Brookdale Senior Living Inc.

Previous wording

We are the nation's premier operator of senior living communities, operating and managing 541 communities in 41 states as of June 30, 2026, with the ability to serve approximately 46,000 residents. We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry. We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). As of June 30, 2026, we owned 359 communities (32,294 units), leased 176 communities (10,456 units), and managed 6 communities (570 units).

Current wording

We are the nation's premier operator of senior living communities, operating and managing 529 communities in 41 states as of September 30, 2026, with the ability to serve approximately 45,000 residents. We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry. We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). As of September 30, 2026, we owned 366 communities (32,367 units), leased 159 communities (9,721 units), and managed 4 communities (359 units).

Previous wording

We have continued executing on our ongoing capital recycling program through which we have exited non-strategic or underperforming owned assets or leases. Such activities completed during the six months ended June 30, 2026 included the sale of 13 owned communities (1,108 units) for proceeds of $147.4 million, net of transaction costs, and the disposal of two leased communities (152 units) through lease terminations. For the six months ended June 30, 2026, we recognized a net gain on sale of assets of $49.4 million. Subsequent to June 30, 2026, we completed the sale of three owned communities (228 units) for proceeds of $2.5 million, net of transaction costs.

Current wording

We have continued executing on our ongoing capital recycling program through which we have exited non-strategic or underperforming owned assets or leases. Such activities completed during the nine months ended September 30, 2026 included the sale of 23 owned communities (1,767 units) for proceeds of $168.5 million, net of transaction costs, and the disposal of two leased communities (152 units) through lease terminations. For the nine months ended September 30, 2026, we recognized a net gain on sale of assets of $49.2 million. Subsequent to September 30, 2026, we completed the sale of one owned community (197 units) for proceeds of $10.1 million, net of transaction costs.

Previous wording

We plan to sell 13 additional owned communities (898 units) during 2026. The closings of the expected sales of assets are subject (where applicable) to our successful marketing of such assets on terms acceptable to us. Further, the closings of the expected sales of assets are, or will be, subject to the satisfaction of various conditions, including (where applicable) the receipt of regulatory approvals. There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

Current wording

We plan to sell five additional owned communities (270 units) during 2026. The closings of the expected sales of assets are subject to the satisfaction of various conditions, including (where applicable) the receipt of regulatory approvals. There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

Previous wording

The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $84.7 million less in facility operating expense during the three months ended June 30, 2026 compared to the prior year period. The decrease was partially offset by a 5.5% increase in same community facility operating expense primarily attributable to increases in wage rates, estimated insurance expense, maintenance expense, and estimated losses on accounts receivable.

Current wording

The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $87.3 million less in facility operating expense during the three months ended September 30, 2026 compared to the prior year period. The decrease was partially offset by a 4.5% increase in same community facility operating expense primarily attributable to increases in wage rates, estimated insurance expense, estimated losses on accounts receivable, utilities expense, and maintenance expense, partially offset by reduced labor hours worked through improved productivity.

Previous wording

The following table summarizes the consolidated operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) for the three months ended June 30, 2026 and 2025, including operating results and data on a same community basis. The same community portfolio excludes 20 communities, including 16 communities that we sold subsequent to June 30, 2026 or that we plan to sell in 2026. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

Current wording

The following table summarizes the consolidated operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) for the three months ended September 30, 2026 and 2025, including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

Previous wording

General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to $6.7 million of transaction costs for stockholder relations advisory matters in the prior year period and our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions. General and administrative expense includes transaction, legal, and organizational restructuring costs of $5.3 million and $12.2 million for the six months ended June 30, 2026 and 2025, 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. 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.

Current wording

General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions and management agreement terminations. General and administrative expense includes transaction, legal, and organizational restructuring costs of $1.6 million and $5.1 million for the three months ended September 30, 2026 and 2025, 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. 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.

Previous wording

Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily attributable to the termination of community leases subsequent to the prior year period.

Current wording

Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily attributable to the termination of community leases subsequent to the beginning of the prior year period.

Previous wording

Interest expense. The decrease in interest expense was primarily attributable to an increase in the fair value of interest rate derivatives in the current period and a decrease in interest expense on long-term debt primarily as a result of decreases in variable interest rate indices.

