Brookdale Senior Living Inc.

our President and Chief Executive Officer, and Don Cusseau, our Executive Vice President and Chief Financial Officer. All statements today which are not historical facts may be deemed to be forward-looking statements within the meaning of the federal securities laws. 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, and certain of the factors that could cause actual results to differ are detailed in the earnings release we issued yesterday, as well as in the reports we file with the SEC from time to time, including the risk factors contained in our annual report on Form 10-K and quarterly reports on Form 10-Q. I direct you to the release of the full Safe Harbor Statement. Also, please note that during this call, we will present non-GAAP financial measures. For reconciliations of each non-GAAP measure from the most comparable GAAP measure, I direct you to the release and supplemental information, which may be found at brickdaleinvestors.com and was furnished on an 8K yesterday. Now, I will turn the call over to Cindy. Thank you, Jessica.

Good morning to all of our shareholders, analysts, and other call participants. Welcome to our first quarter 2024 earnings call. In the first quarter, we made great progress on our key strategic priorities, which are designed to not only pave the way for operational excellence and sustainable long-term growth, but also to support the health and wellbeing of our residents and associates. At Brookdale, our unwavering commitment is and has been the health and well-being of our residents and associates. We know that aging presents new challenges for seniors and they, along with their families, often struggle with their evolving needs. Many times, these needs include a significant increase in chronic conditions, increased feelings of loneliness and isolation, and support to complete even the most basic activities of daily living. At Brookdale, we take pride in our ability to help seniors manage these challenges of aging through high quality care and personalized services, all in a home-like setting, surrounded by a community of friends. But our commitment doesn't stop with our residents. Our business depends on people taking care of people And as such, our greatest asset is our associates. Each Brookdale associate has the meaningful privilege to truly enrich our residents lives with compassion, respect, excellence, and integrity. Our mission embodies Brookdale's commitment to a culture of caring and excellence. Through our key strategic priorities and our relentless dedication to the health and well being of our residents and associates, we are seeing meaningful positive outcomes being realized for our residents and associates in our community operations and throughout our financial results. I'll share with you many of these positive first quarter outcomes, including an accelerating year over year occupancy growth trend, another year of favorable rate growth that is supporting profitable census increases, and our continued triple-digit same-community margin expansion. It remains undeniable that demand from the target senior demographic is here and rising. We remain focused on our goal to meet this growing demand and to be the nation's first choice in senior living. With the strong start to the new year, including the Sustainable Growth Week continue to deliver, I am filled with tremendous optimism for our ability to capture the incredible opportunity that lies ahead. In the first quarter, we maintained an intense focus on our key strategic priorities. Building on our strong momentum from 2023 and with the continued successful execution of these priorities, we are proud to report another quarter of positive operational performance where we once again delivered results within or better than our previously provided guidance ranges. Using our strategic framework as a guide, I'm proud to share with you our recent progress and noteworthy accomplishments. Beginning first with our priority to get every available room in service at the best profitable rate. In the first quarter, on a same community basis, RevPAR grew 6.3% over the prior year which supported operating income margin of 27.6%, our highest reported adjusted margin rate since the initial impact of the pandemic. As Dawn will share, this represents an important milestone on our road to pre-pandemic margins and beyond. Our effective January 1st rate increase coupled with 150 basis points of year-over-year same community occupancy growth and continued appropriate expense management contributed to these strong results. We were very pleased that our year over year occupancy increased every month of the first quarter, accelerating from our fourth quarter growth level and exceeding our initial expectations. There continues to be robust demand for our services and a recognition for the strong value proposition that Brookdale provides, resulting in more seniors choosing to call Brookdale home. In the first quarter, our move-ins exceeded pre-pandemic levels by 7.5%. Though not quite as high as our prior year first quarter move-in level, we are still pleased with the strong demand that we are seeing. We're also grateful that first quarter move-outs improved relative to both the prior year and pre-pandemic levels. By holding steadfast to our commitment to consistent and profitable year-over-year occupancy increases while continuing to meet our residents' needs, provide high-quality care and personalized service, and remain in compliance with applicable regulations, we are building a significant runway for future revenue and operating income growth as we serve more seniors in the quarters and decades to come. Turning to our next strategic priority to attract engage, develop, and retain the best associates. A simple philosophy resonates within Brookdale. If we take care of our associates, they in turn will take care of our residents. That is why this strategic priority remains critical to our long-term success. With this in mind, I am very pleased with our incredible progress to attract, engage, develop, and retain the best associates, which has already