Brookdale Senior Living Inc. (BKD) Earnings Call Transcript & Summary

Good morning, everybody, and thank you for joining us for Brookdale Senior Living's Investor Day. I'm Mike Grant, and I have the privilege of leading Investor Relations at Brookdale. So first, on behalf of the entire Brookdale team, I'd like to extend a warm welcome on this cold day to you all, both us joining us here in person in Nashville and those joining us online through the webcast. We have an exciting morning ahead of us. Before we get going, we want to remind you that our customary cautionary statements and safe harbors apply. You can see them here on the screen. During today's presentation, our remarks, including our answers to your questions, will include forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act. These statements are made as of today's date, and we expressly disclaim any obligation to update these statements in the future. Actual results and performance may differ materially from forward-looking statements. I'd encourage you to consult our risk factors that we have on file with the SEC on our Form 10-K, 10-Q and 8-K filings. Additionally, our presenters will discuss certain non-GAAP financial measures. After the conclusion of today's session, we will post our presentation to the Brookdale Investor Relations website, where you will be able to review the historical reconciliation of these non-GAAP measures to the most comparable GAAP financial measures. Turning now to our agenda. We will start with Nick Stengle, Brookdale's Chief Executive Officer. Nick will outline our company, our industry, our growth targets and the strategies that are underpinning that vision. We'll then have comments from Mary Sue Patchett, our Chief Operating Officer. Mary Sue will drill deeper into Brookdale operations and changes we have made to strengthen our performance. We will then take a roughly 15-minute break. Next, we will welcome Dawn Kussow, our Chief Financial Officer. Dawn will walk us through our financial results and our financial outlook for the next several years. Finally, we'll have a Q&A session where those attending here in Nashville can ask follow-up questions of Nick and the team. We will conclude with some brief closing comments. That's it for the logistics. So let's get started. Please welcome Nick Stengle, Brookdale's CEO.

Excellent. Thank you, Mike. Welcome, everybody, to Brookdale's 2026 Investor Day. As Mike indicated, my name is Nick Stengle, and I'm the Chief Executive Officer of Brookdale. For those of you in the room here today, welcome to Nashville. Thank you for braving the, we'll call it, snowmageddon, maybe ice capes that definitely befell much of our country and for sure, still impacting Nashville, as you guys can see out these beautiful windows here. Now I've been in the role for just under 4 months. I had the opportunity to meet many of you in this room. I've met many more shareholders, investors, many more prospective shareholders in that short period of time. And I want to just take a moment and thank each of you for first welcoming me to Brookdale, and second, for the very helpful insight, amazing engagement around Brookdale and the story that we are developing as we go here. For everyone -- everyone who is here on Investor Day, whether you're in the room or on the live stream, I want to thank you for your continued interest in Brookdale. I would also like to take this moment since I do have the platform, and I'd be remiss if I didn't do this, to thank the 33,000 associates who at this very moment are caring and serving our residents and are creating the spirit of what it means to be part of Brookdale, to be a customer of Brookdale and to trust Brookdale with your care and your needs. In fact, the storm from this last week really amplified and really highlighted the mission coming to life for our associates and for our residents. So I want to again thank each and every one of them. in this 24/7, 365-day a year type operation that we are in Brookdale. Now as you guys may note, our theme for today's event is enriching lives, driving values, and that is very deliberate in nature, and it's tied specifically to our mission, which is to enrich the lives of those we serve with compassion, respect, excellence and integrity. Now typically, when we say those words as Brookdale associates, obviously, we think first and foremost of our residents. Those are the more direct lives that we're enriching. But I will tell you, it's far broader than that. It's the families of the residents who trust their loved ones with us. It's the referral partners who connect us with prospective residents. It's our home health aids who come in to help care for their patients, our residents, hospice, chaplains, primary care physicians, heck, it's even the U.S. foods delivery truck guy who brings the food that we're going to prepare and serve to our residents. So we truly underpin our mission around enriching the lives of everyone we serve. And for today, I'm going to open up that aperture and say it's all our stakeholders. And for sure, everyone in this room is clearly a stakeholder with a vested interest in Brookdale. And hopefully, today, we'll be able to enrich your lives in some small, maybe even meaningful way, and we're definitely going to do with respect, compassion, excellence and integrity. Now we're going to take the next couple of hours going into far more detail on some of the items, but I did want to just take a moment and share a bit of the story of where Brookdale has come from, where it is most recently and really the majority of today's conversation will be about 2026 and the ongoing years. But as a brief snapshot, and we did pre-release these numbers on Wednesday, just over $3 billion in revenue in 2025. $458 million of adjusted EBITDA, beating our -- the midpoint of the upgraded guidance that we provided in Q3 back in October of 2025. And we ended the year at 83.5% for a fully weighted fourth quarter same community occupancy. Do note that we ended kind of a spot occupancy at 84.5%, so some great momentum there. Excited by the 83.5% growth -- continued growth of around 220 basis points to last year, but obviously, a lot of runway ahead of us. We'll talk about various milestones of occupancy that we are targeting. But really, at the end of the day, 100% is where we're headed, just as many of our communities have already achieved literally dozens of communities already at 100% occupancy with waitlists and just turning residents both out and in. Speaking of our community count, you'll see that number 517 in the lower left. Go ahead and pin that down in your brain, you'll be hearing that really throughout the day today, and that is going to be our stabilized consolidated community base that really is the go-forward plan. And we'll talk about some onesie-twosie things that we're going to contemplate where that number may move around. But fundamentally, in 2026, we'll stabilize at 517 communities. And you'll note the 33,000 residents that I mentioned earlier. Now as you take a look at kind of a map of Brookdale, there's that 517 number, first and foremost, again. We do span across 41 states. You can see by the color shading different levels of density based on the number of communities we have throughout the states, quite a bit on the West Coast, Washington State down to California. Texas, obviously, a very meaningful presence covering every urban market of Texas, whether it's Dallas, Fort Worth, San Antonio, Austin, Houston and really everything in between. Very good density in Florida, especially on the Peninsula, both the Atlantic side and the Gulf Coast side. North Carolina, then obviously here, Tennessee, right in our -- the back door of our own headquarters throughout Nashville, going all the way to Knoxville and off to Chattanooga. And the real point is we have that great spread, that great density, which I'll highlight the first statistic that's on this slide is that 53% of seniors aged 75 or older who really, that's the age when you start contemplating assisted living, there's an income qualifier, that's kind of a NIC's statistic are within 30-minute driving distance of a Brookdale community. The other thing I'll point out is that pie chart there. 74% in total of our capacity, so 56% AL, 18% memory care is what our unit capacity. So it's very much on the needs-based side of senior living and juxtapose that to the industry, so the overall NIC number, which is 52%. You'll note we do have 23% IL, a little bit more of the discretionary lifestyle choice part of assisted living and then a small little sliver of skilled nursing, 3%, all associated with independent living or assisted living, no real stand-alone skilled nursing facilities, though it is a small part of our business. One statistic that's not on here that I want to highlight it just based on a lot of the news from this last week, 94% of our revenue is tied to private pay. And again, some folks sometimes conflate nursing homes and nursing facilities and post-acute care and senior living, and they kind of conflate it all together, but that's truly not the case generally and for sure, not at Brookdale. So 94% of our revenue, private pay, the remaining 6%, a little bit of a mix of Medicaid, Medicare, long-term care insurance, VA and a bunch of other things. So I did want to highlight that. The last point I'll make on this slide, and it's in the statistic that's down in blue is that we own, truly own the real estate of 75% of our units with the remaining 25% being in triple net leases typically with various REITs. Speaking of kind of where we are, here's the ASHA's 2025 summary of the top 10 operators on the left side and the top 10 owners on the right side. I will point out the numbers on this slide are exactly as reported by ASHA nearly a year ago. So the Brookdale numbers do not foot with the rest of the presentation. We left it as is. Obviously, the numbers will be updated. But the relative position of where we are will stay the same even in 2026. And the first thing, hopefully, that jumps out is we are truly the largest operator of senior living real estate in the United States. Now as you scan up and down to some of our peer companies, so Discovery #2, LCS #3 and on down, you'll note many of them are management companies. And just to be clear, management companies manage the real estate on behalf of the real estate owner. Typically, they get a cut of revenue for -- as a fee. Sometimes they get to share a little bit in different performance incentives. But the real point I will make, the value of the real estate stays with the owner of the real estate. The expansion of the value as NOI grows as the management company puts effort into that real estate mostly stays with the owner of the real estate. The management company just gets a sliver of that value expansion. And as you will note in a bit here, that's a very small part of our business, the vast majority, obviously, being that we either own or lease real estate. Speaking of which as we take a look to the right side, we are the third largest owner of senior housing real estate. # 1 and 2, Welltower and Ventas, respectively, obviously, big public REITs. And again, as you scan up and down, you'll note a lot of the owners are REITs, investment managers, a few owner operators, but we are the largest in the #3 position, which really brings me to the first kind of foundational point, and I introduced these words, this concept during our Q3 earnings call several months ago. We are fundamentally an operating company. First and foremost, we are the largest. Fundamentally, that is what we do. However, we're built upon a foundation of real estate. And I will make the point today, as I made the point back in Q3, and hopefully, many of you understand since you're mostly invested in this company, it's a scarce resource. It's scarce real estate, and it's getting more scarce with the supply-demand dynamics, and that's the position we're in. Now on the previous slide, I was highlighting the top 10 operators and making that point. But the reality is we're in a very, very highly fragmented industry. And the stat in the top left and the green there kind of highlights that. As best as can be measured as reported by ASHA and other trade associations, there are roughly 2,500 operators and 90% of them operate 5 or fewer communities. So it's a very highly fragmented industry with many different experiences, a lot of noise, a lot of white space. However, for us, that means that's opportunity where we can really leverage our scale with our resources, or the depth of our resources. In fact, the storm of this last week kind of highlighted how well a company our size can handle something like that as opposed to a small operator where they had to evacuate residents. They had to do other things. None of that was true for us because of the strength and the core of what we have. The other thing that this fragmentation allows is we can really lean in to differentiate ourselves. And what we choose to differentiate ourselves is around the care and the service we provide. And you can see some of the statistics across the bottom of the slide. But for us, first and foremost, we're an operating company. We provide amazing service. We provide amazing care, and that's how we win in the market. And by winning, we do receive various accolades. You'll probably recognize the branding of the U.S. News & World Report. For 4 years running now consecutively, we've had the most number of awards provided or bestowed from a U.S. News & World Report. You can see some of the other awards, both industry awards, Argentum being our biggest trade association and other awards, highlighting the great things that we do at Brookdale. Now I know many of you had the chance to do the tour, the community visit yesterday. I'll put a plug-in for those of you that were unable to and your travels allow it, I would highly recommend you try and do it this afternoon. We do have another offering. We'll talk about it a bit more of the logistics after the live stream is complete. But nonetheless, I think it would be helpful even for those that saw Brookdale come to life at our Brookdale Green Hills Cumberland community. We do have a short 2.5-minute video to kind of make the point again for those that didn't do the tour or just really synthesize it. [Presentation]