Current wording

Interest expense. The decrease in interest expense was primarily attributable to an increase in the fair value of interest rate derivatives in the current period.

Previous wording

Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the three months ended June 30, 2026 and 2025 was primarily attributable to expense recorded on operating income during the three months ended June 30, 2026 as opposed to a benefit recorded on operating losses during the three months ended June 30, 2025.

Current wording

Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the three months ended September 30, 2026 and 2025 was primarily attributable to a decrease in the valuation allowance recorded relative to the tax benefit recognized on operating losses for the three months ended September 30, 2026.

Previous wording

We recorded an aggregate deferred federal, state, and local tax expense of $23.5 million for the three months ended June 30, 2026, which was partially offset by a decrease to the valuation allowance of $18.7 million. We recorded an aggregate deferred federal, state, and local tax benefit of $9.1 million for the three months ended June 30, 2025, which was partially offset by an increase to the valuation allowance of $8.3 million.

Current wording

We recorded an aggregate deferred federal, state, and local tax benefit of $14.4 million for the three months ended September 30, 2026, which was partially offset by an increase to the valuation allowance of $10.9 million. We recorded an aggregate deferred federal, state, and local tax benefit of $27.8 million for the three months ended September 30, 2025, which was partially offset by an increase to the valuation allowance of $27.5 million.

Previous wording

The following table summarizes our overall operating results for the six months ended June 30, 2026 and 2025.

Current wording

The following table summarizes our overall operating results for the nine months ended September 30, 2026 and 2025.

Previous wording

The decrease in resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $106.4 million less in resident fees during the three months ended June 30, 2026 compared to the prior year period. The decrease was partially offset by a 5.5% increase in same community RevPAR, comprised of a 4.1% increase in same community RevPOR and a 110 basis point increase in same community weighted average occupancy.

Current wording

The decrease in resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, primarily through lease terminations in the second half of 2025, which resulted in $303.5 million less in resident fees during the nine months ended September 30, 2026 compared to the prior year period. The decrease was partially offset by a 5.5% increase in same community RevPAR, comprised of a 4.1% increase in same community RevPOR and a 110 basis point increase in same community weighted average occupancy.

Previous wording

The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $157.5 million less in facility operating expense during the six months ended June 30, 2026 compared to the prior year period. The decrease was partially offset by a 5.7% increase in same community facility operating expense primarily attributable to increases in wage rates, estimated insurance expense, maintenance expense, utilities expense, and estimated losses on accounts receivable.

Current wording

The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $243.2 million less in facility operating expense during the nine months ended September 30, 2026 compared to the prior year period. The decrease was partially offset by a 5.3% increase in same community facility operating expense primarily attributable to increases in wage rates, estimated insurance expense, maintenance expense, estimated losses on accounts receivable, and utilities expense.

Previous wording

The increase in net income was primarily attributable to a $49.4 million gain on sale of communities in the current period, a decrease in depreciation and amortization expense due to the disposition of communities since the beginning of the prior year period, and a $32.8 million loss on extinguishment of a financing obligation during the prior year period for the reacquisition of three communities previously subject to sale-leaseback transactions.

Current wording

The increase in net income was primarily attributable to a $59.8 million decrease in depreciation and amortization expense primarily due to the disposition of communities since the beginning of the prior year period, a $50.6 million decrease in non-cash impairment charges, a $49.2 million gain on the sale of communities in the current period, and a $32.8 million loss on extinguishment of a financing obligation recognized in the prior year period related to the reacquisition of three communities previously subject to sale-leaseback transactions.

Previous wording

The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the six months ended June 30, 2026 and 2025 including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

Current wording

The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the nine months ended September 30, 2026 and 2025 including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

Previous wording

The following table summarizes the operating results and data for our Independent Living segment for the six months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Current wording

The following table summarizes the operating results and data for our Independent Living segment for the nine months ended September 30, 2026 and 2025, including operating results and data on a same community basis.

Previous wording

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the six months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Current wording

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the nine months ended September 30, 2026 and 2025, including operating results and data on a same community basis.

Previous wording

The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $44.2 million less in resident fees during the three months ended June 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 3.9% increase in same community RevPOR and a 120 basis point increase in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.

Current wording

The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $125.2 million less in resident fees during the nine months ended September 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 3.9% increase in same community RevPOR and a 110 basis point increase in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.

