Brentwood, Tennessee, November 6th / PRNewswire / -- Brookdale Senior Living Inc. (New York Stock Exchange ticker: BKD) ("Brookdale" or "the Company") announced its financial results for the quarter ending September 30, 2026.

Key Points

• In the third quarter of 2026, the net loss was $13.9 million, compared to $114.7 million in the third quarter of 2025. In the third quarter of 2026, after adjustments, the EBITDA was $124.3 million, representing a 12.0% increase from the third quarter of 2025.
• In the third quarter of 2026, consolidated available unit revenue ( RevPAR ) increased by 7.5% year-on-year.
• In the third quarter of 2026, the consolidated weighted average occupancy rate increased by 130 basis points year-on-year to 83.1%.
• Completed the acquisition of 17 communities and announced an agreement to purchase another 30 leased communities.
• As of now, in 2026, the community has generated approximately $180 million in cash revenue from sales.
• Upgraded the full-year guidance for 2026 to an adjusted EBITDA of $495 million to $502 million, with RevPAR growing year-on-year by 7.4% to 7.9%.

Brookdale CEO Nick Stengle stated: "In the third quarter, we continued to make significant progress towards our key objectives, with improvements in occupancy rates, pricing, net loss, and adjusted EBITDA. Although we achieved the quarterly adjusted EBITDA plan, we were unable to meet the RevPAR target due to a slowdown in occupancy rate growth, especially in the later stages of the quarter. Based on the continuation of the third-quarter occupancy rates, increased marketing efforts to enhance internal lead generation, and the expected impact of revenue and expenses resulting from a fire that occurred recently at the company's community in Clinton, Mississippi, which has 97 units, we have revised our 2026 guidance to an adjusted range of $495 million to $502 million, representing a RevPAR increase of 7.4% to 7.9%. We remain excited about seizing this highly attractive senior housing opportunity and believe that the company is still in a favorable position to achieve long-term adjusted EBITDA growth in the mid-to-high single digits in the future."

2026 Third Quarter Financial Results Summary

Summary of Consolidated Operating Results and Indicators:

Summary of community operation results and indicators:

Occupancy Rate Trend Summary

Recent trend in merger occupancy rates:

Recent trends in community occupancy rates:

2026 Third Quarter vs 2025 Third Quarter Performance Overview

• Resident expenses: The decrease is mainly due to the handling by the community since the same period of the previous year, primarily caused by the termination of leases in the second half of 2025, which resulted in a reduction of resident expenses by $106.4 million in the third quarter of 2026.
• This decline was offset by a 5.4% increase in the same community RevPAR, which includes a 4.8% growth in the same community RevPOR as well as a 50-basis-point increase in the weighted average occupancy rate of the same community.
• Facility operating expenses: The decrease is mainly due to community handling since the same period of the previous year, resulting in a reduction of $87.3 million in facility operating expenses for the third quarter of 2026.
• This decline was offset by a 4.5% increase in the operating costs of community facilities. The main reasons for this increase were higher wage rates, anticipated insurance expenses, expected losses on accounts receivable, and increased utility and maintenance costs. However, the impact was partially mitigated by improved productivity, which reduced the number of working hours.
• General and administrative expenses: The decrease is mainly due to the company's efforts to reduce general and administrative expenses while carrying out community disposition and terminating management agreements.
• Cash facility operation lease payments: The decrease is mainly due to the disposal of communities through the termination of leases.
• Net loss: The decrease was mainly due to a reduction of non-cash impairment expenses by $58.2 million compared to the same period last year, as well as a reduction in depreciation and amortization expenses by $20.5 million, the latter being primarily due to disposals by the community since the same period last year.
• After adjustment, EBITDA: The growth is mainly due to the increase in costs for community residents, but it is partially offset by the increased operating costs of community facilities.

Trading and Financing Updates

Community Transactions

In October 2026, the company signed a final agreement to acquire 30 communities (1,152 units) that were currently leased by the company for $290 million. The company expects this transaction to reduce annual cash rent payments in 2027 by approximately $17.8 million, as the relevant leases were originally set to expire in 2032. The transaction is expected to be completed in the fourth quarter of 2026 and will require meeting customary closing conditions, and will be financed through available cash and non-recourse mortgage loans. If the acquisition of these 30 communities is completed, another lease involving 39 communities will be extended for 4 years until June 2036. As part of the revision, the company will have the option to exercise the existing fair market value purchase option under the lease at any time, rather than being limited to the time of lease expiration, provided that the present value yield on rent does not fall below 6.5%.