Excellent. Questions come up. Green Hills, the community visit that many of you did yesterday, and hopefully, the rest of you will be able to do this afternoon, built in 2009. So it's a 17-year-old building. And I think for those of you that saw it, I think you'd be hard-pressed to guess it was a 17-year-old building if I didn't say that. So it just goes to shown we'll talk about it a little bit more. With a comprehensive CapEx remodeling that's holistic in nature, you can take old buildings and make them look just as amazing as a brand span a new building. So I did want to highlight that just because the question did come up over dinner. All right. Obviously, and hopefully, no surprise here, as we age, and I think we know we've seen our own parents, grandparents, you maybe saw it in different community tours you've done. There are some real realities that are associated with aging, some real physical demands that start becoming problematic. And the slide up here highlights just a handful of them, and you can see some of the statistics. Concurrently, dementia cognitive issues start expanding as we age. In fact, I was told by one of our gerontologists that the reality is everybody will get dementia if you live long enough. And it's just a reality of the human nature. And those are things that are real. The supportive activities of daily living, the bathing, the grooming, the transferring, the ability to feed, it only gets even a little more complicated in a dementia memory care type setting. Those are things that senior living can solve for. At the same time, the other statistic, which is a little less known, but still very real here in the U.S., there are going to be fewer caregivers very rapidly here that can support the elderly. It just has to do with the imbalance of baby boomers versus Gen X, just a lot more baby boomers than there are folks in my generation. In fact, probably the most meaningful statistic is the one second from the bottom, the number of adult caregivers aged 45 to 64, so call it Gen X that are able to care for their 80-plus-year-old parent. Historically has been a 7:1 ratio for many generations. It's going to be 4:1 in 2030 and 3:1 by 2050. So a very rapid decline in those ratios. And the last part, and again, this is not often talked about outside of senior living. There's a real risk associated with isolation. And as we age, our ability to travel decreases very rapidly, whether it's walking, for sure, public transportation, driving. Oh, by the way, the friends that you had used to have, they have the same problem. And if you stay in the house, there's real physical frailty associated with loneliness. And you can see some of the statistics and for sure, a dementia component to loneliness. And I will contend that senior living solves for all 3 of those. It solves for the naturally growing acuity, whether it's a physical acuity or a mental acuity. It solves for the lack of caregivers, and it solves for the isolation by providing a community where activities and bonding and isolation can be reduced. Now I've been -- we've been using the word senior housing, senior living pretty broadly here. But I want to -- I would like to just take a moment and break it out into various segments because it is quite meaningful in understanding Brookdale and understanding the industry. the first one I'll highlight is the first or the active adult. Active adult is fundamentally age-restricted multifamily housing. So it's apartments and condos, just like apartments and condos that you may live in, but there's an age restriction. The amenities are pretty much like any apartment or condo. There might be a small fitness center, maybe a pool, a little community area, potentially a happy hour once a week, that type of thing. So truly, it's multifamily housing. So in fact, in some circles, we don't even consider it senior living per se. But nonetheless, it is there. And the reason I wanted to highlight it, take a look at the occupancy versus the average age and move-in for active adult. So average age I move in for active adult is 72 to 74, which if you do the math, that means baby boomers turned 72 back in 2018. So the very front edge of baby boomers, those born in 1946, turned 72 in 2018, 8 years ago, and you'll note that Active Adult has the highest occupancy of all the other segments because Active Adult was the first to be exposed to the baby boomer expansion of that generation. As you jump down to independent living, still a lifestyle choice. It's a choice to reduce the hassles of life. So you'll get 1, maybe 2 meals a day, all your housekeeping, your maintenance, some transportation, some activities, all those are taken away from you. And oh, by the way, you have a community of friends that you can live and age with. And that's independent living, but again, very clearly a lifestyle choice. You can choose to stay in your single-family home, you can choose to stay in an apartment, you choose to remove those burdens of real estate that comes with it. Again, I'll point out, average age at move-in, 82. And you'll also note the occupancy is the highest of the segments below. Again, that segment of senior living was exposed to the baby boomer wave a couple of years earlier than active -- or sorry, Assisted Living, which is really the core of what Brookdale does. So Assisted Living, average age of move-in is 84. Again, that's a NIC average. Occupancy 85.8%, a NIC average. It's the lowest of all the segments or near the bottom of the segments. But the real point is it is need based. And that's the first time where you truly enter this idea that you come to assisted living because you need to come to assisted living. Quite often, it's an event-driven thing that gets you there. It's a fall. It's a hospitalization that is recoverable, but what put you in the hospital is chronic in nature, so it's only going to get worse. Quite often, it's a spouse who's caregiving for another spouse and that spouse gets injured is unable to care for the family. So now you have 2 folks that are unable to care for each other. And those are all reasons to come into assisted living. It is not discretionary in nature. It is quite urgent. You can't defer it quite often. It's not a, hey, we'll do this in a year, we'll do it in 2 years. There's a specific need right now. And as you'll note on the prices, the alternatives are not very good from a cost perspective for sure. So you'll note the assisted living average cost, again, this is a NIC number, $6,500 per month. Juxtapose that to the bar graph across the bottom. nursing home, which is true health care, is $10,600. And unfortunately, sometimes that is the right care setting if you have a true health care need. But juxtapose that to home health aid. Now this is a 24-hour a day, 7-day a week number. But even if you do 8 hours, 12 hours a day, whatever ratio you want to put there, you'll see very rapidly it gets very expensive to pay someone $35 an hour, $40 an hour to provide the support, care and services that naturally come within assisted living. Oh, by the way, that $24,800 number does not include housing cost, does not include food cost. does not include transportation, activities, all the other things that come within the umbrella of that $6,500 assisted living cost. So hopefully making the point that the alternative to stay in your home, suffer through isolation and loneliness potentially, be by yourself, having a caregiver show up for 8 hours a day. Not only is there a quality of life issue, there's a real cost issue that is part of that. Stepping on down, you see memory care, really an expansion of assisted living. Memory care starts bringing in additional programming, additional cognitive support, additional physical support, unfortunately, as dementia evolves, it starts manifesting very physically pretty quickly and obviously, a higher price point as a result of the additional labor that is needed to support that segment. Skilled Nursing, very small part of what Brookdale does, but we do have it. It truly is post-acute care. I mean it's a health care setting regulated by health care type entities, again, a small part of our business. Then CCRCs is really a spectrum of everything, and it comes in many different flavors. But in effect, this is people who acknowledge that they're getting older, acknowledge that the best days of physically are behind them probably, and they want to age in place. So quite often, they'll enter CCRCs in independent living, knowing full well when the need arises, whether it's you or your spouse, you have the opportunity to stay in place and you have many options to do that, and that's a CCRC, and that's why the price points are so wide because of the different segments. Now taking a little bit of a retrospective look to Brookdale and things that predate me for sure. The company has evolved through multiple -- we'll call them eras. So I'll use that term. In the first era, the first generation was 2000 to 2020. And you can see the title that we called it was growth through acquisition. That was definitely the case. You can see some of the logos across the bottom. In fact, there are a couple that are missing some notable ones, Horizon Bay. I think there's probably several other, but a lot of acquisitions occurred during that time period. As a result, the company became the largest senior living operator. Almost not overnight, but through that time period. Now unfortunately, it also brought many different companies, all with different cultures, all with different styles of doing senior living, all with different community types, community ownership types altogether. So it's everything from 18-unit communities to 500-plus communities to things that were very concentrated in one city or one part of the country to things that were spread throughout the country. It also brought with it some leases that were very onerous and very burdensome from a financial perspective, where the lease structure really benefited the lessor and the value of that real estate was really extracted by the owner of the real estate as opposed to us as the operator of that real estate. Now even through that, so going back to 2020, I mean, the company acknowledged that this was problematic and started slowly culling and rationalizing the portfolio, started modifying kind of who Brookdale was. And unfortunately, we hit 2020 and the shock of COVID the shock to the industry and the shock to our country. And for sure, Brookdale was not exempt from that shock. Occupancy dropped precipitously. I'll use that word, to under 70% during the pandemic. And if that wasn't enough to pour some more salt into the wound, there was a lot of inflationary pressure, especially around labor, around staffing agencies. I know many of you understand that world, just the cost just ramped up. So at that point, there was a real liquidity issue, a real leverage debt issue that occurred. And as the company started taking some very active, proactive steps to preserve liquidity and continue the company to survive as it has and as it is today, which brings us to the next era, 2022, 2026. And the first bullet is probably the most impactful to the changes that were made in the most recent years, and it's around exiting outright or renegotiating those leases, those onerous, burdensome, disadvantageous leases that the company had been burned with for many years. Part of that was also selling some of our real estate, what we call noncore real estate, and we're still in the process of doing that, mostly complete and will be complete in 2026, which brings us to that 517 number, again, which you've seen a couple of times now, where we finally tune and hone what our go-forward portfolio will be around 517 communities that we're targeting to achieve by midyear 2026, which then brings us to the future state era. And that's really what this conversation today is about. So we'll be talking for more or less the next hour or 2 hours around where we will be going around RevPAR improvement, around continued occupancy growth, around margin expansion and accelerating the operating performance that we've experienced as a company. Now this next slide shows a little bit of a more graphical objective depiction of those areas. And it shows on the left side, the number of communities we had through the last 10-plus years. On the right side, the number of units we had over the last 10-plus years. And it's also color coded by the ownership type. And the first thing I want to point out is the managed, those green bars. You'll note, as the years have progressed, we have slimmed down very deliberately, very strategically the number of managed agreements we have. Again, I hinted earlier, management agreements, they're good because we have the scale, but you really cannot extract the value of the work that goes into the management agreement because all you get is a cut of revenue. As NOI grows, as the value of that real estate grows, you don't get to benefit with that value. The owner of the real estate who's paying you to manage it on their behalf gets to value it. So where we are in 2025, just a small sliver, but it does still show up in our numbers, and it is still a small part of our business. The next bars, the light blue bars, the lease portfolio. Obviously, you can see that's also shrunk, and it's the rationalization that I mentioned earlier. So it's exiting leases we probably never wanted to be in. And for those that we wanted to continue renegotiating those leases with terms that are more aligned with value creation between the real estate owner and us as the lessee. And what do I mean by that? Negotiating sub-3% weighted average rent escalators, annual rent escalators that we feel we can more than cover with rate increases that we can cover. Again, that was not the case in our old structure. Today, it's well-defined rent escalators. Second, it's meaningful CapEx funding that comes from the lessors. So we can be aligned. So if we're going to invest in a community even in a triple net lease mindset, and we're going to put CapEx into that building that adds value to that building, the owner of that building also contributes their own CapEx, their own funding into the same building. So we're aligned to win together with that real estate. And several of our agreements, lease agreements actually give us a purchase option, which we really like, and we've actually executed in the past, and we look forward to maybe contemplating doing that more so in the future. The real point of this slide, though, are those dark blue bars. You'll note our owned real estate despite the ups and downs of the industry, despite the ups and downs of -- Brookdale has remained fairly constant. We are in a period of doing a little more rationalization, really getting out of some noncore type assets and pinning down those 517 owned and leased consolidated communities that we will continue to own/operate. Next part of the story, and unfortunately you can't talk senior living without talking about COVID and the recovery since COVID is our overall occupancy, and that's what's shown with the bars, the RevPAR, what is shown in the line graph. And you can see we had the big trough of COVID occurred in Q1 of 2021, and it's sort of been a recovery, we'll call it the inflection point since then. I already highlighted where we ended the year last year with plenty of runway ahead of us to get to that 100%. Again, I'll highlight, we have several dozen -- dozens of communities that are already at that 100% looking to get there. But the real point I'll make is we have some clear milestones, some benchmarks that we've identified internally that we want to start hitting and start measuring ourselves against. The very first one is to get our occupancy to where it was just prior to COVID. So as you look at those bars, I think it's -- yes, it's Q4 2019, just prior to March 13. That's when COVID started for me anyway. I don't know about you guys. Just prior to March of 2020, we were at 84.5%, if I can see that right, 84.5% occupancy. So that's milestone #1. And we are sprinting and we'll achieve that in 2026. And trip over finally to say we are above the COVID occupancy on a quarterly basis. The next big milestone, it's not shown on the graph here because it was in 2013 was the all-time record high occupancy that Brookdale had ever achieved. It was 89%. It was before the Emeritus acquisition, and it was before the huge building boom that occurred around 2016, '17, '18 in the senior living industry that tanked occupancy across the entire industry. That was 89%. So that's the next milestone that we are sprinting towards. The next one after that is to get our numbers up to the NIC averages. Typically, NIC outpaces us, many reasons. Part of it has to do with our mix. We're far less IL. NIC industry is far more IL, about 50%. IL is exposed to baby boomers earlier. I've already kind of shared that story. There's also a geography mix, but we do want to get to the NIC numbers. And the final metric is 100%. I mean, truly. Now it's a bit aspirational because there you can never be perfectly at 100. Obviously, if someone moves out, it does take a couple of days before the next person moves in. But we have communities that have gotten there. We have communities that have stayed there for the last couple of years. They'll dip by 1 unit for 2 days. Next moving comes in the very next day, and they're back to 100%. And that's where we want to be as a company over the next several years. Switching gears. EBITDA, obviously, massive growth as occupancy has grown. Our EBITDA has grown. I already mentioned the $458 million number a couple of times now. No surprise there. On the right side of the graph, it's our leverage ratio, debt-to-EBITDA, obviously, massive improvement. 2025, finally below that 9.0, far below the 9.0 at 8.9. And we'll be talking about our leverage ratios a lot more and what we project for 2026 and on out into the future years. Which brings me to kind of a global view of our 2025 results. Again, we pre-released a lot of our preliminary results. We'll obviously go into the details during our Q4 earnings call in a couple of weeks here. First things first, I'll keep harping on the $458 million. I said it once, I'll say it twice. We beat our midpoint, which was an upgraded midpoint from the Q3 call or the Q3 earnings call, 19% increase year-over-year to 2024. It was built upon occupancy gain, 230 basis points. So very excited by that, which, by the way, if you look at the total year of 2025, we finally had the highest occupancy from a total year perspective than we've had since COVID. So finally, when you look at annualized numbers, we're beyond the COVID years. The last thing I want to point out is right in the middle, both our owned and leased portfolio is finally, after many, many years, generating positive cash flow as separate segments of our business. And that is because of our new leases, the new structure, exiting leases we didn't want to be in and then renegotiating the ones we do want to be in as a go-forward plan. As you take a look at 2026, again, this was part of our pre-release, but we'll talk about it and really Dawn will talk about in quite a bit of detail. RevPAR growth, we're calling for 2026 guide 8.0% to 9.0% growth. Adjusted EBITDA in the range of $502 million to $516 million. As you take a look at those big broad arrows below that, this is our multiyear kind of projection. And it's a mid-teen annualized growth for our ongoing portfolio. So those 517 communities as we go through the years, which will bring our leverage -- our net leverage to less than 6 turns of EBITDA by the end of 2028. So the real question is, well, how do we get there? How do we build a strategy? How do we build a process to achieve these multiyear projections? And there are really 3 key levers, really broad levers in each of the Mary Sue and Dawn will kind of distill some of the more specifics. But the first one is just the undeniable -- I'll use the word undeniable realities of the supply and demand dynamics that are within the industry today. The second is this idea of winning at the market level. And quite often in the senior living space, for sure at Brookdale, but even at Sunrise, where I was previously in other senior living operators, quite often, you start celebrating and focusing on individual community results, which for sure, you want to do. So you get excited when a community hits 90%, 95%, 100%. But then sometimes you forget the community on the other side of the street or the other side of town that is languishing at 70%, 75%, 80%. We're going to pivot that and we would rather win the entire market, have all the communities, the overall market occupancy grow. And the real reason kind of we're pivoting that thinking is we're approaching this from the perspective of a customer. A customer is seeking senior living for their loved one, for their mother, their father here in Nashville. We want to provide all the options in the Nashville market, and we want to win that customer within a Brookdale community, whether it's Green Hills Cumberland that many of you visited, whether it's Belle Meade, whether it's Franklin, whether it's one of any one of the many communities we have, we're pivoting to win that customer within Brookdale and not a specific community, which again is quite often what happens naturally because of the structure of the industry. The last point I'll make, we've got to win operationally. I've said a couple of times now, we are an operating company, first and foremost. We're built upon a foundation of real estate, and that is becoming a scarce asset. But first and foremost, we have to win operationally. And I do want to just take a pause here because within Brookdale Parlance and even at senior living, quite often, you'll divvy up functions, you'll say, this is ops, you have sales, you have clinical, you have marketing, you have culinary dining and ops is just one of the verticals. But when we say we want to win operationally, really, what we're saying is we want to win within the 4 walls of a community. So whether it's a dining, a sales, marketing, asset management, facilities maintenance, whatever the case may be, we want to win what happens within those 4 walls and excel within those 4 walls. All right. the industry has been talking about this baby boomer demographic for years now because it's real, right? I mean it's -- we know how many people were born in 1945 versus 1946. Those numbers are undeniable. But I will tell you, it's a little premature, the excitement, and it showed up in the big boom of oversupply that occurred in 2017, '18. But nonetheless, it is now here and is on our shores. What you'll note in the colored bars, and again, it's a little tight, but what you have, the blue bars are is the silent generation and obviously, the big massive orange bars are the baby boomers. But if you compare the number of Americans who were born in 1945 versus 1 year later, 1946, it's 600,000 more Americans were born over that 1 year incrementally. So about 20% more Americans are turning 80 this year and turned 80 last year. And that's a very important line in that sand that 80-year age, and I'll make that point even more so on the next slide. As you look at the baby boomers, I mean, 1946, great year, but take a look at 1947 and 1955 and like it just keeps growing and growing and growing the number of Americans that were born, and it really peaks out in the late '50s, early '60s. So really, for the next 10, call it, 15 years, there are going to be more and more folks who are turning 80 years old that were born well, 80 years ago. So then you take a look at the graph to the right, which shows the cumulative number of Americans who are aged 80-plus. Again, I keep benchmarking or kind of pinning myself to this 80-plus number. That's a very important milestone in the senior living space and the customers who come seeking senior living. But what you'll see, and again, all we have is a few data points on the earlier years. From 2023 to 2024 to 2025, it only grew around 500,000, 400,000, 500,000 more Americans who were 80 years old. But take a look at 2026 to 2027 to 2028, it's 1 million on average, more Americans entering the 80-plus pool of our population. In fact, if you do a CAGR, it's 4%. So keep that number in mind because we'll compare that to some other things in a second year. So 4% CAGR on the 80-plus population, and it really doesn't subside until about 2040. So we have another 15 years of this growth, at which point it starts peaking out and then the Gen X generation comes in, my generation. So this next slide, this is actual Brookdale data. This shows the average age at move-in, the distribution for 2025 for Brookdale. The green bar is the average, which is 83.1. But what you'll take a close look, 82 years old. So just one bar to the left is right at the same bar is 83. Take a look, one bar to the left of that, 81, then 80, then look across. So really, again, I keep pinning down this 80-year-old number. 