Previous wording

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $73.1 million less in facility operating expense during the six months ended June 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community facility operating expense, primarily resulting from increases in wage rates, estimated insurance expense, maintenance expense, utilities expense, and estimated losses on accounts receivable. The segment's same community facility operating expense for the six months ended June 30, 2025 excludes $1.2 million of natural disaster expense.

Current wording

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $112.0 million less in facility operating expense during the nine months ended September 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community facility operating expense, primarily resulting from increases in wage rates, estimated insurance expense, maintenance expense, estimated losses on accounts receivable, and utilities expense. The segment's same community facility operating expense for the nine months ended September 30, 2025 excludes $1.2 million of natural disaster expense.

Previous wording

The following table summarizes the operating results and data for our CCRCs segment for the six months ended June 30, 2026 and 2025, including operating results and data on a same community basis.

Current wording

The following table summarizes the operating results and data for our CCRCs segment for the nine months ended September 30, 2026 and 2025, including operating results and data on a same community basis.

Previous wording

The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $26.0 million less in resident fees during the six months ended June 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 210 basis point increase in same community weighted average occupancy and a 2.2% increase in the segment's same community RevPOR. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase, and was partially offset by an occupancy mix shift to more independent living residents and lower skilled nursing occupancy.

Current wording

The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $44.2 million less in resident fees during the nine months ended September 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 160 basis point increase in same community weighted average occupancy and a 3.0% increase in the segment's same community RevPOR. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase, and was partially offset by an occupancy mix shift with lower skilled nursing occupancy.

Previous wording

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $15.1 million less in facility operating expense during the three months ended June 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates, maintenance expense, and estimated losses on accounts receivable.

Current wording

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $41.2 million less in facility operating expense during the nine months ended September 30, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community facility operating expense, primarily resulting from increases in wage rates, maintenance expense, and estimated insurance expense.

Previous wording

The following table summarizes other income and expense items in our operating results for the six months ended June 30, 2026 and 2025.

Current wording

The following table summarizes other income and expense items in our operating results for the nine months ended September 30, 2026 and 2025.

Previous wording

Management Fees. Management fees of $6.1 million for the six months ended June 30, 2026 include $5.4 million of management fees attributable to communities for which our management agreements were terminated during such period or subsequent to June 30, 2026.

Current wording

Management Fees. Management fees of $6.5 million for the nine months ended September 30, 2026 include $5.4 million of management fees attributable to communities for which our management agreements were terminated during such period.

Previous wording

General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to $5.1 million of transaction costs for stockholder relations advisory matters in the prior year period and our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions. General and administrative expense includes transaction, legal, and organizational restructuring costs of $4.5 million and $10.5 million for the three months ended June 30, 2026 and 2025, 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. 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.

Current wording

General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions and management agreement terminations and $8.0 million of transaction costs for stockholder relations advisory matters in the prior year period. General and administrative expense includes transaction, legal, and organizational restructuring costs of $6.9 million and $17.3 million for the nine months ended September 30, 2026 and 2025, 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. 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.

Previous wording

Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily attributable to the termination of community leases subsequent to the prior year period.

Current wording

Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily attributable to the termination of community leases subsequent to the beginning of the prior year period.

Previous wording

Asset Impairment. The increase in asset impairment was primarily attributable to changes in estimates of fair value for certain communities planned for disposition.

Current wording

Asset Impairment. During the nine months ended September 30, 2026, we recorded $14.5 million of non-cash impairment charges primarily due to changes in estimates of fair value for certain communities planned for disposition, property damage at certain communities, and recognition of losses for estimated selling costs upon classification of assets as held for sale. During the nine months ended September 30, 2025, we recorded $65.1 million of non-cash impairment charges, primarily related to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods.

Previous wording

Loss (gain) on sale of communities, net. During the six months ended June 30, 2026, we recognized a $49.4 million gain on sale of communities attributable to the sale of 13 communities for proceeds of $147.4 million, net of transaction costs.

Current wording

Loss (gain) on sale of communities, net. During the nine months ended September 30, 2026, we recognized a $49.2 million gain on sale of communities attributable to the sale of 23 communities for proceeds of $168.5 million, net of transaction costs.

