10% of our owned communities were unencumbered by mortgage debt. We have completed the refinancing of all of our debt maturities due in 2025.
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 December 31, 2025, 11% of our owned communities were unencumbered by mortgage debt.
The increase in the segment's resident fees was partially offset by the disposition of communities since the beginning of the prior year, which resulted in $41.0 million less in resident fees during the year ended December 31, 2024 compared to the prior year.
The increase in the segment's resident fees was partially offset by the disposition of communities, primarily though lease terminations, since the beginning of the prior year, which resulted in $31.5 million less in resident fees during the year ended December 31, 2025 compared to the prior year.
The segment's same community facility operating expense for the year ended December 31, 2024 excludes $5.3 million of natural disaster expense. 46 CCRCs Segment The following table summarizes the operating results and data for our CCRCs segment for the years ended December 31, 2024 and 2023, including operating results and data on a same community basis.
The segment's same community facility operating expense for the year ended December 31, 2025 and 2024 excludes $1.2 million and $4.7 million, respectively, of natural disaster expense. 45 CCRCs Segment The following table summarizes the operating results and data for our CCRCs segment for the years ended December 31, 2025 and 2024, including operating results and data on a same community basis.
Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the years ended December 31, 2024 and 2023 was primarily due to an increase in the tax expense resulting from the valuation allowance recorded against operating losses.
The difference between our effective tax rate for the years ended December 31, 2025 and 2024 was primarily due to a decrease in the tax expense resulting from the valuation allowance recorded against the benefit on operating losses.
Factors that could cause such differences include those described in this section and "Item 1A. Risk Factors" of this Annual Report on Form 10-K. 41 Executive Overview and Recent Developments For information regarding our business, including our strategy and recent developments regarding macroeconomic conditions, community acquisitions and community lease amendments, refer to "Item 1.
Factors that could cause such differences include those described in this section and "Item 1A. Risk Factors" of this Annual Report on Form 10-K. For information regarding our business, including our strategy and recent developments regarding community acquisitions, dispositions, and mortgage financings, refer to "Item 1. Business." Refer to Note 3 in "Item 8.
Our principal sources of liquidity have historically been from: • cash balances on hand, cash equivalents, and marketable securities; • cash flows from operations; • proceeds from our credit facilities; • funds generated through unconsolidated venture arrangements; • proceeds from mortgage financing or refinancing of various assets; • funds raised in the debt or equity markets; and • proceeds from the disposition of assets.
The change in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities. 48 Our principal sources of liquidity have historically been from: • cash balances on hand, cash equivalents, and marketable securities; • cash flows from operations; • proceeds from our credit facilities; • funds generated through unconsolidated venture arrangements; • proceeds from mortgage financing or refinancing of various assets; • funds raised in the debt or equity markets; and • proceeds from the disposition of assets.
In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio. 55 After giving effect to our planned acquisition transactions for 30 leased communities subsequent to December 31, 2024, the leases relating to substantially all of our remaining leased communities are fixed rate leases with annual escalators that are fixed.
In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio. The leases relating to substantially all of our leased communities are fixed-rate leases with annual escalators that are fixed.
As of December 31, 2024, $39.5 million of letters of credit and no cash borrowings were outstanding under our $100.0 million secured credit facility, and the facility had $60.5 million of availability.
As of December 31, 2025, $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.
Years Ended December 31, (in thousands) 2024 2023 Net income (loss) $ (201,994) $ (189,070) Provision (benefit) for income taxes 4,646 8,784 Equity in (earnings) loss of unconsolidated ventures — 3,996 Loss (gain) on debt modification and extinguishment, net 20,762 2,702 Non-operating loss (gain) on sale of assets, net (923) (1,441) Other non-operating (income) loss (9,376) (21,687) Interest expense 252,575 238,274 Interest income (19,162) (23,146) Income (loss) from operations 46,528 18,412 Depreciation and amortization 357,788 342,712 Asset impairment 8,557 40,572 Loss (gain) on sale of communities, net — (36,296) Operating lease expense adjustment (48,793) (45,739) Non-cash stock-based compensation expense 14,184 11,985 Transaction, legal, and organizational restructuring costs 7,930 3,892 Adjusted EBITDA $ 386,194 $ 335,538 60 Adjusted Free Cash Flow Adjusted Free Cash Flow is a non-GAAP liquidity measure that we define as net cash provided by (used in) operating activities before: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease assets and liabilities for lease termination, cash paid/received for gain/loss on facility operating lease termination, and lessor capital expenditure reimbursements under operating leases; plus: property and casualty insurance proceeds and proceeds from refundable entrance fees, net of refunds; less: non-development capital expenditures and payment of financing lease obligations.
