8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)	May 6, 2009 (May 6, 2009)

Brookdale Senior Living Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-32641	20-3068069
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)
111 Westwood Place, Suite 200, Brentwood, Tennessee		37027
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code		(615) 221-2250
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 — Financial Information

Item 2.02     Results of Operations and Financial Condition.

On May 6, 2009, Brookdale Senior Living Inc. (the “Company”) issued a press release announcing its first quarter 2009 financial results and announcing a conference call to review these results. A copy of the press release is furnished herewith as Exhibit 99.1.

Supplemental information relating to the Company’s first quarter 2009 results is furnished herewith as Exhibit 99.2.

The information furnished pursuant to this Current Report on Form 8-K (including the exhibits hereto) shall not be considered “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth by specific reference in such filing that such information is to be considered “filed” or incorporated by reference therein.

Section 7 — Regulation FD

Item 7.01     Regulation FD Disclosure.

The information set forth in Item 2.02 of this report is incorporated herein by reference.

Section 9 — Financial Statements and Exhibits

Item 9.01     Financial Statements and Exhibits.

(d)	Exhibits
99.1	Press Release dated May 6, 2009
99.2	Supplemental Information

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		BROOKDALE SENIOR LIVING INC.
Date:	May 6, 2009	By:	/s/ T. Andrew Smith
		Name:	T. Andrew Smith
		Title:	Executive Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Press Release dated May 6, 2009.
99.2	Supplemental Information.

EX-99.1

Contact:                                                                             FOR IMMEDIATE RELEASE

Brookdale Senior Living Inc.

Ross Roadman  615-376-2412

Brookdale Announces First Quarter 2009 Results; CFFO of $0.49 per Share

Highlights

·   Cash From Facility Operations grew 20% to $0.49 per outstanding common share from $0.41 per outstanding common share (excluding integration costs in Q1 2008)

·   Improved average monthly revenue per unit by 5.4% from $3,759 to $3,961. Average occupancy was 88.7%, down from 90.0% in Q1 2008

·   Increased revenue by $17.3 million, or 3.6%, to $497.9 million

·   Improved Facility Operating Income by $5.9 million, or 3.5%, to $173.0 million

·   Reduced outstanding cash revolver balance on the line of credit by $40.0 million from the February amendment date to $155.0 million at March 31, 2009 and by a total of $55 million to $140 million currently.

Nashville, TN.  May 6, 2009– Brookdale Senior Living Inc. (NYSE: BKD) (the “Company”) today reported financial and operating results for the first quarter of 2009.

Bill Sheriff, Brookdale’s CEO, said, “We had a very good start to the year.  Our organization’s response to the call to action has been incredible.  After January's typical occupancy decline, our sales and marketing team held occupancy steady through the end of March despite the challenging environment.  At the same time, our revenue per unit increased by over 5%, helped partially by our ancillary services programs.  However, the most significant improvement came through the actions of our organization to comprehensively examine our costs and execute on numerous cost control measures. As the first quarter results show, we made significant progress toward adjusting our cost structure to better face these difficult times.”

Mark Ohlendorf, Co-President and CFO of Brookdale, commented, “We are very happy with the progress we have made so far this year in improving our balance sheet and, particularly, in addressing our near-term debt maturities.  The Company remains in a solid liquidity position – we have virtually no mortgage debt maturing until 2011 that does not contain contractual extension options and had reduced our line of credit borrowings by $40 million by the end of the quarter through solid operating cash flow, diligent cash management and several financing transactions.  Subsequent to quarter end, we further reduced the line balance by $15 million.  Our

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goals continue to focus on using the cash flow generated by our operations to reduce our corporate leverage and on managing the maturity profile of our property-level financings.”

Financial Results

Total revenue for the first quarter was $497.9 million, an increase of $17.3 million, or 3.6% from the first quarter of 2008.  The increase in revenue was primarily driven by an increase in average revenue per unit, including growing revenues from ancillary services, partially offset by a decline in occupancy.  Average monthly revenue per unit was $3,961 in the first quarter, an increase of 5.4% over the first quarter of 2008.  Average occupancy for the first quarter was 88.7%, down from 90.0% for the first quarter of 2008.