Previous wording

Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the six months ended June 30, 2026 and 2025 was primarily attributable to expense recorded on operating income during the six months ended June 30, 2026 as opposed to a benefit recorded on operating losses during the six months ended June 30, 2025.

Current wording

Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the nine months ended September 30, 2026 and 2025 was primarily attributable to an increase in tax expense recorded on operating income, partially offset by the impact of a reduction to the valuation allowance expense recorded during the nine months ended September 30, 2026.

Previous wording

We recorded an aggregate deferred federal, state, and local tax expense of $15.4 million for the six months ended June 30, 2026, which was partially offset by a decrease in the valuation allowance of $11.6 million. We recorded an aggregate deferred federal, state, and local tax benefit of $24.9 million for the six months ended June 30, 2025, which was partially offset by an increase to the valuation allowance of $23.0 million.

Current wording

We recorded an aggregate deferred federal, state, and local tax expense of $1.0 million for the nine months ended September 30, 2026, which was partially offset by a decrease in the valuation allowance of $0.7 million. We recorded an aggregate deferred federal, state, and local tax benefit of $52.7 million for the nine months ended September 30, 2025, which was partially offset by an increase to the valuation allowance of $50.5 million.

Previous wording

The change in net cash provided by (used in) investing activities was primarily attributable to a $287.5 million decrease in cash paid for the acquisition of formerly leased or managed communities and a $146.3 million increase in net proceeds from the sale of communities compared to the prior year period. These changes were partially offset by a $20.0 million decrease in proceeds from sales and maturities of marketable securities and a $19.8 million increase in purchases of marketable securities compared to the prior year period.

Current wording

The decrease in net cash used in investing activities was primarily attributable to $160.4 million increase in net proceeds from the sale of communities and a $127.0 million decrease in cash paid for the acquisition of formerly leased or managed communities compared to the prior year period. These changes were partially offset by a $44.4 million increase in purchases of marketable securities and a $16.2 million increase in cash paid for capital expenditures compared to the prior year period.

Previous wording

The change in net cash provided by (used in) financing activities was primarily attributable to a $345.4 million increase in debt repayments and a $9.4 million increase in cash paid for financing costs compared to the prior year period, partially offset by a $98.9 million increase in debt proceeds and a $23.0 million increase in proceeds from our line of credit.

Current wording

The decrease in net cash provided by financing activities was primarily attributable to a $589.7 million increase in debt repayments and a $15.9 million increase in cash paid for financing costs compared to the prior year period, partially offset by a $455.8 million increase in debt proceeds and a $23.0 million increase in proceeds from our line of credit.

Previous wording

The increase in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities, partially offset by a $2.7 million decrease in property and casualty insurance proceeds compared to the prior year period.

Current wording

The decrease in Adjusted Free Cash Flow was primarily attributable to a $13.2 million increase in non-development capital expenditures and a $2.7 million decrease in property and casualty insurance proceeds compared to the prior year period, partially offset by the increase in net cash provided by operating activities.

Previous wording

We are highly leveraged and have significant debt and lease obligations. As of June 30, 2026, we had $4.3 billion of debt outstanding at a weighted average interest rate of 5.09%. As of such date, 88.9%, or $3.9 billion, of our total debt obligations represented non-recourse property-level mortgage financings.

Current wording

We are highly leveraged and have significant debt and lease obligations. As of September 30, 2026, we had $4.4 billion of debt outstanding at a weighted average interest rate of 5.24%. As of such date, 89.3%, or $4.0 billion, of our total debt obligations represented non-recourse property-level mortgage financings.

Previous wording

Subsequent to June 30, 2026, we entered into an agreement to acquire 17 communities (735 units) that are currently leased by us for a purchase price of approximately $157.0 million plus transaction costs. The acquisition is expected to close in the fourth quarter of 2026, subject to the satisfaction of customary closing conditions for real estate transactions. We expect to fund the acquisition through proceeds from non-recourse mortgage financing and cash on hand.

Current wording

In October 2026, we entered into a definitive agreement to acquire 30 communities (1,152 units) that are currently leased by us for a purchase price of $290.0 million. We expect to complete the acquisition transactions in the fourth quarter of 2026, subject to the satisfaction of customary closing conditions for real estate transactions. We expect to fund the acquisition of the 30 communities through proceeds from mortgage financing and cash on hand.