Years Ended December 31, (in thousands) 2025 2024 Net income (loss) $ (262,746) $ (201,994) Provision (benefit) for income taxes (1,951) 4,646 Loss (gain) on debt modification and extinguishment, net 40,087 20,762 Non-operating loss (gain) on sale of assets, net — (923) Other non-operating (income) loss (3,802) (9,376) Interest expense 254,292 252,575 Interest income (12,382) (19,162) Income (loss) from operations 13,498 46,528 Depreciation and amortization 355,527 357,788 Asset impairment 71,349 8,557 Loss (gain) on sale of communities, net (2,368) — Loss (gain) on facility operating lease termination, net 4,139 — Operating lease expense adjustment (14,349) (48,793) Non-cash stock-based compensation expense 11,937 14,184 Transaction, legal, and organizational restructuring costs 18,086 7,930 Adjusted EBITDA $ 457,819 $ 386,194 Adjusted Free Cash Flow Adjusted Free Cash Flow is a non-GAAP liquidity measure that we define as net cash provided by operating activities before: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease assets and liabilities for lease termination, cash paid/received for gain/loss on facility operating lease termination, and lessor capital expenditure reimbursements under operating leases; plus: property and casualty insurance proceeds; less: non-development capital expenditures and payment of financing lease obligations.
The increase in the segment's resident fees was partially offset by the disposition of communities since the beginning of the prior year, which resulted in $14.2 million less in resident fees during the year ended December 31, 2024 compared to the prior year.
The increase was partially offset by the disposition of communities, primarily though lease terminations, since the beginning of the prior year, which resulted in $56.9 million less in resident fees during the year ended December 31, 2025 compared to the prior year.
As of December 31, 2024, we had $1.6 billion of operating and financing lease obligations, and for the twelve months ending December 31, 2025, we will be required to make approximately $240.0 million of cash lease payments in connection with our existing operating and financing leases (after giving effect to our planned acquisition transactions for 30 communities subsequent to December 31, 2024).
As of December 31, 2025, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending December 31, 2026, we will be required to make approximately $191.6 million of cash lease payments in connection with our existing operating and financing leases.
Years Ending December 31, Operating Lease Payments Financing Lease Payments Total Minimum Lease Payments 2025 $ 233.2 $ 10.7 $ 243.9 2026 182.0 7.1 189.1 2027 185.0 6.3 191.3 2028 182.5 6.1 188.6 2029 185.0 6.1 191.1 Thereafter 1,089.5 15.3 1,104.8 Total minimum lease payments $ 2,057.2 $ 51.6 $ 2,108.8 56 Debt and Lease Covenants Certain of our long-term debt and lease documents contain restrictions and financial covenants, such as those requiring us to maintain prescribed minimum liquidity, net worth, and stockholders' equity 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.
Years Ending December 31, Operating Lease Payments Financing Lease Payments Total Minimum Lease Payments 2026 $ 184.5 $ 7.1 $ 191.6 2027 187.3 6.5 193.8 2028 184.5 6.3 190.8 2029 187.0 6.3 193.3 2030 179.6 6.3 185.9 Thereafter 919.9 9.3 929.2 Total minimum lease payments $ 1,842.8 $ 41.8 $ 1,884.6 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.
We also had separate letter of credit facilities providing up to $37.0 million of letters of credit as of December 31, 2024 under which $35.7 million had been issued as of that date. Long-Term Leases As of December 31, 2024, we operated 266 communities under long-term leases (227 operating leases and 39 financing leases).
We also had separate letter of credit facilities providing up to $68.0 million of letters of credit as of December 31, 2025 under which $59.2 million had been issued as of that date. Long-Term Leases As of December 31, 2025, we operated 178 communities under long-term leases (169 operating leases and 9 financing leases).
