bkd-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 001-32641

BROOKDALE SENIOR LIVING INC.

(Exact name of registrant as specified in its charter)


Delaware			20-3068069
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

105 Westwood Place,

Suite 400

Brentwood,

Tennessee

37027

(Address of principal executive offices)

(Zip Code)

(Registrant's telephone number, including area code) (615) 221-2250

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	BKD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 5, 2026, 238,789,796 shares of the registrant's common stock, $0.01 par value, were outstanding (excluding restricted stock units).

TABLE OF CONTENTS

BROOKDALE SENIOR LIVING INC.


		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets -
	As of March 31 , 202 6 (Unaudited) and December 31, 202 5	4

	Condensed Consolidated Statements of Operations -
	Three months ended March 31 , 202 6 and 202 5 (Unaudited)	5

	Condensed Consolidated Statements of Equity (Deficit) -
	Three months ended March 31 , 202 6 and 202 5 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows -
	Three months ended March 31 , 202 6 and 202 5 (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

Signatures		35

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except stock amounts)


	March 31, 2026		December 31, 2025
Assets	(Unaudited)
Current assets
Cash and cash equivalents	$	265,204	$	279,122
Marketable securities	4,939		—
Restricted cash	31,075		33,227
Accounts receivable, net	64,359		67,680
Assets held for sale	75,221		77,206
Prepaid expenses and other current assets, net	111,750		96,705
Total current assets	552,548		553,940
Property, plant and equipment and leasehold intangibles, net	4,230,837		4,272,697
Operating lease right-of-use assets	1,012,792		1,032,140
Restricted cash	37,374		30,659

Goodwill	27,321		27,321

Other assets, net	36,940		35,486
Total assets	$	5,897,812	$	5,952,243
Liabilities and Equity (Deficit)
Current liabilities
Current portion of long-term debt	$	82,616	$	77,492
Current portion of financing lease obligations	1,133		1,211
Current portion of operating lease obligations	76,833		74,522
Trade accounts payable	84,333		75,099

Accrued expenses	223,880		273,394
Refundable fees and deferred revenue	65,774		66,207
Total current liabilities	534,569		567,925
Long-term debt, less current portion	4,224,369		4,215,005
Financing lease obligations, less current portion	24,134		24,353
Operating lease obligations, less current portion	1,105,690		1,123,539

Deferred tax liability	5,332		6,316
Other liabilities	58,289		58,482
Total liabilities	5,952,383		5,995,620
Preferred stock, $0.01 par value, 50,000,000 shares authorized at March 31, 2026 and December 31, 2025; no shares issued and outstanding	—		—
Common stock, $0.01 par value, 400,000,000 shares authorized at March 31, 2026 and December 31, 2025; 249,316,153 and 248,274,011 shares issued and 238,788,628 and 237,746,486 shares outstanding as of March 31, 2026 and December 31, 2025, respectively (including 28,929 unvested restricted shares as of March 31, 2026 and December 31, 2025)	2,493		2,483
Additional paid-in-capital	4,353,777		4,358,077
Treasury stock, at cost; 10,527,525 shares at March 31, 2026 and December 31, 2025	(102,774)		(102,774)
Accumulated deficit	(4,309,431)		(4,302,539)
Total Brookdale Senior Living Inc. stockholders' equity (deficit)	(55,935)		(44,753)
Noncontrolling interest	1,364		1,376
Total equity (deficit)	(54,571)		(43,377)
Total liabilities and equity (deficit)	$	5,897,812	$	5,952,243

See accompanying notes to condensed consolidated financial statements.

BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)


	Three Months Ended March 31,
	2026		2025

Resident fees	$	722,456	$	777,454
Management fees	5,373		2,620
Reimbursed costs incurred on behalf of managed communities	37,027		33,790

Total revenue	764,856		813,864



Facility operating expense (excluding facility depreciation and amortization of $68,916 and $86,209, respectively)	511,470		556,987

General and administrative expense (including non-cash stock-based compensation expense of $3,680 and $3,979, respectively)	45,057		47,874
Facility operating lease expense	43,981		52,874
Depreciation and amortization	73,463		90,976
Asset impairment	6,115		1,787
Loss (gain) on sale of communities, net	(4,034)		—

Costs incurred on behalf of managed communities	37,027		33,790

Income (loss) from operations	51,777		29,576

Interest income	3,113		3,648
Interest expense:
Debt	(55,670)		(54,659)
Financing lease obligations	(1,700)		(5,600)
Amortization of deferred financing costs	(3,483)		(3,630)
Change in fair value of derivatives	1,301		(1,142)
Gain (loss) on debt modification and extinguishment, net	(2,786)		(35,220)


Other non-operating income (loss)	115		1,358
Income (loss) before income taxes	(7,333)		(65,669)
Benefit (provision) for income taxes	429		676
Net income (loss)	(6,904)		(64,993)
Net (income) loss attributable to noncontrolling interest	12		14
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders	$	(6,892)	$	(64,979)

Basic and diluted net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders	$	(0.03)	$	(0.28)




Weighted average shares used in computing basic and diluted net income (loss) per share	238,112		230,678

See accompanying notes to condensed consolidated financial statements.

BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(Unaudited, in thousands)


	Three Months Ended March 31,
	2026		2025
Total equity (deficit), balance at beginning of period	$	(43,377)	$	213,905

Common stock:
Balance at beginning of period	$	2,483	$	2,105
Shares issued for settlement of prepaid stock purchase contracts	—		296
Shares issued for warrant exercise	—		26
Restricted stock and restricted stock units, net	15		25
Shares withheld for employee taxes	(5)		(7)

Balance at end of period	$	2,493	$	2,445
Additional paid-in-capital:
Balance at beginning of period	$	4,358,077	$	4,352,991
Compensation expense related to restricted stock grants	3,680		3,979



Shares issued for settlement of prepaid stock purchase contracts	—		(296)
Shares issued for warrant exercise	—		(26)
Restricted stock and restricted stock units, net	(15)		(25)
Shares withheld for employee taxes	(7,965)		(4,749)

Balance at end of period	$	4,353,777	$	4,351,874
Treasury stock:
Balance at beginning and end of period	$	(102,774)	$	(102,774)


Accumulated deficit:
Balance at beginning of period	$	(4,302,539)	$	(4,039,847)

Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders	(6,892)		(64,979)

Balance at end of period	$	(4,309,431)	$	(4,104,826)
Noncontrolling interest:
Balance at beginning of period	$	1,376	$	1,430
Net income (loss) attributable to noncontrolling interest	(12)		(14)


Balance at end of period	$	1,364	$	1,416
Total equity (deficit), balance at end of period	$	(54,571)	$	148,135

Common stock share activity
Outstanding shares of common stock:
Balance at beginning of period	237,746		200,020

Shares issued for settlement of prepaid stock purchase contracts	—		29,636
Shares issued for warrant exercise	—		2,644
Restricted stock and restricted stock units, net	1,568		2,515
Shares withheld for employee taxes	(525)		(812)

Balance at end of period	238,789		234,003

See accompanying notes to condensed consolidated financial statements.

BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Three Months Ended March 31,
	2026		2025
Cash Flows from Operating Activities
Net income (loss)	$	(6,904)	$	(64,993)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss (gain) on debt modification and extinguishment, net	2,786		35,220
Depreciation and amortization, net	76,946		94,606
Asset impairment	6,115		1,787




Deferred income tax (benefit) provision	(985)		(1,157)
Operating lease expense adjustment	(720)		(3,853)
Change in fair value of derivatives	(1,301)		1,142
Loss (gain) on sale of assets, net	(4,034)		—

Non-cash stock-based compensation expense	3,680		3,979

Property and casualty insurance income	(140)		(1,415)

Changes in operating assets and liabilities:
Accounts receivable, net	3,321		(6,002)
Prepaid expenses and other assets, net	5,267		(5,104)
Prepaid insurance premiums financed with notes payable	(20,199)		(22,392)
Trade accounts payable and accrued expenses	(47,287)		(15,148)
Refundable fees and deferred revenue	(433)		4,719
Operating lease assets and liabilities for lessor capital expenditure reimbursements	4,775		2,013

Net cash provided by operating activities	20,887		23,402
Cash Flows from Investing Activities
Purchase of marketable securities	(4,939)		—
Sale and maturities of marketable securities	—		20,000
Capital expenditures, net of related payables	(46,476)		(41,817)
Acquisition of assets	—		(311,028)


Proceeds from sale of assets, net	22,059		—
Property and casualty insurance proceeds	140		1,415
Change in lease acquisition deposits, net	—		5,000


Other	(518)		(325)
Net cash provided by (used in) investing activities	(29,734)		(326,755)
Cash Flows from Financing Activities
Proceeds from debt	231,676		320,673
Repayment of debt and financing lease obligations	(217,924)		(70,338)




Payment of financing costs, net of related payables	(6,648)		(5,909)
Payments of employee taxes for withheld shares	(7,612)		(4,757)

Net cash provided by (used in) financing activities	(508)		239,669
Net increase (decrease) in cash, cash equivalents, and restricted cash	(9,355)		(63,684)
Cash, cash equivalents, and restricted cash at beginning of period	343,008		379,840
Cash, cash equivalents, and restricted cash at end of period	$	333,653	$	316,156

See accompanying notes to condensed consolidated financial statements.