80 years old is when kind of the sweet spot when you start entering the senior living environment where it's appropriate, the needs-based things start coming in line. It's the right decision for yourself and the family members. And really between 80 and 90 is, again, that sweet spot, that peak of this distribution curve here. In fact, for Brookdale specifically, 80 to 90 represents 51% of our total move-ins. And you can see there's a tail more on the earlier side of it than the late side of it. So really, what this slide is showing is 80-year-olds, the number of 80-year-olds, folks turning 80 this year is growing. The sweet spot when you come into senior living is right at 80. So for the next 10 years, we're going to be seeing those folks come through right when the peak of demand comes in for our offering. Now switching gears on you guys, taking a look at supply-demand demographs. Again, I don't want to beat this. I think it's pretty well documented. But the first thing I want to highlight on the far left is the inventory growth. So the actual number of units as reported by NIC that are available. You'll see that spike back in 2017, '18 that I alluded to earlier, a lot of supply, especially in San Antonio, especially in Atlanta, which unfortunately we're in, which put some pressure in those specific markets. But what you'll note the last few years, it is at truly record lows. In fact, if you did the math, it's 0.6%, I think, 2 quarters in a row now of growth -- annualized growth in inventory count, for sure, below 1% for a couple of years now. So I'll juxtapose that. So 0.6% growth of inventory, 4% growth in folks who are 80-plus who seek senior living. So obviously, you guys can see the juxtaposition there, the pretty striking juxtaposition very clearly. In fact, take a look at even the peak in 2017, '18, the inventory growth peaked out at just under 4%. So even when we were cranking as a nation and building inventory, we just barely covered the growth that's expected in 80-plus year olds, which is going to be 4%. And again, that's demographics, that's real. Taking a look at the starts to the right of that and then the units under construction. The reason I wanted to highlight these slides, even if tonight all of a sudden, cost of materials went down, cost of labor went down, licensing and entitlement and zoning for senior living became super easy. Regulatory and survey things all became super easy. The reality is it takes 3 to 5 to 6 years before when you start a project before resident #1 can move in. So starts -- so those low record starts, those starts that are occurring right now will not be counted as inventory for another 5 years. A resident will not be able to move into that start for another 5 years. And again, that's where we are. So kind of merge all this data together, the demand side, the supply side, and we -- this is a NIC generated data set here. Projecting out to 2035 unit supply, again, for the next 3, 4, 5, 6 years, I feel very confident that, that will be roughly where it is. Demand demographically undeniable. And what you'll note in 2026, you start getting the divergence, again, 2026, first baby boomers turning 80, whereby there will be a shortage of supply based on the projected demand of 80-year-olds plus seeking and needing -- not just seeking needing senior living. It's expected by 2027, so next year, there'll be 100,000 unit shortage across the country. By 2035, it will be 400,000 unit shortage. Obviously, at some point, supply ought to catch up in this free market environment. But again, I'll keep making the point with the starts we have today, with the inventory we have today, oh, by the way, the -- all those realities of cost of labor, cost of materials are just as real today as they were a month ago or a quarter ago. This graph, I think, is a pretty good confident perspective of how things will look. Which then brings us to what it does it look like within the Brookdale ecosystem. Some rules of thumb, and they're indicated on the left there. For every 100 basis points of occupancy gain, so 1 percentage point, it yields $23 million in NOI to our company. Separately, for every 1 percentage point spread between RevPOR and exPOR, so call it net pricing, call it the spread between rate and expense growth for every point that we can generate a spread that's $27 million in additional NOI. So then as you take a look on the right side, the Dorito, the blue looking thing is a 0 spread. So if all we could do, all we can muster was to grow our occupancy by 1 point, 2 points, 3 points and have our rates perfectly match our expenses, i.e., our margins stay flat, you can see what the trajectory would look like. Next line up is if we have a 1-point spread, a 2-point spread, a 3-point spread. It actually isn't linear. If you notice, there's a slight bend because you start compounding that additional margin on top of higher occupancy. But the real point is it's really not linear because as your occupancy goes up, your pricing strength goes up. So you're able to jump from maybe the 0 line up to the 1 percentage spread point line. As your occupancy goes up further to 90%, you can jump to the 2% spread line as your occupancy grows to 95%. So it's more like how do you -- within your own occupancy range and the demand that's occurring within your own community, how can you jump from one line to the next to the next. Next strategy is around really kind of winning at the market level, and I alluded to that earlier. At the beginning of my presentation, I flashed up this -- the fact that we're in 41 states, which is exciting, 53% of seniors are within a 30-minute driving distance. But this slide actually shows our true density by community. The different colors represent the different care types. But what hopefully jumps out pretty quickly here, we have great density in specific markets. Some of them are listed by name on the right, and you can see them on the map there. I briefly talked about Seattle, Portland, San Francisco, L.A. County, Orange County, Riverside, Phoenix, Denver, Texas, we've got unlock, all the metro areas and a lot of the stuff in between. You can see Florida, I hinted that we have great coverage up and down the peninsula of Florida. But the real point is we have great critical mass in very populous, very desirable locations for seniors. And we can leverage that critical mass. First, we can leverage it from the customer's perspective, and I already kind of alluded to that. We want to provide optionality to someone who is seeking senior living in Dallas or in Miami or in Houston or wherever they might be that we are, we want to give them options. We want to give them options on price point. We want to give them options on the care type they want. Sometimes they really want a single story, sometimes they love multistory. And as best as we can, we want to meet all those needs. Another part is they want to be in this part of the city as opposed to this part of the city, and we want to be kind of the best choice for them. So that's this first idea of we want to win in a market because we want to cover all those needs as best as we can. Secondly, and hopefully, no big surprise, there's some real leverage operationally by having things that are nice and tight. You get better leadership oversight, more touch points with leaders who are able to drive from community to community. I'll tell you the storm of this last week is a great example of that. We can very easily flex from one community that does not have power to another moving supplies, moving staff. We did not have to do that. But sometimes you move residents if a community has to be evacuated, we can move them to another nearby community. So those are all realities that really optimize who you are as a company, the care you provide, the service you provide, but even the efficiency that you're able to provide with that density. So we want to leverage and lean into that and win markets, use that as an advantage for us. Now some other things like what does that practically mean? First and foremost, it's about prioritizing markets. So we want to pick where we want to do this. And very fundamentally, we're -- the math is wherever we can get the most NOI the quickest with incremental support. So that's screen #1. And it's far more nuanced, obviously, than that, but that's fundamentally where we've already assessed markets where we feel there's an NOI unlock that could come the quickest in the most meaningful way with incremental resources. And I'll talk in a second what those incremental resources are. Now that does mean we have to deprioritize some markets, and that's okay. We have some markets that are winning on their own. They're sitting at 95%, 96%, 97% occupancy across a market, not an individual community, a cluster of 3, 4, 5, 6 communities are all there. We're going to let them go. Things are going fine. We're going to take our resources and shift them elsewhere. It also doesn't mean we might deprioritize markets that just the NOI expansion opportunity over time is not as great in this market, so we'll take resources and put them elsewhere because we can't have everybody be #1 priority. And the last step is truly about -- well, the next step is then about applying our local leadership. It's leaning in, being very clear about the expectation, the accountability. I'll tell you one of the biggest levers in this approach. In fact, it's a campaign approach, i.e., all functions, all levels, campaign approach that we will win, I'll make this up in the Nashville market. Part of it -- part of the -- one of the key levers is ensuring that all the key 3, that's the term we use of our ops sales and clinical leader in every community is filled. There's nothing more destructive to occupancy than when you have high turnover in any one of those 3 positions. Fortunately, because of our scale, we have a large national traveling team. We have -- we call them operations specialists who executive directors, some of our best, who travel and they are put into locations where there's an opening or there's a need. Similarly, we have similar concept with sales and clinical. So when we do this campaign level approach, we ensure that all 3 of those key positions are filled in all communities in that market. So if we're going to blitz Nashville, every community is fully staffed from a leadership perspective. Then the last part is really leaning in with all our corporate resources. And this is the beauty of having a company like ours. We can deploy recruiting support if there's a staffing issue. We can deploy culinary support if there's a dining issue. We can deploy asset management support if there's a CapEx deployment type issue or whatever the case may be, we will lean in with all our corporate resources and pivot to say we're going to win the Nashville campaign today. Let me do a couple of case studies real quick just to bring this to life a little bit more. The first one I'll highlight is Kansas City, which I will tell you as the title of the slide shows is truly already successfully implemented a market-based strategy, but we're going to fine-tune it. And I want to talk through what that practically means. The first thing I want to introduce to you, and I've done this a little bit during one-on-one calls, is this idea of winning and filling our bingo card. So you guys know bingo, you've got 4 of the blocks filled. Maybe one of them is the free one, but you've got 4 of the blocks filled and you need that fifth one to be able to stand up yell bingo and win the game. We want to fill that bingo card. Even where we feel we are winning, we want to fully complete that bingo card and fill that void that might exist no matter what form it might take. So as you take a look at this map of Kansas City here, 7 communities, 6 of them are owned, one of them is leased. We felt so good about the market. In 2025, we actually purchased a couple of communities that were leased because we felt there was a lot of value in that market, and we can extract more value if we own something as opposed to lease it. We have the full continuum. You can see all the color coding. We have a great local team. And a lot of the success is because of this amazing local team, our District Director of Operations, Clinical Services and sales know the market. They know the Kansas City Metro very well. And as a result, we're at 88% occupancy across that market across all 900 units. But what maybe will jump out as you take a look at it in that dash line that's going north-south, that's the state line between Missouri on the East Kansas on the West. You'll notice a lot of our density and penetration is on the Kansas side of the border. And I will tell you, our local team who are all from there, have said, if you're born and raised in Missouri, in Kansas City, Missouri, unless a job takes across the border, you will never live in Missouri or in Kansas. Like that's a line in the sand. Even though you're all from Kansas City, it's a line in the sand truly. There's just a cultural thing going on. And as you'll know, we don't have great presence. So our bingo card, when we have a family member who comes to us and calls us, shows up in one of our communities and says, look, my mom really wants to -- needs to move into senior living. And we say, "Hey, we've got this great location in Overland Park. She will say, no, that's in Kansas. So we -- part of our bingo card is to make a very targeted acquisition, and this has to kind of tying into, I'm sure, a question that will come up, what are we going to do with excess free cash flow? What is our CapEx deployment plan? Now I've pinned this number 517, but we are looking for targeted acquisitions in markets where we already exist. We're not planting new flags in new markets. We're not expanding geographically. We are going to win in markets where we already are, and we're going to contemplate an acquisition in Kansas City, on the Missouri side, ideally a mix of IL, AL, memory care, maybe a little bit closer to the city itself, Kansas City, proper up to the north, where we can again fill that bingo card for that customer who comes to us and says, I need senior living, come help me. Switching to Dallas, another case study. As you guys can see, Pi, very quickly, we've got Dallas-Fort Worth unlock. I mean we've got in the city, up to Plano, Frisco, McKinney, where it's expanding to the North, Fort Worth, out to the West and Weatherford. I mean we've got unlock geographically. Oh, by the way, as you guys probably know, a lot of mileage. So it's -- I mean, this is a big geographic area. But what will maybe also jump out pretty quickly, it's a lot of green. It's a lot of assisted living memory care. We do have one major independent living, that blue one off to the east of Dallas. You'll note we have 2 circles that are sort of half shaded. That's a little bit of a stretch. They're mostly AL memory care, a small independent living presence, which is not the typical model. Oh, by the way, occupancy, less than -- below 80% in this market as compared to the NIC, so all our competitors, 89%. By the way, those numbers even include our numbers in that 89%. So if you looked at us or the number excluding us, is probably even higher or higher than 89%. So we have identified that there's a real need for independent living because independent living feeds very beautifully into assisted living and memory care. We don't have that funnel. Where we do, it's only one very small part of the city. So part of our CapEx strategy fill the bingo card is we need more IL, very targeted in the right location in the Dallas-Fort Worth market. The other very interesting thing actually, too, 23 communities, so you think we have great brand awareness because we're everywhere, but there's a lot of miles. I'll tell you, we -- our marketing team studies this very, very closely every year. We have very poor brand awareness. like people don't even know Brookdale. So when they're looking for senior living, Brookdale doesn't come to mind immediately as it does in most other cities that we're in. So there is a bingo card filling event around marketing spend to really get the Brookdale name out there and ensure that we are top of mind if and when someone is contemplating senior living. The last point I'll make, you'll notice there are some of the smaller circles. Those are unit sizes way up to the Northwest and to the West. Those are small buildings, called 20-unit, 30-unit, 40 unit. And typically, our smaller units are older communities, like that's just the history of all the acquisitions we made. So there's a very targeted CapEx deployment plan. And as I kind of hinted at earlier, for those of you that saw Green Hills, and I hope all of you have the opportunity to go do the tour, you can take a 25-year-old building, for sure, a 16-year-old building and make it look just like a brand-new building if you deploy capital in a comprehensive and holistic way as opposed to a piece meal, we'll fix this sofa. Next year, we'll fix this dining table. Next year, we'll fix the lighting, which unfortunately is a little bit of what Brookdale has done over the last few years. It's about leaning in with holistic, comprehensive CapEx packages to say we are going to win in Plano, Texas. And this community, even if it's a 20-year-old building, will feel and look like a 1-, 2-, 3-, 4-year-old building because we have the free cash flow to do that. All right. Bring me to the last couple of slides, the timer flashing 0. Someone said it's going to turn red in a moment here. Hopefully, the mic doesn't shut off. I will tell you, fundamentally, it should feel like a no-brainer, right, that if we're the largest operating company, we would be an operating company first and foremost. But I will tell you, when I was going through the interview process, the first thing I asked is, tell me more about the COO because I kind of knew there wasn't one of folks who were interviewing me. And it just blew my mind that this company has not had a Chief Operating Officer for an operating company that spans 41 states, 33,000 associates, 500-plus buildings. Like all of those things fundamentally are screaming that you have a COO. And we didn't have one for the last 10 years. So this is kind of step 1 in what we're doing. We now have a COO. You'll be hearing from Mary Sue in a moment here. Great depth of operational experience from Executive Director on up, had been a COO at Horizon Bay, one of the acquisitions, Executive Vice President of Brookdale, very well known in the industry, for sure, very well known at Brookdale with a lot of trust and engagement from the team, the true field operating team, trusting her as their leader and then setting up a structure below her. You'll see me coming in. I have an operating background, and I don't want to do a resume screen. But I do want to hit maybe a couple of the high points of a little bit of my experience and what I bring different to the table. Most recently, I was at Gentiva, privately held, the largest hospice company in the U.S. I was the President and COO, I did that for 3 years. Gentiva was the successor company of Kindred at Home, which was also privately held, where I was the COO on the home health line of business. In the middle, there was an acquisition and divestment by Humana, which I left. It was not part of where I was at Sunrise, which it was on that top 10 list, the sixth largest operator of senior living. I had the pleasure, the honor to be the COO of Sunrise during that interim period between Kindred at Home and Gentiva when I jumped back into the old team and the old management company. I was at TPG Capital for a couple of years, and that's how I got introduced to the elder side of the equation. I was on the portfolio operations team and got hired by one of our portfolio companies out of that role, but definitely understand the investment side, the value creation side of decision-making in the business context. was at HMS Host, which runs restaurants. In fact, many of you have been customers and maybe not even realize it. So HMS Host runs nearly all the restaurants in every airport in North America, about 80 airports, all Starbucks, that type of thing. I led operations, the entire company, about 1,600 restaurants. Before that, I was at Marriott in global operations, obviously, a big hospitality company. BCG briefly, and I do want to pause a bit on the BCG thing because the typical BCG experience is one where you jump projects every 6 weeks, 8 weeks, 3 months, like that's the normal consulting life. I was very fortunate in the 3 years I spent there, I was really on 3 large projects, each about 1 year. And one of them was a massive pricing project, a large strategic pricing project, and that really illuminated to me the power of pricing and how you can drive price and not -- and still drive the perception of value if you do it smartly. So that was one of the things. Then big projects on organizational design structure and also promotional effectiveness was my experience. And I started all in the military. So I was a fighter pilot in the Air Force, obviously, very ops focused, leading people as early as 22 years old. I had direct reports, and I was a leader in the Air Force. So you take all of that together, right? So obviously, operational background, a lot of leadership experience, but it's leadership experience in my mind, where it counts for senior living. It's health care, specifically the elder senior side of health care, home health and hospice. It is hospitality. I was at Marriott, where I understand what it truly means to please and excite people and surprise people with great experiences, granted on a 1.7 average day length of stay as opposed to a 2-year length of stay, but nonetheless. Restaurants, HMS Host, dining is an absolutely critical part of what we do. It is the one event, everybody shows up to. They may skip the physical fitness exercises. They may skip the bible study. Everybody will be at a meal 3 times a day. And that's a very important part of it, both from an experience perspective, but also from a cost control and value perspective and then Sunrise. So you take all those kind of from a Venn diagram, Sunrise obviously being right in the middle and senior living, I think, is right in the sweet spot. So super excited to be here. The other thing I want to say, and again, it's subtle. Some would argue even a little bit academic, but that third bullet there around our new operations or structure is real. We have, in effect, reinvented, reset how we are structured as a company. What it means for me to be the CEO, to have a COO, then to have a field organization, a complete reset that occurred on October 1 of last year, where we will take the leverage of who we are as a big national company, but deploy regionally and be much closer to the communities with teams that, in effect, are operating as their own separate companies. And I will tell you, the small regional companies, management companies have been successful. And it should be no surprise. It's almost conventional wisdom that you can be a better provider of service, the closer you are to the community as opposed to running things out of the Ivory tower that we're here in Nashville. Which, fortunately, my last slide here. This is what it looks like graphically, our regions. Mary Sue will spend a lot more time going through this in a second, but I just want to focus your eyes to that takeaway box across the bottom. Our operating model, in effect, creates 6 regional senior living companies, and that's how we view it. Our -- the Vice Presidents of Operations who lead that region have a dedicated team of ops, sales, clinical, dining, asset management, resident -- like all the things we do as a company, they have a dedicated 1-to-1-to-1-to-1 team of leaders that now own their business. So in effect, we are 6 companies of around 100 communities each, but we still have the national scale and the resources of a big core, the largest operator in the U.S. So with that, I want to thank you.