As of December 31, 2024, we had $1.1 billion of long-term variable rate debt, at a weighted average interest rate of 6.89%. Increases in prevailing interest rates as a result of inflation or other factors will increase our payment obligations on our variable-rate obligations to the extent they are unhedged and may increase our future borrowing and hedging costs.
Increases in prevailing interest rates as a result of inflation or other factors will increase our payment obligations on our variable-rate obligations to the extent they are unhedged and may increase our future borrowing and hedging costs.
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.
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.
Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 21, 2024.
Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 17, 2025. 41 Comparison of Years Ended December 31, 2025 and 2024 Summary Operating Results The following table summarizes our overall operating results for the years ended December 31, 2025 and 2024.
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.
Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance.
If we undergo a fundamental change (as defined in the Indenture) prior to the maturity date, holders may require us to repurchase for cash all or any portion of their 2026 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
If we undergo a fundamental change (as defined in the Indenture) prior to the maturity date, holders may require us to repurchase for cash all or any portion of their 2026 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. 52 In connection with the offering of the 2026 Notes, we entered into privately negotiated capped call transactions ("Capped Call Transactions") with each of Bank of America, N.A., Royal Bank of Canada, Wells Fargo Bank, National Association or their respective affiliates (the "Capped Call Counterparties").
To support our strategy and to protect the value of our community portfolio and ensure that our communities are in appropriate physical condition, over the intermediate term, we expect that our community-level non-development capital expenditures, net of lessor reimbursements, will be at annual levels in a similar range of recent and 2025 projected per unit spend.
To support our strategy and to protect the value of our community portfolio and ensure that our communities are in appropriate physical condition, over the intermediate term, we expect that our community-level non-development capital expenditures, net of lessor reimbursements, will be at annual levels in a similar range of 2026 projected spend. 50 Over the longer term, we expect that we will also continue to invest in our development capital expenditures program through which we expand, reposition, and redevelop selected existing senior living communities where economically advantageous.
The change in net cash provided by (used in) financing activities was primarily attributable to a $560.1 million increase in debt proceeds compared to the prior year, including $147.1 million of proceeds from the issuance of convertible notes, partially offset by a $227.8 million increase in repayment of debt and financing lease obligations compared to the prior year.
The increase in net cash provided by financing activities was primarily attributable to a $152.4 million increase in debt proceeds compared to the prior year, partially offset by a $97.4 million increase in repayment of debt and financing lease obligations compared to the prior year.
However, investors should not consider these non-GAAP financial measures as a substitute for financial measures determined in accordance with GAAP, including net income (loss), income (loss) from operations, or net cash provided by (used in) operating activities.
Presentations of these non-GAAP financial measures are intended to aid investors in better understanding the factors and trends affecting our performance and liquidity. However, investors should not consider these non-GAAP financial measures as a substitute for financial measures determined in accordance with GAAP, including net income (loss), income (loss) from operations, or net cash provided by operating activities.
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. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party 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, gain/loss on facility operating lease termination, and transaction, legal, and organizational restructuring costs.
The following is a summary of asset impairment expense for these assets. 58 For the Years Ended December 31, (in millions) 2024 2023 2022 Operating lease right-of-use assets $ 4.6 $ 8.3 $ 13.7 Property, plant and equipment and leasehold intangibles, net 4.0 6.3 15.9 Total $ 8.6 $ 14.6 $ 29.6 These impairment charges are primarily due to lower than expected occupancy and decreased future cash flow estimates at certain communities, and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.
For the Years Ended December 31, (in millions) 2025 2024 2023 Property, plant and equipment and leasehold intangibles, net $ 69.4 $ 4.0 $ 6.3 Operating lease right-of-use assets 1.9 4.6 8.3 Total $ 71.3 $ 8.6 $ 14.6 These impairment charges are primarily due to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.
Included in our current liabilities is $111.1 million of the current portion of operating lease obligations, for which the associated right-of-use assets are excluded from current assets on our consolidated balance sheet.
As of December 31, 2025, our current liabilities exceeded current assets by $14.0 million. Included in our current liabilities is $75.7 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 consolidated balance sheets.
Development capital expenditures include community expansions, major community redevelopment and repositioning projects, and the development of new communities. 51 The following table summarizes our capital expenditures for the year ended December 31, 2024 for our consolidated business.
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 year ended December 31, 2025 for our consolidated business.