Facility operating expenses for the first quarter were $318.1 million, an increase of $13.1 million, or 4.3%, from the first quarter of 2008.  The increase was primarily driven by the growth of ancillary services and expenses associated with expansions.  With the positive impact of the Company’s cost control initiatives, facility operating expenses, excluding the impact of ancillary services and expansions, increased by 1.2% from the first quarter of 2008.  The operating contribution margin for the total company was 36.1% for the first quarter of 2009, a 260 basis point improvement over the fourth quarter of 2008.

General and administrative expenses for the first quarter were $33.7 million, down from $36.4 million in the first quarter of 2008.  Excluding non-cash compensation expense for both periods, the decrease was $1.5 million, reflecting cost control measures at the corporate level.  As a percentage of revenue (including revenues under management), general and administrative expenses (excluding non-cash compensation in both periods and integration expenses in 2008) were 4.9% in the first quarters of 2009 and 2008.

Brookdale’s management utilizes Adjusted EBITDA and Cash From Facility Operations to evaluate the Company’s performance and liquidity because these metrics exclude non-cash expenses such as depreciation and amortization, non-cash stock-based compensation expense and straight-line lease expense, net of deferred gain amortization.  Brookdale also uses Facility Operating Income to assess the performance of its facilities.

For the quarter ended March 31, 2009, Facility Operating Income was $173.0 million and Adjusted EBITDA was $85.9 million, in each case a $5.9 million increase over the first quarter of 2008.

Cash From Facility Operations was $50.2 million for the first quarter of 2009, or $0.49 per common share outstanding at March 31, 2009.  This was an $0.11 per share increase over the first quarter of 2008 and a $0.17 per share increase over the fourth quarter of 2008.  Cash From Facility Operations for the first quarter of 2009 included a $1.2 million tax benefit related to a prior-year tax audit of an acquired company.  Included in the first and fourth quarters of 2008 are integration and other non-recurring costs of $2.9 million and $3.5 million, respectively.

Net loss for the first quarter of 2009 was $(13.6) million, or $(0.13) per diluted common share. The loss for the quarter includes non-cash items for depreciation and amortization, non-cash stock-based compensation expense and straight-line lease expense, net of deferred gain amortization, which totaled $79.6 million.

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Operating Activities

Same community revenues grew 4.0% for the quarter ended March 31, 2009 over the same period in 2008 as revenue per unit increased by 5.3% and occupancy fell by 1.1%.  Same community Facility Operating Income for the quarter increased by 4.5% when compared to the first quarter of 2008 as expenses grew by 3.8%.  Same community revenues grew 3.9% for the twelve months ended March 31, 2009 over the corresponding period ending in 2008, and same community Facility Operating Income decreased 0.2% over the corresponding period ending in 2008.  The twelve month same community data excludes $7.0 million of charges in the fourth quarter of 2007 relating to integration-related accounting items and named-tropical storm costs of $4.8 million in the last three quarters of 2008.

By the end of the first quarter, the Company’s ancillary services programs provided therapy services to 35,000 Brookdale units.  At the end of the quarter, the Company’s home health agencies were serving over 16,500 units across the total consolidated Brookdale portfolio, up from 6,600 units served a year ago.  The therapy and home health services produced $167 of monthly Facility Operating Income per occupied unit in the first quarter across all units served, up from $125 per month a year ago and $143 in the fourth quarter of 2008, driven primarily by maturation of existing clinics and the acquisitions of home health agencies.  In the legacy ARC portfolio alone, which has a higher health center mix than the balance of the Brookdale portfolio, monthly Facility Operating Income from therapy and home health services per occupied unit in the first quarter was $243.