Thank you, Nick. I'm happy to have this opportunity today to speak with you about serving our customers and driving business performance. Operational excellence is achieved through culture of caring, people serving people. I have some interesting numbers for you. So last year, we prepared and served over 37 million meals, cleaned apartments approximately 7.2 million times. did approximately 122,000 resident assessments and drove and maintain a fleet of 1,150 vehicles. Now that's just the basic everyday work. Operational excellence is not just about what we do, but how we do it. Brookdale is committed to its foundation as an operating company. We enrich lives and drive value for all of our stakeholders, residents, families, associates and shareholders. Our 4 2026 operating priorities: number one, transform Brookdale's operating structure. Nick already talked about that; two, attract, engage, develop and retain the best associates; three, earn resident and family trust and satisfaction by providing valued, high-quality care and personalized services; and number four, operational excellence, resulting in increased revenue, disciplined expense management and accelerated EBITDA growth. So Nick just introduced to you our new operating structure. It is designed to focus on delivering operational excellence throughout our entire company from our communities to our national centers of excellence that are at our community support center. We have 6 strategic focused regions led by regional vice presidents with approximately 100 communities each, and they are leading the strategy, execution and accountability in their markets under one COO, who also manages the function of key operations departments. We feel that decision responsibility focused regionally, we are faster to respond to our communities, and we can improve performance-driven actions. This really fosters the customization of Brookdale corporate strategies and programs to the nuances of each of the market for optimized customer satisfaction and financial performance. Our Vice Presidents have vast experience operations with Brookdale, with many of them actually starting in the community as leaders. They know the business, and they've involved over an average of 23 years with Brookdale. On a national level, Brookdale centers of excellence provide expert leadership, best practices, research, training and key operational support that drives operational excellence. The alignment of these cross-functional leaderships at the regional and national levels allow us to leverage the scale of the nation's largest operator and execute with the nimbleness of a regional provider, just as Nick talked about earlier. Streamlined communications of our clear strategic initiatives and expectations improves responsiveness and accountability at all levels of the organization, especially for our executive directors and their community teams. Approximately 33,000 associates are our #1 asset in providing operational excellence in our communities. These are people serving people with passion, courage, partnership and trust. This relies on the strategy of attracting, engaging, developing and retaining the best associates whose skills and relationships deliver the best resident experience. Attracting the best associates is more than just posting jobs and standard recruiting, and I wanted to tell you a little bit about a few of Brookdale's people strategies. Brookdale proactively plans for workforce leadership needs. So we love promoting from within, but we also source talent externally when needed. One of our examples is our Hire Ahead program for community leaders, where we get to train them in advance of an opening. Brookdale sources diversified talent pools, not just health care and hospitality. One example is our pilot program with Skillbridge at the Department of Defense. Another addition to our regional structure, which we're very excited about, is a dedicated talent acquisition role on each of our regional leadership teams. And our Good People program is our employee referral program that rewards associates who refer new recruits to come work with them at Brookdale. Engage. Our new restructured ops framework has already improved communication and interaction among various levels of Brookdale. At the frontline community level, we utilize engagement activities through training, recognition such as our kudos, and Hero and Excellence Awards and also Optimum Life opportunities. We continuously strive to improve the retention of our key 3 community leaders as they impact our overall retention of associates. These are executive directors, sales and leaders and health and wellness directors. We have achieved a 390 basis point retention improvement over the last 2 years. Development plays a major role in this. We start development on day 1 with our K3 onboarding program. This incorporates more just-in-time modules to make learning on the job more impactful and sustainable over the first year and includes multimodal learning methods, including in-person training for our executive directors with Center of Excellence leaders at our Nashville headquarters. Management fundamentals are developed through 101 management courses and other programs like coaching team members and how to handle difficult conversations. Retaining our associates. We know that lower associate turnover creates greater trust and confidence, improving resident and family experience, especially in our key 3 community roles as they really create the culture, environment and uphold the quality standards. Our size and scale benefit our associates with our ability to offer many career pathways for growth and development. And here are some examples on the slide. Offering an array of benefits, including affordable and accessible health and wellness solutions retains associates. A special benefit is our advanced fees benefit, which pays costs upfront for those seeking to become certified nursing assistants or med techs, and there's a program for those working toward U.S. citizenship. Brookdale is super proud to have been recognized in 2025 with several people awards, Newsweek's America's Greatest Workplaces for Diversity, Newsweek's America's Greatest Workplaces for Women, the PRISM Award for Social Stewardship and Best Pet Workplaces. Roughly 49,000 residents and their families put their trust in Brookdale, and Brookdale has developed and offers signature services based on years of research, customer feedback and data collection with a continuous focus on operational excellence. I will highlight for you 2 of those today, and these are registered trademark programs that are specifically unique to Brookdale and for which we are very proud to be able to provide our Optimum Life program and Clare Bridge, our memory care program. Optimum Life is how we define the Brookdale brand. It serves as the foundation of how we help residents, family members and associates live their best possible lives. We are enhancing our Optimum Life experiences in all of these functional areas and now engaging our associates at a deeper level to help residents live their optimum life at Brookdale and their own. We are kicking off 2026 with a focus on Optimum Life at Brookdale. I wanted to show you what we're doing. [Presentation]