Years Ending December 31, Community Count Total Units 2025 58 6,464 2026 2 153 2027 — — 2028 1 116 2029 17 735 Thereafter 158 9,604 Subtotal 236 17,072 Communities subject to acquisition agreements 30 1,561 Total 266 18,633 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, net worth, and stockholders' equity levels and lease coverage ratios.
The existing lease maturities of our senior housing community leases as of December 31, 2025 are as follows (without giving effect to future renewals or extension options). 54 Years Ending December 31, Community Count Total Units 2026 2 152 2027 — 0 2028 1 116 2029 17 735 2030 — 0 Thereafter 158 9,605 Total 178 10,608 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 levels and lease coverage ratios.
Years Ended December 31, (in thousands) 2024 2023 Net cash provided by (used in) operating activities $ 166,177 $ 162,923 Net cash provided by (used in) investing activities (278,066) (113,364) Net cash provided by (used in) financing activities 142,061 (174,439) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 30,172 $ (124,880) Net cash provided by (used in) operating activities $ 166,177 $ 162,923 Distributions from unconsolidated ventures from cumulative share of net earnings — (430) Changes in assets and liabilities for lessor capital expenditure reimbursements under operating leases (16,362) (9,844) Non-development capital expenditures, net (186,755) (216,511) Property and casualty insurance proceeds 8,548 24,704 Payment of financing lease obligations (1,084) (8,473) Adjusted Free Cash Flow $ (29,476) $ (47,631)
Years Ended December 31, (in thousands) 2025 2024 Net cash provided by operating activities $ 218,030 $ 166,177 Net cash provided by (used in) investing activities (455,951) (278,066) Net cash provided by (used in) financing activities 201,089 142,061 Net increase (decrease) in cash, cash equivalents, and restricted cash $ (36,832) $ 30,172 Net cash provided by operating activities $ 218,030 $ 166,177 Changes in operating lease assets and liabilities for lease termination 5,000 — Changes in assets and liabilities for lessor capital expenditure reimbursements under operating leases (32,187) (16,362) Non-development capital expenditures, net (170,700) (186,755) Property and casualty insurance proceeds 3,875 8,548 Payment of financing lease obligations (1,195) (1,084) Adjusted Free Cash Flow $ 22,823 $ (29,476)
Total liquidity of $389.3 million as of December 31, 2024 included $308.9 million of unrestricted cash and cash equivalents (excluding restricted cash of $70.9 million), $60.5 million of availability on our secured credit facility, and $19.9 million of marketable securities.
Total liquidity of $377.7 million as of December 31, 2025 included $279.1 million of unrestricted cash and cash equivalents (excluding restricted cash of $63.9 million) and $98.6 million of availability on our secured credit facility. Total liquidity as of December 31, 2025 decreased $11.6 million from total liquidity of $389.3 million as of December 31, 2024.
Although we have interest rate cap or swap agreements in place for a majority of our long-term variable-rate debt, these agreements only limit our exposure to increases in interest rates above certain levels and generally must be renewed every one to three years.
Although we have interest rate cap or swap agreements in place for all of our $1.0 billion of outstanding long-term variable-rate debt as of December 31, 2025, these agreements only limit our exposure to increases in interest rates above certain levels and only for the remaining term of the existing interest rate cap or swap agreements.
The increase was partially offset by the disposition of communities since the beginning of the prior year which resulted in $55.2 million less in resident fees compared to the prior year.
The increase was partially offset by the disposition of communities, primarily though lease terminations, since the beginning of the prior year, which resulted in $49.2 million less in facility operating expense during the year ended December 31, 2025 compared to the prior year.
As of December 31, 2024, our $1.1 billion of outstanding long-term variable rate debt is indexed to SOFR plus a weighted average margin of 241 basis points.
As of December 31, 2025, we had $1.0 billion of long-term variable-rate debt, which is indexed to Secured Overnight Financing Rate ("SOFR") plus a weighted average margin of 244 basis points, at a weighted average interest rate of 6.18%.
(in thousands) Community-level capital expenditures, net (1) $ 150,939 Corporate capital expenditures, net 35,816 Non-development capital expenditures, net (2) 186,755 Development capital expenditures, net 637 Total capital expenditures, net $ 187,392 (1) Reflects the amount invested, net of lessor reimbursements of $17.0 million. (2) Amount is included in Adjusted Free Cash Flow.