During the quarter, the Company opened three expansions with 128 units. There are currently four expansion projects under construction that will add a total of 611 additional units in 2009.  Two of these projects are leased and two are owned with financing in place and no additional equity required.

Balance Sheet

As previously announced, the Company entered into a Second Amended and Restated Credit Agreement during the first quarter.  The amended credit agreement, with an August 2010 maturity, currently consists of a $220 million revolving loan facility with a $25 million letter of credit sublimit.  As of March 31, 2009, there was $175.8 million outstanding on the line of credit, including $155.0 million of cash borrowings and $20.8 million of letters of credit, a reduction of $42.5 million from the initial balance at the closing of the amended line at the end of February.  Brookdale had $52.5 million of unrestricted cash on its balance sheet at the end of the first quarter.  Subsequent to the end of the quarter, the Company further reduced the line of credit by $15.0 million, resulting in a current line balance of $160.8 million.

During the first quarter of 2009 and subsequent to the quarter end, giving effect to the pending exercise of an extension option, Brookdale has extended the maturity of virtually all of its mortgage debt initially due in 2009.  Therefore, the Company currently has virtually no mortgage debt maturities before 2011 that do not contain contractual extension options.

During the quarter, the Company closed on a sale leaseback of one community and sold its minority interests in several communities to the majority owner for total proceeds of $18.0 million.

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Additional Filings

The Company will file on or about May 6, 2009 a Form 8-K with the SEC which includes supplemental information relating to the Company’s first quarter 2009 results.  This filing will also be available through the Investor Relations section of the Company’s website upon filing – www.brookdaleliving.com.

Earnings Conference Call

Brookdale’s management will conduct a conference call on Thursday, May 7, 2009 to review the financial results of its first quarter ended March 31, 2009.  The conference call is scheduled for 10:00 AM ET.  All interested parties are welcome to participate in the live conference call.  The conference call can be accessed by dialing (866) 845-7252 (from within the U.S.) or (706) 634-9069 (from outside of the U.S.) ten minutes prior to the scheduled start and referencing the “Brookdale Senior Living First Quarter Earnings Call.”

A webcast of the conference call will be available to the public on a listen-only basis at www.brookdaleliving.com.  Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.  A replay of the webcast will be available for three months following the call.

For those who cannot listen to the live call, a replay will be available until 11:59 PM ET on May 14, 2009 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.) and referencing access code “97498283.”  A copy of this earnings release is posted on the Investor Relations page of the Brookdale website (www.brookdaleliving.com).

About Brookdale Senior Living

Brookdale Senior Living Inc. is a leading owner and operator of senior living communities throughout the United States.  The Company is committed to providing an exceptional living experience through properties that are designed, purpose-built and operated to provide the highest-quality service, care and living accommodations for residents.  Currently the Company owns and operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 548 communities in 35 states and the ability to serve approximately 52,000 residents.

Safe Harbor

Certain items in this press release and the associated earnings conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Those forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including, but not limited to, statements relating to our operational initiatives and our expectations regarding their effect on our results; our expectations regarding occupancy, revenue, expense levels, the demand for senior housing, acquisition opportunities and asset dispositions; our belief regarding our growth prospects; our ability to secure financing or repay, replace or extend existing debt at or prior to maturity; our ability to remain in compliance with all of our debt and lease agreements (including the financial covenants contained therein); our expectations regarding liquidity; our plans to deleverage; our expectations regarding financings and refinancings of assets; our plans to generate growth