You could see how Optimum Life philosophy is a point of difference for us at Brookdale. We use customer feedback to guide operational decisions and innovations to ensure that our business remains responsive to market needs and align with the strategic goal of long-term customer satisfaction. Over 60,000 survey responses since August 2022 from resident and family surveys informs us of satisfaction drivers for the residents and family members. As you can see on the slide, value for money spent, issues resolved timely, staff and management cares and quality of service are key to satisfaction. Through our focused efforts of feedback and actions, our NPS significantly increased by 19 over the past 3 years. Operational excellence is exhibited in our exclusive Clare Bridge brand of memory care. Brookdale is the largest Alzheimer's and dementia care senior living provider in the U.S., having the ability to serve over 9,300 residents. Brookdale has a dedicated dementia care team, including 2 gerontologists, one dedicated solely to Alzheimer's and dementia care. Let me give you a glimpse behind the door and introduce you to Clare Bridge and what we mean to families, residents and staff. [Presentation]

So Nick mentioned this earlier, food is the one service that almost all of our residents experience every single day. We serve over 100,000 meals daily. So we understand that food matters in driving satisfaction. So we utilize continuous feedback systems to enhance the dining experience. This is an example of services where national expertise is executed within a market approach and local culinary creativity to be able to come to life. Brookdale has the most communities recognized by the U.S. News & World Report with outstanding performance in several key areas with a high-performing accolade. These accolades new for 2025 are awarded to communities that are scored in the top 25% of evaluated communities nationwide for these reasons: caregiving, activities and enrichment, management and staff, food and feels like home. In addition, we're extremely proud that we outperformed the industry in every food score for 2024 to 2025. Brookdale's clinical expertise distinguishes our communities competitively by offering a higher level of personalized coordinated care provided by our integrated care teams and on-site clinical support and care coordination. Developed over years of service, our specialized clinical programs provide evidence-based protocols and resources for managing chronic conditions such as diabetes, Parkinson's disease and others. Local expertise supported by national expertise allows real-time monitoring backed by expert resources. Brookdale HealthPlus is another trademark program unique to us. It is a care model centered around improving clinical outcomes and reducing preventable hospitalizations and ER visits through care coordination and chronic condition management. HealthPlus impacts all residents within a HealthPlus community by incorporating the additional support of an RN care manager who works to coordinate care and help residents and families navigate a very complex health care system. In addition, HealthPlus includes evidence-based protocols to ensure early detection of changes in conditions. These key pieces, along with strong value-based provider partnerships help to ensure we are keeping our residents healthier for longer, and it's working. Last year's results from an independent study found fewer urgent care visits. fewer hospitalizations and higher annual wellness visit completion rates when compared to similar individuals living in other settings. It's a win for our residents, and it's a win for us. They stay healthy longer and they live with us longer. Since 2019, we've been expanding our HealthPlus footprint. As of November of 2025, we have launched to over 180 communities across 9 states. In addition to continued HealthPlus expansion, our health care strategy remains focused on strong strategic alignments across the entire Brookdale portfolio. Throughout 2025, we added 3 additional value-based contracts. By working closer with providers focused on quality outcomes, these contracts enable us to have even stronger clinical partnerships. That enhances our collaboration on key health care outcomes such as hospitalizations and readmissions while allowing Brookdale to be rewarded for the strong clinical value that we provide to our residents, families and partners. The fourth and overarching strategic priority is operational excellence, resulting in increased revenue, disciplined expense management and accelerated adjusted EBITDA growth. You've heard how Brookdale's differentiated resident and associate products and services are a compelling value to win locally. Now I will share some business practices that are aimed at driving revenue through occupancy and rate, coupled with disciplined expense management. Brookdale has a robust and sophisticated sales and marketing platform. As the largest operator, we have high brand awareness and lead volume. Investments in this area keep us top of mind in a highly competitive market and industry. We pull this through fully integrated marketing plans to maximize the reach and frequency of our message. Internal marketing team leverages data, decision driven leverages -- data-driven decision-making and marketing tactics and sales success. Marketing technology enables us to build meaningful customer connections. Deep customer insights help us match customers to the best Brookdale community and care services just for them. These approaches enhance both Brookdale's win in our large markets and in our smaller local markets. Our national connection center serves to support our communities to speed to lead response times and is a source of data that drives our innovation and creativity and customer engagement and decision-making. Sophisticated remarketing builds strong pipeline to reattract and improve engagement for optimizing ultimate sales conversion. Given our scale, we have the data insights and resources to optimize our sales results. Brookdale's dedicated regional sales leaders have an average of 22.5 years industry experience, supported by a national leadership team of over 2 decades of experience. Brookdale has a sales team of seasoned professionals that are highly knowledgeable and skilled. As in marketing, we leverage a wealth of customer insights to deliver the best possible personalized experience for our prospects and their families, which results in more move-ins. Brookdale has a centralized sales onboarding training in addition to ongoing sales enablement programs. These are led by designated sales trainers, providing national expertise to markets and local communities. A phase of our operational redesign is to centralize several functions to collectively analyze and deploy resources and investments to best drive revenue, manage expenses and drive long-term profitability. Let's look at pricing analysis and go-to-market strategies. Utilizing predictive analytic tools and valuable exclusive data gleaned from our extensive customer and business partner relationships allows us to anticipate challenges and opportunities. Strategic and targeted CapEx deployment. Nick talked a lot about this in terms of where we're putting resources in our market. This is important as we align operational resources and strategically meet our goals. We will discuss this more in a minute. Workforce management and planning. This ongoing process ensures that the operations remains flexible and adapt to evolving business strategies, occupancy growth and external market pressures, which is crucial for maintaining competitive advantage. This means consistently evaluating and refining business processes to boost efficiency effectively manage costs and align with the overarching goals of quality and customer satisfaction. In our 2025 earnings calls, we have discussed our SWAT team approach to improve performance across lower occupancy bands. We call this HORT, our high opportunity resource teams. So our SWAT teams are cross-functional and link national and regional leadership to improve operational performance by resolving any operational roadblocks and deploying capital in a way that directly ties to occupancy and EBITDA growth. The teams are also taking a very targeted approach regarding rate to ensure our RevPOR outpaces our expense growth in these communities. The synergistic approach has been very successful with 480 basis points occupancy outperformance for HORT groups relative to same-store results. Currently, over 130 communities comprised of roughly 15,000 units are part of our HORT focus group. The teams transform challenged Brookdale communities. And through a cross-functional structured process that includes leadership assessment, targeted pricing, strategic CapEx deployment, along with the establishment of clear expectations and accountability. Here are 2 examples of smaller CapEx remodeling of some resident-centric engagement spaces. These refresh projects improve the first impressions of Brookdale for our prospective customers. Ensuring operational activities are constantly aligned with strategic objectives requires monitoring of performance metrics, forecasting trends and optimizing processes in real time. We employ Brookdale developed dashboards and red flag reports to provide visibility at all levels of management. Daily real-time performance is available to executive directors, prompting actions for operational excellence and financial performance. This is an example of our Community Executive Director overview dashboard. So our mantra is, know your business, set your plan and lead your teams. Operational excellence is foundation of enriching lives through people serving people with signature programs and optimum life philosophy, delighting our customers while driving value for our residents, associates and shareholders. Thank you. [Break]