had a positive impact on our operations performance and financial results, while simultaneously strengthening our teams and creating lasting benefits for the future. The pandemic significantly affected the workforce in our industry, leading to a nationwide shortage of healthcare workers. In 2022, we increased our internal workforce by approximately 15% with nearly 5,000 net hires, which supported more shifts being filled by our own Brookdale associates rather than contract labor. Then in 2023, we refined the executive director role introduced enhanced leadership training and focused on enhancing our associate onboarding experience to support better turnover and retention, particularly within the first 90 days. During the first quarter, we've been pleased with our continued improvement in key three leadership retention, which includes our executive director, health and wellness director, and sales director, and in our associate turnover. As part of this, we are incredibly proud that our trailing 12-month executive director retention rate through the first quarter has reached nearly 70% retention. This is critical as we have found that when an executive director is in place at least two years, those communities have higher overall profitability. Given the significant progress we've made over the last two years to stabilize our overall workforce, In 2024, we are refreshing our hourly training to be more engaging and personalized for our associates, while ensuring that we continue to provide high quality care and maintain regulatory compliance. It's still early, but we are excited about this opportunity and the impact it will have for our associates' productivity and growth in their career opportunities. Third is our strategic priority to earn resident and family trust and satisfaction by providing valued, high-quality care and personalized service. At Brookdale, we remain committed to continuous improvement, and we believe feedback is a gift. Thanks to strong engagement for our residents and their families, including approximately 65,000 internal and third-party satisfaction surveys over the past 12 months, we are able to gain meaningful insights. These insights enable us to appropriately address areas of opportunity within our communities, and we've been pleased with the progress we've made to continually improve resident satisfaction. Most recently, our internal resident satisfaction ratings increased each month of the first quarter. I believe this reflects the positive outcomes of our continued efforts in this critical area and speaks to our dedication to compassionate, high-quality care and personalized service. While we believe our customer focus is strong, we feel a deep sense of pride when our industry leadership is recognized externally. whether that's when our individual communities are acknowledged as the best of, or when one of our differentiated Brookdale programs receives a notable recognition. In just the last few weeks, we've been honored with three unique external distinctions. First, our ClearBridge Alzheimer's and Dementia Care Training was recently certified by the Alzheimer's Association for its demonstrated commitment to providing evidence-based training with a person-centered focus. We are proud of our industry leading expertise in the care of those with Alzheimer's and other related dementias. Today, Brookdale operates more than 9,000 memory care units that support residents and their families who are impacted by these diseases. The number of seniors who need these services is growing rapidly. By 2030, The CDC expects 8.5 million Americans will be living with Alzheimer's disease. We are confident in the effectiveness of our Alzheimer's and dementia care program to support those living with these chronic conditions, and we are honored to have this certification of our ClearBridge training. Second, Brookdale was recognized once again with the most communities on U.S. News and World Report Best of Senior Living Listings. This year, more Brookdale communities were recognized as a Best of winner than ever in our history, and we are proud to lead the industry in community recognition for the third year in a row. I believe this is a testament to the trust our residents and their families place in us, the quality of the care we are providing, and the unique Brookdale programs that we believe support improved resident outcomes. Third, as yet another recognition of our differentiated programs, Argentum awarded Brookdale as a 2024 Best of the Best winner for our innovative Brookdale Health Plus program. Noting that, innovative programs like this show unparalleled passion and commitment to providing an optimal environment for the residents and families we serve. As I've shared before, Brookdale Health Plus delivers measurable positive outcomes, and we believe that over the long term, through programs like Health Plus, we will further improve the quality of life for our residents, increase the satisfaction of our customers and their loved ones, while also reducing costs to residents, their families, and the overall healthcare system, and delivering value to our shareholders. We are very proud of this Argentum Best of the Best Award as we strive to continue to differentiate ourselves through clinical excellence and an emphasis on value-based care. In summary, we entered 2024 with a clear vision, an intense focus, and a dedication to continued positive results. Already this year, we have delivered meaningful, positive outcomes across our key strategic priorities. With the first quarter annualized, we have recovered 97% of our 2019 adjusted EBITDA. At the same time, we are keenly focused on the incredible opportunity ahead of us from recovering our pre-pandemic occupancy and margins. Our consistent forward progress each quarter reinforces my confidence that the plans we are executing combined with industry supply and demand dynamics and Brookdale's key differentiators will drive significant growth for decades to come. We are excited to continue our positive momentum in the second quarter and throughout 2024. I'll now turn the call over to Dawn.