In July 2026, the company signed an agreement to acquire 17 communities that it previously rented for $157.4 million plus $2.6 million in transaction costs. In September 2026, the company completed this acquisition. The company funded the acquisition of these 17 communities through non-recourse mortgage financing and cash on hand.

Since July 1, 2026, the company has completed the sale of 11 of its own communities (856 units), generating a net cash income of $31.2 million (after deducting transaction costs). As of the beginning of 2026 to date, the company has completed the sale of 24 of its own communities (1,964 units), resulting in a net cash income of $178.6 million (after deducting transaction costs).

As previously disclosed, the company plans to sell another 5 of its own communities (270 units) in 2026. The delivery of the expected asset sales is subject to the fulfillment of multiple conditions, including (where applicable) obtaining regulatory approval. It cannot be guaranteed that these transactions will definitely be completed, and even if they are completed, the actual delivery time is uncertain.

Financing Transactions

In September 2026, the company secured $108 million in debt financing, which was secured by first-lien mortgages from 17 communities. The loan carries an interest rate based on SOFR plus 215 basis points, with an initial term of 5 years, and includes two one-year extension options that can be exercised upon meeting specific performance conditions.

In July 2026, the company obtained $248.9 million in debt financing, secured by non-recourse first mortgages from 45 communities. These same communities continued to provide guarantees for additional $518.5 million in outstanding mortgage loans with maturities in 2031 and 2032, respectively. The $248.9 million loan carried a fixed interest rate of 6.16% and was due in 2031. At the time of settlement, the company used proceeds from this loan to repay $244.1 million of mortgage debt that was scheduled to mature in 2027. Following this transaction, the company would have no mortgage debts maturing before 2028.

As of September 30, 2026, there was an outstanding principal balance of $23.3 million on the company's 2.00% convertible senior notes due in 2026 ("2026 Notes"). In October 2026, the company paid $23.3 million in cash and delivered 900,000 shares of the company's common stock to settle the maturing 2026 Notes. In conjunction with the maturity of the 2026 Notes, the company also settled a private negotiated cap-up call option agreement that was initially entered into when the 2026 Notes were issued in 2021. This cap-up call option covered the number of shares corresponding to the initial principal amount of $230 million of the 2026 Notes. As a result of the settlement of this cap-up call option transaction, the company received $45.9 million in cash and 400,000 shares of the company's common stock, which will be held as treasury stock.

Liquidity

As of September 30, 2026, the company's total liquidity amounted to $523.6 million, which includes $323.4 million in unrestricted cash and cash equivalents (excluding $73.2 million in restricted cash), $24.7 million in marketable securities, and $175.6 million in available credit lines guaranteed by the company. As of September 30, 2026, total liquidity had decreased by $42.3 million compared to June 30, 2026.

Outlook for 2026

After reflecting on the company's recent occupancy rates and providing outlooks for the fourth quarter, the company has revised its full-year guidance for 2026 as follows:

The 2026 annual guidance reflects management's current expectations regarding the following matters:

• Trading Activities
• Recently, a fire broke out in a community located in Clinton, Mississippi, which has 97 units and is currently vacant, affecting the current estimates for revenue and expenses in the fourth quarter.

The adjustments between the non-GAAP financial indicators mentioned in the above guidelines and the most comparable GAAP financial indicators are difficult to provide without making unreasonable efforts, as it is hard to predict the timing or amount of items required to adjust the adjusted EBITDA with the company's net income (loss). Fluctuations in the timing or amount of these adjustment items may have a significant impact on the company's future GAAP results.

Additional information

The company will publish supplementary information related to third-quarter performance, updated investor presentation materials, and copies of this financial report press release on its website brookdaleinvestors.com. The supplementary information and copies of this press release will also be provided as attachments to the 8-K form submitted to the U.S. Securities and Exchange Commission (SEC).

Performance Teleconference

Brookdale Management will hold a teleconference at 8:30 a.m. Eastern Time on November 6, 2026, to discuss the financial results for the third quarter.

The live webcast of the teleconference will be available to the public for listening only, with the URL being brookdaleinvestors.com. Please set aside some extra time before the meeting starts to download the software required to listen to the webcast. After the meeting, a replay will be available on the website.