BROOKDALE SENIOR LIVING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business

Brookdale Senior Living Inc. together with its consolidated subsidiaries ("Brookdale" or the "Company") is an operator of 568 senior living communities throughout the United States. The Company is committed to its mission of enriching the lives of the people it serves with compassion, respect, excellence, and integrity. The Company operates and manages independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). The Company's senior living communities and its comprehensive network help to provide seniors with care, connection, and services in an environment that feels like home. As of March 31, 2026, the Company owned 363 communities, leased 176 communities, and managed 29 communities.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position, results of operations, and cash flows of the Company for all periods presented. Certain information and footnote disclosures included in annual financial statements have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying unaudited condensed consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation, and net income (loss) is reduced by the portion of net income (loss) attributable to noncontrolling interests.

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, revenue, asset impairments, self-insurance reserves, performance-based compensation, allowance for credit losses, depreciation and amortization, leasing transactions, income taxes, and other contingencies. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from the original estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations.

3. Revenue

Resident fee revenue by payor source is as follows.


	Three Months Ended March 31,
	2026		2025
Private pay	94.4	%	93.9	%
Government reimbursement	4.4	%	4.8	%
Other third-party payor programs	1.2	%	1.3	%

Refer to Note 13 for disaggregation of revenue by reportable segment.

The payment terms and conditions within the Company's revenue-generating contracts vary by contract type and payor source, although terms generally include payment to be made within 30 days. Resident fee revenue for recurring and routine monthly services is generally billed monthly in advance under the Company's independent living, assisted living, and memory care residency agreements. Resident fee revenue for standalone or certain healthcare services is generally billed monthly in arrears. Additionally, certain of the Company's revenue-generating contracts include non-refundable fees that are generally billed and collected in advance or upon move-in of a resident under the Company's independent living, assisted living, and memory care residency agreements. Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied.

The Company had total deferred revenue (included within refundable fees and deferred revenue within the condensed consolidated balance sheets) of $51.7 million and $51.3 million, including $29.8 million and $29.1 million of monthly resident fees billed and received in advance, as of March 31, 2026 and December 31, 2025, respectively. For the three months ended March 31, 2026 and 2025, the Company recognized $39.4 million and $40.7 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2026 and 2025, respectively.

4. Property, Plant and Equipment and Leasehold Intangibles, Net

As of March 31, 2026 and December 31, 2025, net property, plant and equipment and leasehold intangibles consisted of the following.


(in thousands)	March 31, 2026		December 31, 2025
Land	$	538,001	$	544,824
Buildings and improvements	5,793,014		5,799,937
Furniture and equipment	1,269,993		1,259,410
Resident in-place lease intangibles	255,927		260,389
Construction in progress	36,277		35,788
Assets under financing leases and leasehold improvements	591,997		586,496
Property, plant and equipment and leasehold intangibles	8,485,209		8,486,844
Accumulated depreciation and amortization	(4,254,372)		(4,214,147)
Property, plant and equipment and leasehold intangibles, net	$	4,230,837	$	4,272,697

Long-lived assets with definite useful lives are depreciated or amortized on a straight-line basis over their estimated useful lives (or, in certain cases, the shorter of their estimated useful lives or the lease term) and are tested for impairment whenever indicators of impairment arise. The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $73.5 million and $91.0 million for the three months ended March 31, 2026 and 2025, respectively.

The Company recognized $6.1 million and $1.8 million for the three months ended March 31, 2026 and 2025, respectively, of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets.

As of March 31, 2026, eight communities in the Assisted Living and Memory Care segment and one community in the CCRCs segment were classified as held for sale, resulting in $75.2 million of net property, plant and equipment and leasehold

intangibles assets being recognized as assets held for sale within the condensed consolidated balance sheet. Subsequent to March 31, 2026, the Company completed the sale of three owned communities for cash proceeds of $88 million, net of transaction costs. The closings of the sales of the additional communities are subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals. There can be no assurance that the additional transactions will close or, if they do, when the actual closings will occur.

5. Debt

Long-term debt consists of the following.