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organically through occupancy improvements, increases in annual rental rates and the achievement of operating efficiencies and cost savings; our plans to expand our offering of ancillary services (therapy and home health); our plans to expand existing communities; the expected project costs for our expansion program; our expected levels of expenditures and reimbursements (and the timing thereof); the anticipated cost and expense associated with the resolution of pending litigation and our expectations regarding the disposition thereof; our expectations for the performance of our entrance fee communities; our ability to anticipate, manage and address industry trends and their effect on our business; and our ability to increase revenues, earnings, Adjusted EBITDA, Cash From Facility Operations, and/or Facility Operating Income.  Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "would," "project," "predict," "continue," "plan" or other similar words or expressions.  Forward-looking statements are based on certain assumptions or estimates, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition, or state other forward-looking information.  Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects or which could cause events or circumstances to differ from these forward-looking statements include, but are not limited to, the risk associated with the current global economic crisis and its impact upon capital markets and liquidity; our inability to extend (or refinance) debt as it matures or replace our amended credit facility when it matures; the risk that we may not be able to satisfy the conditions precedent to exercising the extension options associated with certain of our debt agreements; events which adversely affect the ability of seniors to afford our monthly resident fees or entrance fees; the conditions of housing markets in certain geographic areas; our ability to generate sufficient cash flow to cover required interest and long-term operating lease payments; the effect of our indebtedness and long-term operating leases on our liquidity; the risk of loss of property pursuant to our mortgage debt and long-term lease obligations; the possibilities that changes in the capital markets, including changes in interest rates and/or credit spreads, or other factors could make financing more expensive or unavailable to us; the risk that we may be required to post additional cash collateral in connection with our interest rate swaps; the risk that continued market deterioration could jeopardize certain of our counterparties’ obligations; changes in governmental reimbursement programs; our limited operating history on a combined basis; our ability to effectively manage our growth; our ability to maintain consistent quality control; delays in obtaining regulatory approvals; our ability to integrate acquisitions into our operations; competition for the acquisition of assets; our ability to obtain additional capital on terms acceptable to us; a decrease in the overall demand for senior housing; our vulnerability to economic downturns; acts of nature in certain geographic areas; terminations of our resident agreements and vacancies in the living spaces we lease; increased competition for skilled personnel; increased union activity; departure of our key officers; increases in market interest rates; environmental contamination at any of our facilities; failure to comply with existing environmental laws; an adverse determination or resolution of complaints filed against us; the cost and difficulty of complying with increasing and evolving regulation; and other risks detailed from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.  When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings.  Readers are

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cautioned not to place undue reliance on any of these forward-looking statements, which reflect our management's views as of the date of this press release and/or the associated earnings conference call.  The factors discussed above and the other factors noted in our SEC filings from time to time could cause our actual results to differ significantly from those contained in any forward-looking statement.  We cannot guarantee future results, levels of activity, performance or achievements and we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

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Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except for per share data)

	Three Months Ended
	March 31,
	2009			2008
Revenue
Resident fees	$	496,229		$	478,835
Management fees		1,717			1,813
Total revenue		497,946			480,648
Expense
Facility operating expense (excluding depreciation and amortization of $45,693 and $50,890, respectively)		318,112			305,059
General and administrative expense (including non-cash stock-based compensation expense of $6,809 and $8,010, respectively)		33,707			36,388
Facility lease expense		67,741			67,812
Depreciation and amortization		68,133			71,940
Total operating expense		487,693			481,199
Income (loss) from operations		10,253			(551	)
Interest income		820			1,626
Interest expense:
Debt		(32,821	)		(35,871	)
Amortization of deferred financing costs		(1,542	)		(1,557	)
Change in fair value of derivatives and amortization		(4,285	)		(45,633	)
Loss on extinguishment of debt		-			(2,821	)
Equity in earnings (loss) of unconsolidated ventures		595			(173	)
Other non-operating income		4,232			-
Loss before income taxes		(22,748	)		(84,980	)
Benefit for income taxes		9,112			29,887
Net loss	$	(13,636	)	$	(55,093	)
Basic and diluted loss per share	$	(0.13	)	$	(0.54	)
Weighted average shares used in
computing basic and diluted loss per share		101,738			101,995
Dividends declared per share	$	-		$	0.25

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Condensed Consolidated Balance Sheets

(in thousands)