About Brookdale Senior Living

Brookdale Senior Living Inc is a leading operator of senior living communities in the United States. As of September 30, 2026, the company operates 529 communities in 41 states, serving approximately 45,000 residents. Brookdale is committed to enriching the lives of seniors through compassionate care, clinical expertise, and exceptional service. The company operates independent living, assisted living, memory care, and continuing care retirement communities through its affiliated organizations, providing tailored solutions to help seniors live with dignity, connection, and purpose. Leveraging its extensive experience in healthcare, hospitality, and real estate, Brookdale creates opportunities for health, personal growth, and meaningful relationships in an environment that feels like home. Guided by the four pillars of passion, courage, collaboration, and trust, Brookdale is dedicated to providing exceptional value and redefining senior living for a brighter and healthier future. Brookdale's shares are traded on the New York Stock Exchange under the symbol BKD. For more information, please visit brookdale.com, or follow Brookdale on Facebook and YouTube.

RevPAR and RevPOR Definitions

RevPAR, which refers to the average monthly income of elderly residents from housing costs per available unit, is defined as the resident cost income of the corresponding company portfolio during that period (excluding income from private nursing services provided for the elderly living outside the company community), divided by the weighted average number of available units during that period, and then divided by the number of months in that period.

RevPOR, which refers to the average monthly income of elderly residents from housing, is defined as the total income from resident fees for the corresponding company portfolio during that period (excluding income from private nursing services provided to elderly individuals residing outside the company's community), divided by the weighted average number of occupied units during that period, and then divided by the number of months in that period.

Safe Harbor Statement

Certain statements in this press release and related earnings conference calls may constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties, including all non-historical factual statements, as well as statements regarding the company's intentions, beliefs, or expectations. Forward-looking statements can typically be identified by words such as "may," "will," "should," "can," "could," "potentially," "intends," "expects," "strives," "seeks," "projects," "estimates," "believes," "plans," "predicts," "continues," "plans," "goals," etc., and include statements regarding the company's expected financial and operating results. These forward-looking statements are based on certain assumptions and expectations, and the company's ability to actually achieve the predicted results or future plans and strategies is itself uncertain. Although the company believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, there is no guarantee that these assumptions or expectations will be realized, and actual results and performance may differ significantly from the predictions.Factors that may have a significant adverse effect on the company's operations and future prospects, or that could lead to events or circumstances differing from those stated in the forward-looking statements, include but are not limited to: adverse events affecting the elderly's ability to pay for residential fees, such as economic downturns, a weak housing market, consumer confidence, or a sluggish stock market, as well as unemployment among household members; the impact of declines in elderly housing construction and development, lower occupancy rates in the industry, and increased competition; conditions in the housing market, regulatory changes, natural disasters, and climate change in areas where the company's business is concentrated; termination of residential agreements with residents and resulting vacancies in leased living spaces; changes in reimbursement rates, methods, or timing under government reimbursement programs (including Medicare and Medicaid); failure to maintain the security and functionality of the company's information systems, inability to prevent cyberattacks or data breaches, or non-compliance with applicable privacy and consumer protection laws, including HIPAA; the company's ability to complete capital expenditures as planned; the company's ability to identify and pursue development, investment, and acquisition opportunities, as well as to successfully integrate acquisitions; competition in asset acquisitions; the company's ability to complete pending or anticipated dispositions, acquisitions, or other transactions according to agreed terms, including risks related to not meeting delivery conditions, lack of regulatory approval, or unexpected conditions attached to these transactions, as well as uncertainty regarding delivery times; and the company's future ability to identify and pursue such opportunities; risks associated with the implementation of the company's strategy, including measures taken to execute strategic priorities and their impact on performance; limitations on the company's ability to use net operating losses to offset future taxes; delays in obtaining regulatory approvals; risks related to the uncertainty of the duration of tariffs and trade conflicts; financial market turmoil or a decline in the assessed value of the company's assets or its operational performance, which may affect the company's ability to obtain financing or to extend or refinance debts upon maturity, as well as the company's financing costs; and the company's ability to generate sufficient cash flow to cover required interest, principal, and long-term lease payments, as well as to fund planned capital projects.Any impacts of non-compliance with the company's debt or lease agreements (including financial or other contractual obligations), including the risk of the lender or lessor declaring a cross-default in such cases, as well as the risk of property loss used by the company to secure leases and debts due to resulting lease terminations and foreclosure actions; the risk of being unable to renew, restructure, or extend leases before the end of existing lease terms, or to exercise purchase options; the impact of the company's debt and long-term leases on liquidity and operational capabilities; increases in market interest rates leading to higher debt costs for the company; the company's ability to obtain additional capital on acceptable terms; potential disruptions caused by the departure of key executives and management changes; intensified competition or shortages among employees, resulting in wage pressures, low unemployment rates, increases in minimum wages, and changes in overtime laws, as well as union activities; adverse rulings or resolutions in complaints against the company, including proposed class-action complaints; negative public opinion regarding any litigation, claims, or other legal or regulatory proceedings; costs associated with responding to government inquiries, reviews, audits, and investigations, as well as resulting adverse rulings; the costs and difficulties of complying with increasingly stringent and changing regulatory requirements, including new disclosure obligations; changes in employment-related laws and regulations or non-compliance with them; environmental pollution by the company in any communities; non-compliance with existing environmental laws; risks to the company and its business partners due to the current global economic situation and general economic factors, including inflation, commodity costs, fuel and other energy costs, labor market competition, salaries, wages, benefits, and insurance costs, interest rates, tax rates, tariffs, as well as geopolitical tensions or conflicts, and the impact of seasonal and other infectious diseases in the company's operating markets; actions by aggressive shareholders; and other risks detailed in the documents periodically submitted by the company to the U.S. Securities and Exchange Commission (SEC), including those listed in the company's 10-K annual reports and 10-Q quarterly reports.When considering forward-looking statements, attention should be paid to the risk factors and other cautionary statements contained in the aforementioned SEC document. Readers are advised not to rely excessively on any such forward-looking statements, which merely reflect the views of management as of the date of this press release and/or the related earnings conference. The company cannot guarantee future results, activity levels, performance, or achievements. Furthermore, except as required by law, the company explicitly declines any obligation to update or revise any forward-looking statements contained in this press release and/or the related earnings conference to reflect any changes in events, conditions, or circumstances on which those expectations or statements are based.