Thank you very much, and it's great to be here with you this morning. I've been in the seniors housing industry for almost 19 years, and there hasn't been a more exciting time for our industry than right now. The macroeconomic backdrop of the industry is very real. And as the largest operator and third largest owner of senior housing real estate, Brookdale has positioned itself to continued acceleration of growth and shareholder value. We have exceptional communities that are resident-centric. We differentiate ourselves with our commitment to high-quality care and service and through our clinical offerings and expertise. Our focus on operational excellence and the new streamlined operating structure that you heard both from Mary Sue and from Nick will continue to have an important role in our strategy as we focus on accelerating growth in our business and generating long-term shareholder value. You've heard this morning from both Nick and Mary Sue, where Brookdale is focusing to harness the macroeconomic tailwinds driving the senior housing industry forward. Everything we're discussing today about the industry and about Brookdale should help provide you the same confidence and conviction that I have in our financial outlook. I'm going to walk you through that today in just a few minutes. Today, I plan to cover 4 topics. First, I'll highlight our strong 2025 preliminary results. Second, I'll review our annual guidance for 2026 and the inflection point that we are at as a company. Importantly, we have a significant opportunity in front of us for accelerated growth from our high fixed cost business model. Then I'll describe our anticipated earnings trajectory over the next few years through roughly 2028, and I'll end with our expected leverage improvement and how our strong adjusted EBITDA growth and corresponding cash flow growth are expected to position us quickly to reduce our leverage and generate meaningful shareholder returns. Now for 2025. We previewed our earnings in our pre-release on Wednesday of this week. We reported strong results that meaningfully exceeded our initial guide from the beginning of the year, including 3 consecutive guidance raises. We achieved results within both our upwardly revised adjusted EBITDA and our RevPAR guidance ranges. Delivering on our commitments is a key priority of mine and this leadership team. Our 2025 annual adjusted EBITDA was $458 million, which is above the midpoint of the revised guidance range and a 19% increase over 2024. Since 2021, we have increased our adjusted EBITDA 230%. Over 2025, consolidated RevPAR grew 5.7% over last year and was also above the midpoint of our revised guidance range. Our year-over-year RevPAR growth was driven by 230 basis points of an increase in our weighted average occupancy and a 2.7% year-over-year increase in our RevPOR or our pricing. We ended the year with same-community fourth quarter weighted average occupancy of 83.5%, which was a 220 basis increase over last year. Our fourth quarter occupancy growth was stronger than our normal seasonal trend, giving us momentum coming into 2026 and marked the fourth -- and the fourth quarter marked our 16th consecutive triple-digit year-over-year occupancy growth. Move-ins continue to perform well, and we were above pre-pandemic averages for the fifth straight quarter. Resident attrition rates continue to improve. For 2025 and for the first time since the pandemic, we were adjusted free cash flow positive for the year with both our owned and our leased portfolios being cash flow positive. Growing occupancy was a priority for 2025 for our company. Our business model includes relatively high fixed costs and as occupancy increases past the 80% inflection point of covering those fixed costs -- that fixed cost structure, significant value is created through higher revenue flow-through to operating income and adjusted EBITDA. To illustrate this, we recently started to share our adjusted EBITDA on a per unit basis broken out by occupancy band in our quarterly investor presentation. Communities with occupancy over 80% on average are producing operating income 4x greater on a per unit basis than those below 70%. The higher operating income on a per unit basis is driven by higher revenue flowing through from the fixed cost nature of the business. When you think about our occupancy bands, there's 2 ways that we can accelerate value. In our lower occupied bands, we'll continue -- we'll continue focusing on increasing our occupancy, creating that significant value from the revenue flow-through. On our higher occupancy bands, we'll continue to focus on pricing. In the highly occupied communities, particularly in markets that are also in highly -- with high occupancy levels, we believe that the market demand will support a higher RevPOR and in turn, will drive adjusted EBITDA with the accelerated rate. At the end of 2025, approximately 13% or just over 4,000 units of our owned same community units were under 70% occupied. And at those lower occupancy communities, our adjusted EBITDA per unit was roughly 1/4 of the communities with the occupancy above 80%. The math simply dictates if you moved those 4,000 units in the below 70% occupancy band up just to the next occupancy band, 70% to 80%, that move alone would create almost $20 million in annual adjusted EBITDA. Similarly, 28% of our units or about 8,500 units were between the 70% and 80% occupancy bands and had adjusted EBITDA per unit at about just half of those in the above 80% occupancy. Here, the math dictates moving those 8,500 units up to the above 80% occupancy will create about $80 million of annual adjusted EBITDA. And this is without any future rate increase consideration, which would further give us more opportunity for growth. In moving units up in the occupancy bands -- in 2025, moving these units up in our occupancy bands was a priority. During the year, we made significant progress on the below 70% communities. Additionally, important for us is the RevPOR export spread at Brookdale. We've been focusing on making sure that we are capturing that market -- that margin expansion. As we continue to lean into top line growth through both rate and occupancy, we would expect to capture the benefit of a larger net pricing spread over the next several years. Finishing on 2025. For the full year, we produced significantly -- significant positive adjusted free cash flow. We ended the year with strong liquidity, and our annualized leverage was 8.9x with an improved balance sheet position. There's more to discuss regarding our 2025 results in the upcoming earnings call in February, and we're excited about the strong results, the occupancy momentum that sets us up for accelerated growth for 2026 and beyond. So before I get into 2026, I want to take a moment to make sure you understand our guidance philosophy. We're focused on delivering the financial commitments that we make to our investors. This starts with establishing a thoughtful and appropriate targets that are both credible and grounded in the realities that we know at a particular time. Importantly, we don't stop there. We regularly seek to identify opportunities for outperformance and strive to execute and deliver on those opportunities. In thinking through 2026, I'd like to first review the appropriate 2025 baseline given our significant disposition and lease transition and cost rationalization that we did in 2025. As we preannounced, our consolidated full year 2025 adjusted EBITDA was $458 million. If you were to carve out all of the puts and takes of dispositions, lease terminations and associated cost rationalization efforts, our baseline adjusted EBITDA for 2025 would be approximately $445 million. In Wednesday's press release, we presented 2026 guidance of adjusted EBITDA of $502 million to $516 million and RevPAR growth of 8% to 9%. Our 2026 RevPAR growth expectations include the accretive impact of disposition communities, both owned and leased that we announced in 2025. This includes the Ventas' 55 communities that transitioned during the second half of 2025 and the 42 previously announced dispositions, of which about 30 of those dispositions we expect to transition in the first half of 2026 as well as a higher annual rate increase for 2026 as compared to 2025. Our guidance is built on a number of assumptions, several of which I'll speak to. First, our portfolio. The 517 communities that Nick talked about and we expect to have and the -- that equates to 41,500 units in '26 after the completion of all of the dispositions with almost 75% of those units being owned. Owning our assets allows us to capture the full economic benefit of the tailwind behind the industry. And at the same time, we are pleased with our lease portfolio, particularly following the recent lease recalibrations that we've done over the last few years, our lease portfolio is now cash flow positive. We received the cash flow benefit of landlord-funded CapEx on a number of our master leases and we effectively have a fixed sub 3% on average rate escalator. With the work we've done on these leases, they are now positioned to contribute to our shareholder -- to shareholder value. Second, on our top line, we remain diligent with our pricing. We implemented a higher 2026 in-place rate increase compared to 2025, which is supported by industry supply and demand dynamics as well as our own higher occupancy levels. Our consolidated annual occupancy growth is expected to be greater than our historical average and greater than prior year with continued strong move-in volume and the accretive impact of dispositions. Remember, our move-out volume in absolute numbers will grow simply with our larger resident base. Third is our expenses. Labor is 65% of our cost base. As labor inflation in the markets moderate, we expect our labor costs to continue to stabilize. We've made significant progress on the turnover and retention of our associates, particularly in the past year. That's important because as we keep our associates longer, particularly our key 3 leaders, they become more efficient in their roles and have a higher positive impact on productivity as well as retention -- resident retention and satisfaction. From a G&A perspective, we have been prudent with our G&A. We've rightsized our cost structure to our appropriate ongoing business. We remain diligent in ensuring profitable occupancy growth. And as a result, we expect favorable flow-through in our 2026 rate increase given the higher fixed cost component of our business. We were pleased with our December occupancy results, which provide strong occupancy momentum as we close 2025, and we head into 2026, we expect that momentum to continue. In summary, here are the things that we're excited about from 2026, expected continued occupancy growth, coupled with improved economics and the company moving the communities from the lower to the higher occupancy bands, stronger RevPOR growth, which is supported by the macroeconomic backdrop of our industry. And as a result, both stronger occupancy and pricing, we should enjoy stronger RevPAR growth. Our margins, we expect higher flow-through via fixed cost leverage and as we appropriately manage our costs. All of this results in continued significant adjusted EBITDA growth and allowing us to play offense and evaluate capital deployment opportunities, as Nick has already discussed. and in turn, creating shareholder value. I know how we deploy capital is important to all of you in the room and on the video. First, I want to talk a little bit about our philosophy as I understand, having a strong balance sheet is very important, particularly in times of volatility. Our first priority is to invest in our business and the organic growth that we have right in front of us. It's critical to ensure that we invest in our capital expenditures across the enterprise and continue to take advantage of the demographic tailwind behind us. Additionally, we plan to pivot to an offensive posture in looking at small acquisitions and opportunities that make sense for us in the markets that we're in. Next, I would like to turn to the multiyear outlook for the business. The fixed cost nature of our business creates the opportunity for accelerated growth as we exceed the fixed cost base, recently realizing the approximate 80% inflection point at which we cover our fixed costs. As a result, further top line growth will have an outsized impact to adjusted EBITDA and cash flow, creating meaningful shareholder value. The runway ahead of us is particularly exciting given the low inventory currently characterizing our industry against a strong looming demand landscape, which is undeniable function of the American aging population. We are primarily a needs-based business and at a 94% private pay rate, we are set up for growth. We expect strong top line growth given both occupancy and rate growth. In '25, we grew our same community occupancy 210 basis points year-over-year ending with 83.5% fourth quarter weighted average occupancy. 2025 was a strong focus on growing our occupancy, particularly in our low occupied communities, and we plan to continue that into 2026. We expect consolidated occupancy to be above 83%. Remember, even with the consistent attrition rate, our higher resident base manifests into a higher absolute number of move-outs. Our historical high occupancy of 89% further validates that we continue to have significant opportunity even before considering the upcoming supply and demand dynamics. We expect to continue to optimize pricing in light of the supply and demand dynamics. We have opportunity in our pricing with the ability to set price, our discipline and in our implementation of it across our networks that Nick discussed. We are increasing the sophistication of our pricing process and implementation in order to be more disciplined and stratify markets to identify best pricing in that market in order to achieve maximum results. We expect to continue to grow our RevPOR above our expected ExPOR and identify opportunities, particularly in our higher occupied communities to continue to drive top line growth. Moving to adjusted EBITDA. We expect continued mid-teens growth in adjusted EBITDA over the next several years. This is driven by the top line growth we just discussed, coupled with the continued margin expansion due to the significant pull-through of the RevPAR growth into operating income, adjusted EBITDA and subsequently cash flows. Because we're over that inflection point of covering our fixed costs, we expect to continue to widen the spread of RevPOR and ExPOR over the next several years. To put a finer point on the meaningful multiyear opportunity, with our current portfolio, a 1% increase in occupancy currently is about $23 million in annual incremental operating income. That's assuming a 70% flow-through, which we would expect to increase as occupancy increases. On the right-hand chart is pricing. A 1% increase in RevPOR over expense inflation is currently $27 million in incremental operating income. The single largest annual impact on our results is our annual rate increase. As we see the benefit of the supply and demand tailwinds and remain disciplined with our pricing, the benefit also remains impactful. Looking at the multiyear step-up. If we just start with 2025 baseline of $445 million of adjusted EBITDA, as I said, we expect continued occupancy growth and the RevPOR export spread to widen, resulting in about $64 million of increased adjusted EBITDA at the midpoint of our 2026 guide range. This equates to mid-teens year-over-year growth from the baseline. The ensuing 2 years, '27 and '28 will follow similar trends, but with larger absolute growth from a larger base. Note that we see opportunity for additional upside from incremental occupancy and pricing growth. Turning to our balance sheet. We're always very proactive in managing our balance sheet. We announced in mid-January the refinancing of all of our 2026 mortgage debt maturities as well as a portion of our 2027 mortgage debt maturities while further strengthening our balance sheet. The continued successful execution of our strategy has resulted in the operational strength that underpins these favorable refinancings and gives us the confidence in our ability to continue to successfully address future mortgage debt maturities in the normal course. Further, these transactions demonstrate Brookdale's strong relationship with multiple lenders, including both agency and existing commercial lenders. We have a well-staggering debt maturity schedule and expect to manage our debt maturities in the normal course. Looking at leverage, the single biggest way for us to reduce leverage is to increase our adjusted EBITDA. Given the accelerated growth in adjusted EBITDA we walked through, we expect a meaningful reduction in our leverage, targeting below 6x. The simple math of reducing our net debt of $4 billion for expected acquisition proceeds and growing adjusted EBITDA year-over-year at the mid-teens growth leverage falls below 6x. And this does not include the assumed reduction in net debt for cash, the cash flow that we'll generate from a higher adjusted EBITDA. Bringing it all together, the multiyear effect of the accelerated adjusted EBITDA growth with mid-teens will create significant shareholder value. Our current trading multiple is below our REIT peers. As we've passed the cost of covering our debt, our stronger cash flow from adjusted EBITDA growth will continue to reduce net debt, while our adjusted EBITDA is growing at a rate of mid-teens, all resulting in leverage targeting below 6x. This results in outsized growth in shareholder value as we've hit the inflection point of growth as a company with our occupancy. Overall, the earnings power of the enterprise remains significant. I remain confident in our ability to deliver mid-teens adjusted EBITDA growth for the next several years. In closing, we had a strong 2025. We strengthened our management team with operational experience and with operational experience and underpinning a redesigned regional operating structure. Our outlook for 2026 is exciting, and we believe that we're still in the early innings of a multiyear growth run based on macro factors and Brookdale's improved structure and our focus on operational excellence. And with that, I'll turn it over to Mike for Q&A.

Okay. Thanks, Dawn. Next up, moving on to Q&A for those of you who are here with us in the room today. Just 3 requests. First off, on Wednesday, we announced preliminary financial results, a limited number of financial results. So we ask that you keep those questions more towards our longer-term vision that we outlined here today and a little bit less on the quarter. We will have our normal quarterly release in mid-February, and that's when we will answer all the questions that are specific to the quarter. Second off, none of them have computers up here. So if you want to ask really detailed modeling questions, try to catch us offline. We'll give you much better answers. And then I guess, logistically, each table has a microphone on it. So the way it will work is I will point to you, push there's a button on there, the microphone will turn green. That means it's live. Please identify yourself by name and firm, ask your question and push it again and it will turn red, which means it's no longer a live mic. It's important that people ask the questions into the microphone so that the audience who's not in the room with us can hear it. So I guess with that, we'll start out. Start out with Brian.

Brian Tanquilut from Jefferies. Maybe, Nick, I'll start with one of the goals that was set in the presentation is getting the milestone of 89% occupancy. So curious how you're thinking about the time line to getting there? And then my second question would be highlighting the fact that now you own 75% of your real estate. And as Dawn said, trading below the REITs, obviously. But how do you think about the strategy on the real estate ownership as we see that number potentially going higher as you do more acquisitions?