Thank you, Cindy. Good morning, and thank you for being here today. Cindy shared highlights of our positive first quarter operational and financial progress. I'll provide additional color on our first quarter results, and then I'll speak to our second quarter guidance. Beginning with first quarter revenue. Resident fee revenue grew 4.3% over the prior year first quarter. At the top end of our previously provided first quarter guidance range, consolidated REVPAR grew 6.7% over the prior year first quarter, which was attributable to a 160 basis point increase in weighted average occupancy and a 4.4% REVPAR growth. Marking our 10th consecutive quarter of year-over-year occupancy growth, the first quarter's 160 basis point increase reflects a positive acceleration of our recent occupancy growth trends. We are also pleased to report that the sequential occupancy change from the fourth quarter of 2023 to the first quarter of 2024 was meaningfully better than normal pre-pandemic seasonality for this period. Specific to first quarter REV poor, as a reminder, while higher than historic norms, we implemented a lower average January 1st rate increase than in the prior year. We remain focused on ensuring appropriate pricing to match the services we deliver in our communities while remaining affordable to our residents and appropriately addressing our costs. As reflected in our results, this year's January 1st increase effectively supported continued REVPOR growth, improved year-over-year financial move-outs, and strong flow-through as evidenced by our margin growth. Specific to our same community portfolio, First quarter REVPAR increased 6.3% over the prior year, driven by 150 basis points of occupancy growth and a 4.3% increase in REVPOR. We are pleased with our continued top line progress, including first quarter occupancy that was better than normal seasonality, strong demand, and year-over-year improvement in controllable attrition. Moving to first quarter expenses. Consolidated facility operating expense was $543 million, while same community facility operating expense, as shown on page 8 of our financial supplement, was $528 million. Same community labor expense, as a percent of revenue, improved 150 basis points compared to the prior year first quarter. This was a result of favorable flow-through of top-line growth given the fixed cost nature of our business, reductions in contract labor and overtime, and the favorable impact of improved leadership retention and hourly associate turnover. We are very pleased to realize these favorable outcomes from our strategic priorities, particularly considering the year-over-year incremental expense increase from Leap Day. Same community other facility operating expense as a percent of revenue was flat to the prior year. Driving the dollar expense increase over the prior year first quarter were a number of marginal factors, including the higher cost of property and casualty coverage, including higher premiums and higher retained risk, technology enhancements, including upgraded Wi-Fi within our independent living portfolio, and an outsourcing of our data centers. as well as broad inflationary pressure and the impact of an extra day. Importantly, the data center outsourcing is neutral from a cash flow perspective. Our continued favorable same community revenue to expense spread drove 140 basis points of 27.6% of revenue. As Cindy shared, this represents our highest reported adjusted margin rate since the initial impact of the pandemic. Reflecting our 10th consecutive quarter of meaningful year-over-year same community growth, first quarter adjusted operating income increased by 12% over the prior year first quarter. Continued progress on the top line and ongoing appropriate expense management have supported these results as well as supporting our achievement of a meaningful milestone in our pandemic recovery. On a per available unit basis, our annualized first quarter same community operating income surpassed our 2019 same community operating income per available unit. Given the significant runway still available for occupancy growth, we believe this not only reflects a remarkable accomplishment, but also positions us well over the near and long term as occupancy continues to grow. I am very proud of our continued progress as we diligently work to return to pre-pandemic segment operating margins, while continuing to ensure that we meet our residents' needs, provide high-quality care and services, and remain in compliance with applicable regulations. First quarter, general and administrative expense was relatively flat to the prior year first quarter, excluding prior year restructuring costs. Cash operating lease payments were $65 million. These financial results culminated in first quarter adjusted EBITDA of $98 million, which exceeded the top end of our guidance range by approximately $3 