(in thousands)	March 31, 2026		December 31, 2025
Fixed-rate mortgage notes payable due 2027 through 2036; weighted average interest rate of 4.91% and 4.88% as of March 31, 2026 and December 31, 2025, respectively	$	2,875,940	$	2,897,275
Variable-rate mortgage notes payable due 2027 through 2031; weighted average interest rate of 6.07% and 6.18% as of March 31, 2026 and December 31, 2025, respectively	1,064,116		1,048,308
Convertible notes payable due October 2026; interest rate of 2.00% as of both March 31, 2026 and December 31, 2025	23,297		23,297
Convertible notes payable due October 2029; interest rate of 3.50% as of both March 31, 2026 and December 31, 2025	369,445		369,445

Notes payable for insurance premium financing due 2026; interest rate of 5.40% as of March 31, 2026	19,575		—
Deferred financing costs, net	(45,388)		(45,828)
Total long-term debt	4,306,985		4,292,497
Current portion	82,616		77,492
Total long-term debt, less current portion	$	4,224,369	$	4,215,005

As of March 31, 2026, the current portion of long-term debt within the Company's condensed consolidated financial statements includes $6.2 million of mortgage notes payable secured by assets held for sale.

As of March 31, 2026, 89.3%, or $3.9 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

As of March 31, 2026, $1.4 million of letters of credit and no cash borrowings were outstanding under the Company's $100.0 million secured credit facility. The Company also had separate letter of credit facilities providing up to $68.0 million of letters of credit as of March 31, 2026 under which $59.2 million had been issued as of that date.

On March 31, 2026, the Company obtained an aggregate $184.9 million of debt on 7 communities and repaid $190.6 million of outstanding mortgage debt secured by 11 communities previously scheduled to mature in March 2027. The principal amounts of the new loans are secured by non-recourse first mortgages, bear interest at a fixed rate of 5.38%, are interest only for the first two years, and mature in April 2033.

Financial Covenants

Certain of the Company's debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum liquidity and net worth levels and debt service ratios, and requiring the Company not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. In addition, the Company's debt documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements and maintain insurance coverage.

The Company's failure to comply with applicable covenants, subject to cure provisions in certain instances, could constitute an event of default under the applicable debt documents. Many of the Company's debt documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Furthermore, the Company's mortgage debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of March 31, 2026, the Company is in compliance with the financial covenants of its debt agreements.

6. Leases

As of March 31, 2026, the Company operated 176 communities under long-term leases (167 operating leases and 9 financing leases). The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. In certain cases, the Company guarantees the performance and lease payment obligations of its subsidiary lessees under the master leases. 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 the Company's leased communities are fixed-rate leases with annual escalators that are fixed. The Company is responsible for all operating costs, including repairs and maintenance, property taxes, and insurance. The leases generally provide for renewal or extension options, or in certain cases, purchase options.

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 the Company to maintain prescribed minimum liquidity and net worth levels and lease coverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company's lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements and maintain insurance coverage.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable lease documents. Many of the Company's lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other lease and debt documents (including documents with other lessors and lenders). Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met. Furthermore, the Company's leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of March 31, 2026, the Company is in compliance with the financial covenants of its long-term lease agreements.

7. Litigation

The Company has been and is currently involved in litigation and claims incidental to the conduct of its business, which it believes are generally comparable to other companies in the senior living and healthcare industries. In addition, the Company has been and currently is involved in putative class action litigation regarding staffing at the Company's 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. The Company took a charge for this litigation of $7.0 million for the year ended December 31, 2024, representing its estimate of the Company’s ultimate cost to resolve such litigation, net of estimated probable insurance recoveries. The final outcome of the pending class action litigation is dependent on many factors that are difficult to predict. Accordingly the Company’s ultimate cost related to these matters may be materially different than the amount of the Company’s current estimate and accruals. The Company continues to vigorously defend against the pending putative class action litigation.

The Company maintains general liability, professional liability, excess liability, and other insurance policies in amounts and with coverage and deductibles the Company believes are appropriate, based on the nature and risks of its business, historical experience, availability, and industry standards. The Company's current policies provide for deductibles for each claim and contain various exclusions from coverage. The Company uses its wholly-owned captive insurance company for the purpose of insuring certain portions of its risk retention under its general and professional liability insurance programs. Accordingly, the Company is, in effect, self-insured for claims that are less than the deductible amounts, for claims that exceed the funding level of the Company's wholly-owned captive insurance company, and for claims or portions of claims that are not covered by such policies and/or exceed the policy limits.