Previous wording

As of June 30, 2026, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending June 30, 2027, we will be required to make approximately $193.9 million of cash lease payments in connection with our existing operating and financing leases.

Current wording

As of September 30, 2026, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending September 30, 2027, we will be required to make approximately $170.0 million of cash lease payments in connection with our existing operating and financing leases (after giving effect to our planned acquisition transaction for 30 communities).

Previous wording

Total liquidity of $565.8 million as of June 30, 2026 included $370.4 million of unrestricted cash and cash equivalents (excluding restricted cash of $71.1 million), $19.9 million of marketable securities, and $175.6 million of availability on our secured credit facility. Total liquidity as of June 30, 2026 increased $188.2 million from December 31, 2025.

Current wording

Total liquidity of $523.6 million as of September 30, 2026 included $323.4 million of unrestricted cash and cash equivalents (excluding restricted cash of $73.2 million), $24.7 million of marketable securities, and $175.6 million of availability on our secured credit facility. Total liquidity as of September 30, 2026 increased $145.9 million from December 31, 2025.

Previous wording

Our actual liquidity and capital funding requirements depend on numerous factors, including our operating results, our actual level of capital expenditures, general economic conditions, and the cost of capital, as well as other factors described in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission ("SEC") on February 19, 2026. Since the amount of mortgage financing available for our communities is generally dependent on their appraised values and performance, decreases in their appraised values, including due to adverse changes in real estate market conditions, or their performance, could result in available mortgage refinancing amounts that are less than the communities’ maturing indebtedness. 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 June 30, 2026, 9% of our owned communities were unencumbered by mortgage debt.

Current wording

Our actual liquidity and capital funding requirements depend on numerous factors, including our operating results, our actual level of capital expenditures, general economic conditions, and the cost of capital, as well as other factors described in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission ("SEC") on February 19, 2026. Since the amount of mortgage financing available for our communities is generally dependent on their appraised values and performance, decreases in their appraised values, including due to adverse changes in real estate market conditions, or their performance, could result in available mortgage refinancing amounts that are less than the communities’ maturing indebtedness. 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 September 30, 2026, 7% of our owned communities were unencumbered by mortgage debt.

Previous wording

As of June 30, 2026, the current portion of long-term debt was $70.9 million, which includes $23.3 million of our 2.00% convertible senior notes due October 15, 2026. We have completed the refinancing of all of our mortgage debt maturities due in 2027. Our inability to obtain refinancing proceeds sufficient to cover 2028 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. Shortfalls in cash flows from estimated operating results or other principal sources of liquidity may have an adverse impact on our ability to fund our planned capital expenditures or to fund investments to support our strategy. In order to continue some of these activities at historical or planned levels, we may incur additional indebtedness or lease financing to provide additional funding. There can be no assurance that any such additional financing will be available or on terms that are acceptable to us.

Current wording

We have completed the refinancing of all of our mortgage debt maturities due in 2027. Our inability to obtain refinancing proceeds sufficient to cover 2028 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. Shortfalls in cash flows from estimated operating results or other principal sources of liquidity may have an adverse impact on our ability to fund our planned capital expenditures or to fund investments to support our strategy. In order to continue some of these activities at historical or planned levels, we may incur additional indebtedness or lease financing to provide additional funding. There can be no assurance that any such additional financing will be available or on terms that are acceptable to us.

Previous wording

Our capital expenditures for the six months ended June 30, 2026 are comprised of community-level and corporate capital expenditures. Community-level capital expenditures include maintenance expenditures (including routine maintenance of communities over $1,500 per occurrence), community renovations, unit upgrades (including unit turnovers over $500 per unit), and other major building infrastructure projects (including replacements of major building systems). Corporate capital expenditures include those for information technology systems and equipment and the remediation or replacement of assets as a result of casualty losses.

Current wording

Our capital expenditures for the nine months ended September 30, 2026 are comprised of community-level and corporate capital expenditures. Community-level capital expenditures include maintenance expenditures (including routine maintenance of communities over $1,500 per occurrence), community renovations, unit upgrades (including unit turnovers over $500 per unit), and other major building infrastructure projects (including replacements of major building systems). Corporate capital expenditures include those for information technology systems and equipment and the remediation or replacement of assets as a result of casualty losses.