	March 31, 2009		December 31, 2008
	(unaudited)
Cash and cash equivalents	$	52,507	$	53,973
Cash and escrow deposits - restricted		94,027		86,723
Accounts receivable, net		95,174		91,646
Other current assets		51,193		48,443
Total current assets		292,901		280,785
Property, plant, and equipment and
leasehold intangibles, net		3,663,099		3,697,834
Other assets, net		512,431		470,639
Total assets	$	4,468,431	$	4,449,258
Current liabilities (1)	$	570,078	$	646,012
Long-term debt, less current portion (1)		2,385,605		2,235,000
Other liabilities		558,447		607,645
Total liabilities		3,514,130		3,488,657
Stockholders’ equity		954,301		960,601
Total liabilities and stockholders’ equity	$	4,468,431	$	4,449,258
(1)  Subject to customary closing conditions, $131.0 million of mortgage debt is expected to be extended beyond March 31, 2010 on or prior to May 11, 2009.  Accordingly, the debt has been classified as long-term debt.

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Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Three Months Ended March 31,
	2009			2008
Cash Flows from Operating Activities
Net loss	$	(13,636	)	$	(55,093	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on extinguishment of debt		-			2,821
Depreciation and amortization		69,675			73,497
Equity in (earnings) loss of unconsolidated ventures		(595	)		173
Distributions from unconsolidated ventures from cumulative share of net earnings		11			190
Amortization of deferred gain		(1,086	)		(1,085	)
Amortization of entrance fees		(5,110	)		(6,691	)
Proceeds from deferred entrance fee revenue		4,872			2,780
Deferred income tax benefit		(8,194	)		(30,662	)
Change in deferred lease liability		4,248			5,751
Change in fair value of derivatives and amortization		4,285			45,633
Gain on sale of assets		(4,455	)		-
Non-cash stock-based compensation		6,809			8,010
Changes in operating assets and liabilities:
Accounts receivable, net		(3,118	)		(6,392	)
Prepaid expenses and other assets, net		(1,887	)		3,179
Accounts payable and accrued expenses		4,966			(5,083	)
Tenant refundable fees and security deposits		(370	)		1,184
Deferred revenue		15,057			3,081
Other		(2,715	)		(664	)
Net cash provided by operating activities		68,757			40,629
Cash Flows from Investing Activities
Decrease in lease security deposits and lease acquisition deposits, net		1,480			1,763
Increase in cash and escrow deposits — restricted		(57,897	)		(20,663	)
Additions to property, plant, and equipment and leasehold intangibles,
net of related payables		(33,491	)		(46,213	)
Acquisition of assets, net of related payables and cash received		-			(745	)
(Issuance of) payment on notes receivable, net		(36	)		10,112
Investment in unconsolidated ventures		(1,106	)		(356	)
Distributions received from unconsolidated ventures		525			-
Proceeds from sale leaseback transaction		9,166			-
Proceeds from sale of unconsolidated venture		8,843			-
Net cash used in investing activities		(72,516	)		(56,102	)
Cash Flows from Financing Activities
Proceeds from debt		26,521			288,479
Repayment of debt and capital lease obligations		(10,403	)		(181,327	)
Proceeds from line of credit		60,446			125,000
Repayment of line of credit		(64,899	)		(120,000	)
Payment of dividends		-			(51,897	)
Payment of financing costs, net of related payables		(6,895	)		(853	)
Other		(279	)		(403	)
Refundable entrance fees:
Proceeds from refundable entrance fees		3,638			3,492
Refunds of entrance fees		(5,836	)		(3,632	)
Recouponing and payment of swap termination		-			(23,942	)
Cash portion of loss on extinguishment of debt		-			(812	)
Net cash provided by financing activities		2,293			34,105
Net (decrease) increase in cash and cash equivalents		(1,466	)		18,632
Cash and cash equivalents at beginning of period		53,973			100,904
Cash and cash equivalents at end of period	$	52,507		$	119,536