million. This outperformance was due to favorability in labor expense, driven predominantly by wage rate. Compared to the prior year of first quarter, adjusted EBITDA increased $9 million, or 10%. As we shared previously, when comparing first quarter adjusted EBITDA to the first quarter of 2023, there are several factors that presented a meaningful headwind to year-over-year growth results. First, the prior year first quarter included approximately $2.3 million in government grant revenue. Second, as a result of the May 2023 change in lease classification, We had approximately $7.4 million of lease payments that impacted adjusted EBITDA this year but did not affect last year and did not impact cash rent payments. Third, our current year first quarter adjusted EBITDA results include approximately $2 million of incremental expense from the January winter storms. And lastly, the current year first quarter included an extra day for leap year, which resulted in approximately $3 million of incremental expense with only a minor impact to revenue. Considering the magnitude of these factors combined, we are very pleased with our year-over-year adjusted EBITDA growth results. Adjusted free cash flow was negative $26 million for the quarter, As expected, our first quarter change in working capital was negative $22 million and represented the largest impact when comparing first quarter adjusted free cash flow to the prior year first quarter. As normal core seasonality, annual incentive compensation payments occurred during the first quarter and are reflected in our change in working capital results. Additionally, unique to this quarter was the impact of cash long-term incentive payments related to awards that were granted in lieu of equity in 2021 following satisfaction of certain performance conditions. Given Brookdale's strong 2023 performance and the timing of the unique approximately $4 million long-term incentive grant, the cash impact of our current period incentive compensation payments was larger than in recent prior years. First quarter non-development capital expenditures were $51 million. We continue to anticipate approximately $180 million of net non-development capital expenditures in 2024. First quarter interest expense net was relatively flat to the fourth quarter of 2023. As of March 31st, total liquidity was $355 million compared to $341 million at the end of the 2023 fourth quarter. We are pleased with this liquidity position and that we have no mortgage debt maturities without extension options until September 2025. Turning to the second quarter, in yesterday's press release, we guided to second quarter REVPAR growth of 6.25% to 6.75% over the prior year and adjusted EBITDA in the range of $93 to $98 million. Contributing to our REVPAR expectations, we anticipate our second quarter weighted average occupancy to increase sequentially from the first quarter, representing favorable performance when compared to normal pre-pandemic seasonality for this period. This favorable expectation reflects our strong first quarter move-ins and the anticipation for continued positive recovery from the impact of the pandemic. Regarding rev pour, we expect a step down sequentially from first quarter rev pour to second quarter rev pour. A sequential step down between these two quarters is normal course and has varied historically in amount based upon a number of factors, including product mix and care rates, as newer residents generally move in with lower acuity and therefore have a lower care rate than existing residents. We are pleased that our top-line expectations will support another quarter of meaningful year-over-year revenue growth, particularly considering we received more than $4 million in state grant revenue in the second quarter of 2023. We expect to exit the second quarter with a capacity of 50,950 units or 1,000 fewer units than at the same time last year as a result of owned and leased dispositions over the 12-month period. We believe that with our continued expected occupancy recovery as we build upon our strong occupancy start to this year, our year-over-year REVPAR growth rate will further improve throughout the year. When considering our second quarter adjusted EBITDA guidance, We believe that beyond our expected favorable occupancy growth compared to the first quarter and continued appropriate expense management, the cadence of our results will be largely in line as it relates to the seasonal sequential performance as shown on the last page of our investor presentation. In closing, we are pleased to have delivered another quarter of strong year-over-year growth. We are confident that our disciplined approach to achieving positive outcomes and sustainable growth while maintaining a commitment to quality and excellence will yield favorable results in 2024 and for decades to come. I'll now turn the call back over to Cindy.