Thanks, Brian. Mic is on. Perfect. So 84.5% is the first milestone. As Dawn showed on her slides, we do project to hit that in 2026. That should be no surprise. 89% is a nice next milestone, the historical high level, as you alluded and as I mentioned. So the growth -- so last year, we grew 220 basis points, roughly calling the same. The reality is the path, and I don't want to pin a specific time line. We're not quite there yet to say, hey, by this date, by this year. But I think as you think of NIC, as you think of specific markets, even though we lag NIC, our competitors will start filling up. They're going to be 100% occupied. We said supply is not growing as fast as the need is growing, which means we will naturally be potentially another great option in markets where we're not also fully occupied. So if anything, again, I want to be careful how I say this, but if anything, our occupancy growth pace potentially could actually expand beyond the success we had this year and previous year just based on the realities of where we are in specific markets. The other part of it is where we are leaning into markets, that market campaign component. We're obviously picking markets where we're not the strongest or that we feel we have the greatest runway. So that's another thing that will hopefully pick up that pace because we're not focusing on markets that are already at 92%, 93%, 94% occupied. In other words, the runway, the gap from where we are to where we go will only speed that up. Again, I don't want to pin down a specific date, but to say we'll hit the 89%, confident probably within kind of that multiyear projection again, giving a specific date would be a little foolhardy. I think your next question was around us owning our own real estate. So today, we're at 75%. I already mentioned that some of the leases we have give us very nicely structured purchase options, and we're going to definitely explore those when the time is right to see if that's an option. I also very clearly talked about targeted, very deliberate but small acquisitions to fill that bingo card. So I guess the net is not -- we're not going to see a step change. It's not going to go from 70% to 80% to 85% to 90%. That's not what I'm talking about. So on the margins, I feel pretty confident to say we'll be right around the 75%, but it will slowly tick up because of the leasing, because of the acquisitions and the fact that we just don't plan on taking any more leases. I mean we are in the ownership game, and we want that number to increase. So I guess that's a long way of me saying 75% is pretty well stabilized and only increasing moderately.

Joanna Gajuk with Bank of America. So actually, I want to ask about the CapEx plan. So there's a lot of discussion there. It sounds like you have very strategic plans in certain markets. And I think you called out you have 50 assets under 70% occupancy now, right? And you said 130 communities that are in this high opportunity bucket. So I want to ask about, I guess, those 2 different buckets. But did you look at those assets? And do you have a number for us to kind of talk about in terms of how much CapEx those assets require either bucket or combined buckets?

Yes. And I'll have the team kind of chime in with a few more details. So no, we don't have the specific capital that's going to go against those 130 communities because sometimes the HORT it's not about capital. It's about the right Executive Director and it's a leadership thing. Sometimes it's a marketing play. We need to do better marketing. So there's many different levers we pull and our -- the results show how as we pull those levers, we've been fairly successful. And one of those levers is capital. So very clearly, it is -- there is a CapEx component. The pivot and kind of the evolution over the last several months, last several quarters and going into the future is how we deploy that capital will be more comprehensive and deliberate in nature. As again, I use this word as opposed to piecemeal type stuff like man, the dining room tables are awful. Let's fix the dining room tables. then we'll come back later and the carpet in the foyer is awful. Like we're going to lean in. And again, for those of you who took the tour, hopefully, you saw what that looks like in one of our communities in Green Hills, where you take a very concerted, deliberate decision to invest and make a 19-year-old building look in effect, like a brand-new fresh building. So that's kind of the overall theme of our capital deployment in our existing communities, for sure, the HORT, but it goes even beyond the HORT. And I'm kind of going into this whole bingo card concept where Dallas is a great example. We want to win in Plano. Unfortunately, again, this is a little illustrative. It's not -- I'm kind of making up a story here, but we want to win in Plano. The community in Plano is not the best showing community and yet is a great community with a great team. We will make that remodeling decision, a big comprehensive package, just as we did in Green Hills that again, many of you toured. Anything else to add on this one?

No, I think that's -- that is the capital strategy is as we think about -- we haven't put out our guidance for 2026 yet on the CapEx numbers that we'll be spending. That will come with our 10-K in a few weeks here. But as we think through the network strategy and deploying our capital more smartly, we're already spending on a net basis over $3,000 a unit. And if you look at that on a gross basis, where Nick talked a lot about, I talked about lessor reimbursements for our CapEx, we're spending a lot more than that on a per unit basis. So we are spending a significant amount. So doing it more smartly is a lot of what we're getting the benefit from. We've seen it with the HORT over the last year, and we expect to continue to see that benefit.

Josh?

Josh Raskin with Nephron Research. So 2 questions. I guess, first, just the numbers question. What percentage of your 2025 OpEx were fixed? And how do we consider labor within that because it sounds like there's actually a fixed component of labor. And then how did you come up with that 70% flow-through going forward? And then I've got a follow-up.

Yes. And so we haven't disclosed what percentage of our costs are fixed costs because it's going to vary by community. So if you think about our product type, our independent living will have less labor than our assisted living or our memory care. And so that fixed cost base will absolutely vary by size of community, by your product type. And then the flow-through of 70% is kind of the weighting average of our different product types. So if you think about an independent living, there's no care costs. And so the flow-through becomes really high when you cover your fixed costs. But when you think about assisted living or memory care or skilled nursing, as you bring more residents on, the acuity levels will certainly dictate what your labor costs are going to be. And so that 70% is kind of the weighting of our different product types and how we see that inflection point.

Let me add a real practical scenario here. So we only have one executive director, right, whether it's 5% occupied or 100%, only one executive director, so that's the easy one that obviously, that's one fixed cost. We're able to leverage that with additional revenue. Here's another one. Most states -- and by the way, internal policy, overnight, you have to have one team member minimum per floor, like that's kind of a minimum standard. Sometimes it's more than that. And that's minimum, whether there's one resident on that floor or 100 residents. So that's a very real example that as the floors fill, we still only have to have that minimum. Maybe we start stepping it up potentially. But the reality is the amount of labor is -- it's a step function, even though the revenue is more of a slope. The only truly variable, I guess, is food cost. that's more highly variable, but labor is very lumpy, and it's lumpy in that you get a bunch of revenue, then you go to the next step. You get a bunch of revenue, you go to the next step. And then as you do the math, and we've done the math, it's about a 70% flow-through.

You talked a lot about HealthPlus as a differentiator. Can you talk a little bit more about your partners? I think you mentioned you signed 3 new value-based care contracts. Like what does that mean? Who are these partners? And how are they helping in the local communities?

I'll take the first swipe and then maybe I'll get the folks who know this even better than me. It is IE-SNP, Medicare Advantage folks. So I know that's a little bit under pressure this week for sure. So that's one population. Another one is very much the ACO REACH and MSSP. ACO REACH is being sunset, I think it's being replaced fundamentally by the ACO LEAD. So in effect, we build relationships in those 3 buckets, whereby they are incentivized for amazing care, good quality care. There's a financial benefit based on the savings they're able to generate off of baseline. We help support all of that with our own health care support, our health and wellness support. And as a result, we get a cut of those savings, quite often prenegotiated at a minimum PMPM rate and anything above that, we're able to share. So that's the other fundamental structure. Obviously, as you guys probably well know, this world is very regionally based. So MA plans build great regional networks. So we tie into that. Same thing with ACO REACH, ACO -- sorry, MSSP, but that's fundamentally what that is, Josh.

Andrew Mok with Barclays. I appreciate the new 6x leverage target by 2028. Can you clarify whether that is balance sheet net debt only? Or does that also include the off-balance sheet operating leases? And given the commitment and emphasis to CapEx and M&A, is it fair that net debt will remain relatively flat over the next few years?

Absolutely.

Andrew, can you say it again on the microphone?

Sure. So I appreciate the new 6x leverage target by 2028. Can you clarify whether that is balance sheet net debt only? Or does that also include the off-balance sheet operating leases? And given the commitment and emphasis to CapEx and M&A, is it fair that net debt will remain relatively flat over the next few years?

It's a great question. Thank you, Andrew. It is balance sheet net debt, not including the operating leases as we present in our supplement and our capital structure in our supplement. As far as the M&A activity, our net debt is $4 billion. We expect to refinance our maturity ladder in the normal course, and I wouldn't expect that our net debt is going to significantly move from where we're at. We're very focused on reinvesting in our communities. And if we do an acquisition, it would be something that's relatively small.

Maybe just a follow-up to Josh's question. Previously, I think Brookdale had a framework where every 100 basis points of occupancy yielded close to $40 million of revenue. Now you're presenting 100 basis points of occupancy worth $23 million to OI, which at a 70% flow-through represents about $33 million of revenue. So can you help us understand the implicit revision in the new framework, especially in the context of accelerating rents?

Thank you, Andrew. It's a great clarification. It's all related to -- it's supposed to be a data point that we're presenting, and it certainly is related to the fact that we've been divesting communities. So our portfolio is down 10%. And so those numbers will shift. We're presenting it on a consolidated portfolio.

Dave?

Dave Larsen with BTIG. Can you talk about the drivers of the same-store occupancy growth rates? How much of that is coming from sort of natural demographic demand versus selling efforts? And then when we think about selling, can you get a little bit more specific like are you selling into doc groups or health plans? Or is this sort of direct-to-consumer or word of mouth? It's that occupancy growth rate that I think is really the driver of the story here.

Yes. So I mean, fundamentally, the occupancy growth is coming from the dynamics. I hopefully made that point pretty clear. We definitely feel it. We're seeing it already. So that's the underpinning the macroeconomic layer on what will drive occupancy is the fact that demand is growing, supply is not growing anywhere near as fast. I'll remind you, 4% CAGR on the 80-plus population beginning this moment, 0.6% CAGR as it is today on inventory growth. Will it go to 1%, Will it go to 1.5%, Maybe. I don't think it will go to 4% anytime soon, especially with the starts in construction. So that's the underpinning of it fundamentally. But then it's about the fact that we have structured ourselves operationally. Again, I'll use the word operationally broadly to include sales and all the other things going where we're looking to win markets. So we can create that outsized occupancy growth because we're going to lean in with our campaign focus. I failed to mention it was a bullet on the slides on the Dallas example. I think I had it up there. We are going to be implementing very focused sales incentive structures that are bespoke to a market. Typically, we have a national commission program for our sales folks. It's a community-based program. It does have a referral component if they refer to a sister Brookdale community. We can do even some other cool imaginative, innovative things to really take the sales team we have in the market, call it, here in Nashville or Dallas to sell the entire Brookdale product across all the communities in that market and not just the community you happen to be based out of as a sales leader. So that's another part of the occupancy growth. Last part, actually, it's not last. There's a lot, but I'll just -- I'll hit 3. A lot of marketing effort. Mary Sue mentioned it briefly, and it's a little subtle, but it's far more impactful. We have an amazing marketing team, a lot of marketing power. I welcome all of you to take a look at our Brookdale website. I would argue the best website, content-rich, which, by the way, ties closely to kind of a generative AI play that -- because that's -- it's scraping that knowledge. And we get a lot of pull through that website, through our marketing effort to our dedicated contact center, our own Brookdale employees who will answer the phone if you call 1-800 Brookdale, and I just made that up, we literally have 23,000 different phone numbers that we can call. So it's also a marketing-focused play to drive brand awareness and drive folks to Brookdale as their first entry point into senior living, at which point, typically, if we can get a tour, we convert to a move-in. So those are just some of the fundamentals. And I apologize, you had, I think, a secondary question that already. Actually, anything to add, Mary Sue or...

No, I think you made a good point. And remembering that overall, for Brookdale, we have brand awareness and all of this deep rich data that can drive local marketing plans because the decision is local. And so the reputation you asked about other ways that we attract prospects. And a lot of that is through our local health care referral sources and our reputation of the community in that marketplace. So who we do outreach with and get referrals from is very important as well.

And then just longer term, could you see yourself ever getting into, for example, the hospice business or home health business or the long-term care pharmacy business longer term to wrap around your services here, which could perhaps make it a more attractive option for seniors?

Yes. So I have been the COO, President of the largest hospice company. I've been the COO of the largest home health company. So I guess the question is quite appropriate. I'll tell you what, until we get to mid-90s occupancy, and again, I'm just picking a number. Our core business is senior living. That's the value that's where the real value comes to our shareholders. We want to really focus on that first and foremost. If and when we get to that point, we will very rapidly be looking at ancillary kind of secondary type things. I will also highlight we are under noncompete currently where we really can't get into hospice and home health for the next 1.5 years, I believe, just because of the business we sold. So already, there's a legal framework that doesn't allow us. But I will tell you, it's an interesting proposition. It is something that we did very well in the past. We could do very well in the future. But for right now, I want the team, I want the company to focus on the core product, which is senior living, which is where the need really is. There are plenty of hospice operators and home health operators and the cost entry is so low. It's very fragmented and very noisy. So not quite there yet. Does that answer your question?

Absolutely. One more quick one. Are you going to bear downside risk in these value-based care contracts given the movement in the Medicare stocks this week? I'm hoping no.

No.

Next question, Ben.

Ben Hendrix from RBC Capital Markets. I just want to follow up a little bit more on the CapEx discussion. You noted the comprehensive CapEx remodeling shift rather than just kind of one-off projects. I'm just wondering if those type of projects, what's the overall landscape and pipeline for the number of those that you would like to complete in a year on average? Is the cost of those incorporated in the $3,000 per unit that you discussed on? Or is -- are these particular projects going to a higher CapEx per unit level?