The senior living and healthcare industries are continuously subject to scrutiny by governmental regulators, which could result in reviews, audits, investigations, enforcement actions, or litigation related to regulatory compliance matters. In addition, the Company is subject to various government reviews, audits, and investigations to verify compliance with Medicare and Medicaid programs and other applicable laws and regulations. The Centers for Medicare & Medicaid Services ("CMS") has engaged third-party firms to review claims data to evaluate appropriateness of billings. In addition to identifying overpayments, audit contractors can refer suspected violations to government authorities. In addition, states' Attorneys General vigorously enforce consumer protection laws as those laws relate to the senior living industry. An adverse outcome of government scrutiny may result in citations, sanctions, other criminal or civil fines and penalties, the refund of overpayments, payment suspensions,

termination of participation in Medicare and Medicaid programs, and damage to the Company's business reputation. The Company's costs to respond to and defend any such audits, reviews, and investigations may be significant.

8. Stock-Based Compensation

Grants of restricted stock units and stock awards under the Company's 2024 Omnibus Incentive Plan were as follows.


(in thousands, except for weighted average amounts)	Restricted Stock Unit and Stock Award Grants	Weighted Average Grant Date Fair Value		Total Grant Date Fair Value
Three months ended March 31, 2026	1,529	$	16.30	$	24,934

9. Earnings Per Share

Potentially dilutive common stock equivalents for the Company include convertible senior notes, unvested restricted stock, and restricted stock units. Prior to June 30, 2025, the potentially dilutive common stock equivalents for the Company also included warrants and prepaid stock purchase contracts.

As of March 31, 2026, $23.3 million in aggregate principal amount of the Company's 2.00% convertible senior notes due 2026 (the "2026 Notes") remain outstanding and the maximum number of shares issuable upon settlement of the 2026 Notes is 3.9 million (after giving effect to 1.0 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events). As of March 31, 2026, $369.4 million in aggregate principal amount of the Company’s 3.50% convertible senior notes due 2029 (the “2029 Notes”) remain outstanding and the maximum number of shares issuable upon settlement of the 2029 Notes is 55.0 million (after giving effect to 13.9 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding, after giving effect to the weighted average minimum number of shares issuable upon settlement of the Company's previously outstanding prepaid stock purchase contracts. The following table summarizes the computation of basic weighted average shares presented in the condensed consolidated statements of operations.


	Three Months Ended March 31,
(in thousands)	2026	2025


Weighted average common shares outstanding	238,112	201,042
Weighted average minimum shares issuable under purchase contracts	—	29,636
Weighted average shares outstanding - basic	238,112	230,678

Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. Diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. For the purposes of computing diluted EPS, weighted average shares outstanding do not include potentially dilutive securities that are anti-dilutive under the treasury stock method or if-converted method, and performance-based equity awards are included based on the attainment of the applicable performance metrics as of the end of the reporting period. The Company has the following potentially outstanding shares of common stock, which were excluded from the computation of diluted net income (loss) per share attributable to common stockholders in both periods as a result of the net loss.


	As of March 31,
(in millions)		2026	2025


2026 Notes at initial conversion rate		2.9	2.9

Incremental shares issuable upon certain events for 2026 Notes		1.0	1.0
2029 Notes at initial conversion rate		41.1	41.1
Incremental shares issuable upon certain events for 2029 Notes		13.9	13.9
Warrants		—	5.6
Restricted stock and restricted stock units		4.0	6.2


Total		62.9	70.7

10. Income Taxes

The difference between the Company's effective tax rate for the three months ended March 31, 2026 and 2025 was primarily due to an increase in tax expense from the change in valuation allowance relative to the tax benefit recorded on operational losses during the three months ended March 31, 2026.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $8.1 million for the three months ended March 31, 2026, which was partially offset by an increase to the valuation allowance of $7.1 million. The Company recorded an aggregate deferred federal, state, and local tax benefit of $15.9 million for the three months ended March 31, 2025, which was partially offset by an increase to the valuation allowance of $14.7 million.

The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized. The Company's valuation allowance as of March 31, 2026 and December 31, 2025 was $585.3 million and $578.2 million, respectively.

The increase in the valuation allowance for the three months ended March 31, 2026 and 2025 is the result of current operating losses during the three months ended March 31, 2026 and 2025 and by the anticipated reversal of future tax liabilities offset by future tax deductions.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three months ended March 31, 2026 and 2025 which are included in income tax expense or benefit for the period. As of March 31, 2026, tax returns for years 2021 through 2024 are subject to future examination by tax authorities. In addition, the net operating losses from prior years are subject to adjustment under examination.

11. Supplemental Disclosure of Cash Flow Information


	Three Months Ended March 31,
(in thousands)	2026		2025
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	52,227	$	53,173
Income taxes paid, net of (refunds)	$	356	$	7

Capital expenditures, net of related payables:
Capital expenditures - non-development, net	$

SEC Form 10-Q filed by Brookdale Senior Living Inc.