(in thousands) Community-level capital expenditures, net (1) $ 144,335 Corporate capital expenditures, net 26,365 Non-development capital expenditures, net (2) 170,700 Development capital expenditures, net 13 Total capital expenditures, net $ 170,713 (1) Reflects the amount invested, net of lessor reimbursements of $32.6 million. (2) Amount is included in Adjusted Free Cash Flow.
No sinking fund is provided for the 2029 Notes. Our net cash proceeds from the exchange and issuance transactions, after subtracting fees, discounts and expenses, were $135.0 million. We intend to use the proceeds to fund acquisitions and for general corporate purposes.
No sinking fund is provided for the 2029 Notes. Our net cash proceeds from the exchange and issuance transactions, after subtracting fees, discounts and expenses, were $135.0 million. We recognized a $15.5 million loss on debt extinguishment in the year ended December 31, 2024 for the completed exchange and issuance transactions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−2 removed1 unchanged
Biggest changeFor our SOFR interest rate cap and swap agreements as of December 31, 2024, the weighted average fixed interest rate is 4.15%, and the weighted average remaining term is 0.7 years.
Biggest changeFor our SOFR interest rate cap and swap agreements as of December 31, 2025, the weighted average fixed interest rate is 4.25%, and the weighted average remaining term is 0.9 years. Many of our long-term variable-rate debt instruments include provisions that obligate us to obtain additional interest rate cap agreements upon the maturity of the existing interest rate cap agreements.
In the normal course of business, we enter into certain interest rate cap and swap agreements with major financial institutions to manage our risk above certain interest rates on variable rate debt. As of December 31, 2024, our $1.1 billion of outstanding long-term variable rate debt is indexed to SOFR plus a weighted average margin of 241 basis points.
In the normal course of business, we enter into certain interest rate cap and swap agreements with major financial institutions to manage our risk above certain interest rates on variable-rate debt. As of December 31, 2025, our $1.0 billion of outstanding long-term variable-rate debt is indexed to SOFR plus a weighted average margin of 244 basis points.
As of December 31, 2024, 72.8%, or $3.0 billion, of our long-term debt had a weighted average fixed interest rate of 4.50%. As of December 31, 2024, we had $1.1 billion of long-term variable rate debt, at a weighted average interest rate of 6.89%.
As of December 31, 2025, 75.8%, or $3.3 billion, of our long-term debt had a weighted average fixed interest rate of 4.70%. As of December 31, 2025, we had $1.0 billion of long-term variable-rate debt, at a weighted average interest rate of 6.18%.
Increase in Index (in basis points) Annual Interest Expense Increase (1) (in millions) 100 $ 2.9 200 4.3 500 8.1 1,000 13.2 (1) Amounts are after consideration of interest rate cap and swap agreements in place as of December 31, 2024. 62
Increase in Index (in basis points) Annual Interest Expense Increase (1) (in millions) 100 $ 4.1 200 5.5 500 6.5 1,000 6.5 (1) Amounts are after consideration of interest rate cap and swap agreements in place as of December 31, 2025. 60
The table below reflects the additional annual debt interest expense that would have resulted for the respective basis point increases in SOFR as of December 31, 2024.
The costs of obtaining additional interest rate cap agreements may offset the benefits of our existing interest rate cap agreements. The table below reflects the additional annual debt interest expense that would have resulted for the respective basis point increases in SOFR as of December 31, 2025.
Accordingly, our annual 61 interest expense related to long-term variable rate debt is directly affected by movements in SOFR.
Accordingly, our annual interest expense related to long-term variable-rate debt is directly affected by movements in SOFR. As of December 31, 2025, all $1.0 billion of our outstanding long-term variable-rate debt is subject to interest rate cap or swap agreements.
Removed
As of December 31, 2024, $1.0 billion, or 91%, of our long-term variable rate debt is subject to interest rate cap or swap agreements and $0.1 billion of our variable rate debt is not subject to any interest rate cap or swap agreements.
Removed
Many of our long-term variable rate debt instruments include provisions that obligate us to obtain additional interest rate cap agreements upon the maturity of the existing interest rate cap agreements. The costs of obtaining additional interest rate cap agreements may offset the benefits of our existing interest rate cap agreements.

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