Non-GAAP Financial Indicators

This financial report press release contains adjusted EBITDA. This indicator is not calculated in accordance with Generally Accepted Accounting Principles (GAAP) in the United States (GAAP). Disclosing this non-GAAP financial indicator is intended to help investors better understand the factors and trends that affect the company's performance. However, investors should not regard this non-GAAP financial indicator as a substitute for GAAP financial indicators, including net income (loss) or operating income (loss). The company reminds investors that the amounts presented according to the company's definition of this non-GAAP financial indicator may not be comparable to similar indicators disclosed by other companies, as not all companies calculate non-GAAP indicators in the same manner. The company urges investors to review the adjustments made to this non-GAAP financial indicator in comparison with the most comparable GAAP financial indicators below.

After adjustment, EBITDA

After adjustment, EBITDA is a non-GAAP performance indicator. The company defines it as net income (loss) minus: income/expenses from income tax, non-operating income/expenses, as well as depreciation and amortization; further adjustments are made to exclude non-cash, non-operating, transactional, legal, cost reduction, or organizational restructuring items that management considers not to be part of the company's core operating performance and that could affect comparability across different periods. For the periods listed in this document, such additional items include non-cash impairment expenses, adjustments to operating lease expenses, non-cash equity incentive expenses, gains and losses from community sales, gains and losses from termination of facility operation leases, as well as costs related to transactions, legal, and organizational restructurings. Transaction costs include expenses directly related to acquisitions, dispositions, financing, leasing activities, and shareholder relations consulting matters, and are mainly composed of legal, financial, consulting, professional fees, and other third-party expenses. Legal costs include expenses related to proposed class actions. Organizational restructuring costs include those related to the company's efforts to reduce general and administrative expenses as well as changes in senior management, including severance payments.

The company believes that using the adjusted EBITDA as a performance indicator is helpful to investors for the following reasons: (i) it is one of the indicators used by the company's management for budgeting and other planning purposes, to assess the company's historical and future core operational performance, and to make daily operational decisions; (ii) by excluding items related to the company's financing and capital structure, as well as other items that management considers not to be part of the company's basic core operational performance and that could affect comparability across different periods, it provides an assessment of operational factors that management can influence in the short term, namely revenue and controllable cost structures; (iii) the company believes that research analysts and investors use this indicator to evaluate the company's operational results and to value companies in the same industry; (iv) the company uses this indicator as a component of executive compensation.

After adjustment, there are significant limitations to using EBITDA as a performance indicator, including: (i) the excluded interest and income tax are necessary for the company's operations under its current financing and capital structure; (ii) the excluded depreciation, amortization, and impairment expenses may represent wear and tear on the company's assets such as goodwill, and/or a decline in their value, and may indicate the need for future capital expenditures; and (iii) the company may experience similar income/expense items to those adjusted, such as gains or losses from asset sales, termination of facility operation leases, modifications and settlement of debts, non-cash equity incentive expenses, as well as transactional, legal, and other costs, which could significantly affect the company's operating results.

The following table adjusts the adjusted EBITDA with net income (loss).