I'll take the first swing, then Dawn will add some more. So our CapEx spend for 2026, again, we're not there to disclose specific. It should be roughly in line with what we did in 2025 on a per unit basis. Again, keeping in mind, we do have that funding that's coming from our lessors, which again, aligns incentives. So not only is it nice that we're getting the money, but now we're aligned for the value creation in that real estate. As far as the specific pipeline, we have the projects we have in mind. I don't know the number off the top of my head. We have the number of projects in mind. We know the spend we want to deploy. Right now, we're prioritizing and it's in context of that market campaign idea. So we know where we want to be. We know what market they're in. Now we're connecting all the dots to actually implement, and we've already implemented several. So there are already many in flight. And again, when it's comprehensive, I just want to be clear, it's things like we'll replace all the carpeting. That's usually an easy one. Lighting is a big deal. I don't know if you guys have ever walked in and you have the different color warmth of lights. You got the fluorescent light and then the soft light and it's kind of dark so just cleaning all that up. So usually, there's a lighting component. There is a furniture component typically. Furniture gets pretty beat up in senior living with all the walkers and the wheelchairs and things of that nature. And then it's very much flooring outside of the carpeting itself. So that fundamentally is typically what we're talking about. So it's not millions and millions upon millions of dollars. It is sizable, but nonetheless, it's a nice package. But the real point, again, I want to keep hitting this, it's not piecemeal in nature. So where we do not get value from NOI is to say, man, our spec couch is torn up, let's replace the couch and spend $5,000 at a couch cost now? That doesn't drive NOI. What drives NOI is to say, not only is that Couch bad, we haven't replaced this carpet in years, and it's showing it, let's replace it all. So Dawn, what else to add?

No I think, Ben, I think if you think about the $3,000 also per unit, everything that Nick said, they're incorporated in that is not only the fact that we have normal course unit turns. We have first impression CapEx, which we've been talking about for the last several years, where we get a very high return as soon as we're putting first impressions into our communities, we're seeing our occupancy grow. That's baked into that $3,000 a unit. It's also replacing a roof, replacing -- redoing a driveway. That's already baked into that $3,000 per unit. And oh, by the way, we have some adjusted EBITDA-enhancing CapEx already baked into that $3,000. So everything Nick said is taking that bucket and what we have been doing and shifting it and making sure that we're investing it smartly and in places where we're going to see a return on it is a lot of the shift. And as we continue to be cash flow positive, we said that we will reinvest in our business and reinvest. So I think that consistently evaluating what our CapEx needs are and what -- with our cash -- being cash flow positive, how much we can put towards our communities is certainly something that we'll continue to talk about.

The other thing I'll share, as Dawn was describing this, one thing that this company was known as Program Max. where it was more repositioning a community. And there are many opportunities of that. So what happens sometimes, you look at occupancy in a market, but the reality is you have to look at it as assisted living versus memory care versus independent living, like they -- sometimes they work in different speeds. And there are many markets in many of our communities that are 100% occupied in memory care. Assisted living might be 60%, 70% occupied, but the need in memory care, there's a massive undersupply. There's a need in that community. And the math that was done 20 years ago when they built it was the wrong ratios. Now you're living with that wrong ratio. We have the freedom quite often, and we have not done in a while, but we have the freedom and the expertise where we can redeploy, we can move walls. We can take a skilled nursing section and turn it into memory care. And that's just one very simple example where this idea of very deliberate CapEx deployment for NOI expansion is around an example like that where, guys, we're on a waitlist on memory care. How do we generate more memory care capacity? Great for the community, great for the market, great for us, where we can take that underutilized assisted living space or skilled nursing space and fill it up quickly in memory care. That's another example of a very targeted deliberate CapEx deployment.

Great. And just separately, any way to ballpark for 2025 kind of what your RevPOR to export spread was across occupancy bands?

When you get our -- when we publish our supplement, we'll have that in a couple of weeks for you.

A.J. Rice from UBS. Two bigger picture questions. Obviously, the demographic slides you were showing is very compelling, and you've got that sort of wave transitioning from IL to AL and beyond. Is there any reason to think that there will be more or less people that would end up in an AL setting than an IL setting? Or is it pretty much just linear as you lay it out there?

Yes. Hard to answer that specifically, A.J. I'll take a swipe at this. First things first, AL is needs-based. As you get turn 80 to 81 and 82, physical needs, cognitive needs, it is needs-based. Independent living, a little more discretionary. So here's what potentially could happen. Potentially, AL might fill up at some point because historically, IL has outpaced, and I think that's because you are introduced to IL earlier in age. It's average age at 82, more discretionary. AL at some point will become needs-based where you don't have that choice. I hopefully made the point, the alternatives are kind of cost prohibitive and by the way, not great alternatives. So there is a world potentially where AL will fill up, then IL will naturally be full, but then you have choices. You don't -- as a resident, you don't have to be an IL, it's a choice because you want to remove the burdens of operating and owning a home. You want someone cooking your meals, you want someone coming and doing housekeeping and you want to live alongside your friends, et cetera. So I don't know if I'm directly answering your question and maybe others can chime in. But I do believe there's a world where AI will fill up and the need will continue to be there because there are no alternatives, I there are alternatives.

Then the other thing I was going to ask, so you're talking about 3 to 5 years once you identify you want to put a place in and it takes that long to do it. In some other segments of health care facilities, people are talking about, well, I can use some prefab or I can do other things to either accelerate or reduce the cost of new construction. Is there anything you're looking at along that -- those lines or others are looking at that would change the dynamics of either time to market or how much it might cost?

Yes, I don't think so. And I'll be honest, a lot of the time line is not even the construction. It's the entitlements and zoning because quite often, you're trying to put these in semi-residential areas. In a very unfortunate environment, many local residents fight it. They really don't want another condo. Now again, you make the argument like there's not as much traffic. It's a different -- but I'll tell you the zoning and entitlement is far more challenging than you'd imagine than other stuff like townhomes or other multifamily housing or retail, that type of thing. So the construction part is a meaningful part, but it's actually -- I think it's more of a zoning entitlement and then it's the licensing and surveying on the back end once you do have a building. Let me throw out an thing. I didn't mention this and sort of aligned to what you just asked, A.J., and I meant to share this when I did my presentation. The other reality on construction, the constructions that are happening today because of the costs associated with them and it's materials and labor and all the noise, interest, the cost of capital, the rate that they need to cover -- to make this a good investment is typically higher. It's a different price point for that eventual customer than where we are. So even if you were to plot a brand-new community right across the street from an existing Brookdale, we're targeting a different customer base. So not only is construction stifled right now, a lot of the construction that is coming online, the new developments, we're not even -- they're not -- it's a different competitive set because of the rates. So that's the other thing. not exactly related to your question, but I think important to understand.

Good. Any more questions over here? Don't be shy.

Joanna has another one.

So Mary Sue, nice to have you back. So I figure I should ask a question. So talking about the new structure of the organization, kind of what's your thinking about that? And more importantly, what's the feedback from the field in terms of just like how you guys are going to run this company going forward?

Yes. I think it starts at our community support center because now the key operation departments that interrelate with the field are now under one COO. So together, we strategize and make sure our plan is streamlined in its communication out to the field. Then those 6 Vice Presidents of Operations who are running those 6 regions have their complement of the same leadership team that we have at the community support center. And so they can take all of those strategies and drive it down into the field, into their market. So they have the playbooks to pull off the shelf, but food is a good example of that, right? So we can set menus. We want to control food costs at that national level of scale. But we might serve barbecue in Texas a lot more often than we do in New York region, right? And so being able to customize those strategies and programs into those markets, I think, make just us more successful with customer experiences. I think the other thing is, too, it gives us an opportunity to make it easier for the Executive Director to receive clear strategic initiatives down through one column of operations. And as Nick says, operations just isn't operations, it's also marketing and sales and HR and finance. but it gives us clear direction for that Executive director, not getting so many different communications and initiatives that are not coordinated. It also allows a VP of Operations, like we hold them accountable now for their portfolio performance. They hold their districts and then their executive directors and a clear line of accountability. The feedback from the field has been great, right? Executive directors want to be successful. And so a big part of their day is making sure that culturally, all that passion and partnership and managing our associates comes alive that takes a lot of heart. But they're also running their own little company. And so as we call them the CEOs of their community, they also have to have financial acumen. And that's where I think we can help by, again, making it clear on what are the performance metrics that we're monitoring. Here's how you need to execute them. And oh, by the way, you have a red flag on the dashboard that you log into every morning that they can focus on that, deal with it and then do the rest of their day. So I think it's clear communication, one voice, less layers.

Let me add a couple of points to that. And I've had the pleasure of having maybe around 100 EDs like in the same room, we've been going on road shows and all the executive directors from the surrounding communities from about a 2-hour driving distance get to come in. In fact, I'll be in Denver next week I think -- so we'll be in the Denver, Colorado market. And when we're in front of all the EDs, we talk about empowerment. I don't think that's where it's come up yet. It's about empowering them as Executive Director. And what does empowerment mean? It means you set the expectation, you tell them what the goal is. You give them the resources, the support you give them, but you also hold them accountable. And the other concept we talk about quite often and all the Brookdale folks will probably start rolling their eyes is the idea of guardrails. So we talk about guardrails. So we -- I mean, we'll sit down and again, I've talked to all our EDs multiple times, virtually, 100 of them in person. And it's this idea of we, as a company, will open up the guardrails more than you probably ever had before. We're going to give you the keys to the bus and you're going to drive the team down that road. We're going to help pave that road for you with the resources we have. We're going to tell you where you're going based on our mission, our objective, our budget, and you will drive that bus within those guardrails. Sometimes they'll be very, very wide, maybe even nonexistent. Hopefully, nobody goes off the road. Sometimes there'll be very narrow guardrails. And things like pricing, we're going to narrow the guardrails, and those will be more centrally driven. Again, there's still some leeway. I mean, they need to own their business. They're the ones who know it far better than me or Mary Sue or anybody else. But there's this idea of guardrails. Again, some things very wide, some things super narrow and then everything in between.

Can I ask a follow-up on the -- you mentioned the compensation or I guess, how you drive the results at the local level. So did you guys change compensation structure to kind of drive the results?

Let me take that. We are -- we have not announced it yet to the company. So I think there's some exciting things coming. So I don't want to get too far on my skis. There's some exciting things happening for our key leaders in our company around just everyone aligning around success and what that looks like. So yes.

Okay. Great. Looking for hands. Ben?

Just one more question. The NIC data you noted kind of shows that there's a lot of occupancy in IL and you pointed out in your Dallas market that one big IL that you operate serves as a funnel. Just wanted to see to -- considering that that's kind of where a lot of AL volume may be coming from in the future as we continue to age, whether -- does it make sense to put some acquisition activity towards IL at this point and increase mix there? Or is this something that you can address purely from your marketing strategies?

Yes. Great question, Ben. The Dallas case study, and again, purely illustrative, I hope I don't get a bunch of broker calls in Dallas, hey, Nick, I've got an IL for you, which happens anyway. So in Dallas, I would love to have another IL, I truly would. And the way we get there is through an acquisition, very targeted. But I also -- at the same moment, I'm going to say that's not where our core is. We're far more on the needs based. That's where we really, really shine. And I have a strong sense that with better marketing, better cross-selling structure, incentive structure, better operational leadership and expectation setting, we don't have to feed from IL. And the reality is, I mean, it is a feeder. It's not -- I don't even know what the number is, but it's I'll say in the 10%, 20%, 30%, maybe even lower. The main feed is direct to AL typically. It's not -- you have to go through IL to come to AL. Otherwise, you're blocked out. That is one channel. The major channel is -- all the major channels are outside of that. So again, that is an example. We have better levers to pull in markets like Dallas to make it work.

Great quick scan of the room here. Perfect. I think that then brings us to the end of our Q&A period. I'd like to turn it over to Nick for some closing comments.

Yes. I'll just share a couple of thoughts. I kicked off this morning with this idea of enriching the lives of those we serve, doing it with compassion, respect, excellence and integrity. Again, I don't want to get too much here, but I hope you guys enjoyed your day today. For those of you that were able to join us for dinner and we're able to do the tour yesterday, hopefully, more we'll do the tour today. I hope we were able to enrich your lives. As a company, we fully embrace all our stakeholders. I shared that I was amazingly grateful for the warm welcome I received from many of you, the great insight, the great engagement, and we're going to continue that. And as we expand our investor base, hopefully, we'll open our arms and fully embrace all of you. So what that means is we're available. If you have questions, one-off, a couple of folks have already said, "Hey, do you mind if we meet 20, 30 minutes," kind of newer folks in the space, we'll definitely make myself and the leadership team, the management team available to you. So with that, I think we are done for the day. Thank you, everyone. Thank you for the team that put this together. Thank you, guys.