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Non-GAAP Financial Measures

Adjusted EBITDA

Adjusted EBITDA is a measure of operating performance that is not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).  Adjusted EBITDA should not be considered in isolation or as a substitute for net income, income from operations or cash flows provided by or used in operations, as determined in accordance with GAAP.  Adjusted EBITDA is a key measure of the Company's operating performance used by management to focus on operating performance and management without mixing in items of income and expense that relate to long-term contracts and the financing and capitalization of the business.  We define Adjusted EBITDA as net income (loss) before provision (benefit) for income taxes, non-operating (income) loss items, depreciation and amortization (including non-cash impairment charges), straight-line lease expense (income), amortization of deferred gain, amortization of deferred entrance fees, and non-cash compensation expense and including entrance fee receipts and refunds.

We believe Adjusted EBITDA is useful to investors in evaluating our performance, results of operations and financial position for the following reasons:

·   It is helpful in identifying trends in our day-to-day performance because the items excluded have little or no significance to our day-to-day operations;

·   It provides an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance; and

·   It is an indication to determine if adjustments to current spending decisions are needed.

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The table below reconciles Adjusted EBITDA from net loss for the three months ended March 31, 2009 and 2008 (in thousands):

	Three Months Ended March 31,
	2009(1)			2008(1)
Net loss	$	(13,636	)	$	(55,093	)
Benefit for income taxes		(9,112	)		(29,887	)
Equity in (earnings) loss of unconsolidated ventures		(595	)		173
Loss on extinguishment of debt		-			2,821
Other non-operating income		(4,232	)		-
Interest expense:
Debt		25,727			28,987
Capitalized lease obligation		7,094			6,884
Amortization of deferred financing costs		1,542			1,557
Change in fair value of derivatives and amortization		4,285			45,633
Interest income		(820	)		(1,626	)
Income (loss) from operations		10,253			(551	)
Depreciation and amortization		68,133			71,940
Straight-line lease expense		4,248			5,751
Amortization of deferred gain		(1,086	)		(1,085	)
Amortization of entrance fees		(5,110	)		(6,691	)
Non-cash compensation expense		6,809			8,010
Entrance fee receipts(2)		8,510			6,272
Entrance fee disbursements		(5,836	)		(3,632	)
Adjusted EBITDA	$	85,921		$	80,014

(1) The calculation of Adjusted EBITDA includes integration and other non-recurring costs totaling $2.9 million for the three months ended March 31, 2008.  Integration and other non-recurring costs for the three months ended March 31, 2009 were not material to the condensed consolidated financial statements.

(2) Includes the receipt of refundable and nonrefundable entrance fees.

Cash From Facility Operations

Cash From Facility Operations (CFFO) is a measurement of liquidity that is not calculated in accordance with GAAP and should not be considered in isolation as a substitute for cash flows provided by or used in operations, as determined in accordance with GAAP.  We define CFFO as net cash provided by (used in) operating activities adjusted for changes in operating assets and liabilities, deferred interest and fees added to principal, refundable entrance fees received, entrance fee refunds disbursed, lease financing debt amortization with fair market value or no purchase options, other, and recurring capital expenditures.  Recurring capital expenditures include expenditures capitalized in accordance with GAAP that are funded from CFFO. Amounts excluded from recurring capital expenditures consist primarily of unusual or non-recurring capital items (including integration capital expenditures), facility purchases and/or major projects or renovations that are funded using financing proceeds and/or proceeds from the sale of facilities that are held for sale.

We believe CFFO is useful to investors in evaluating our liquidity for the following reasons:

·   It provides an assessment of our ability to facilitate meeting current financial and liquidity goals.

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·   To assess our ability to:

(i)   service our outstanding indebtedness;

(ii)   pay dividends; and

(iii)   make regular recurring capital expenditures to maintain and improve our facilities.

The table below reconciles CFFO from net cash provided by operating activities for the three months ended March 31, 2009 and 2008 (in thousands):

	Three Months Ended March 31,
	2009(1)			2008(1)
Net cash provided by operating activities	$	68,757		$	40,629
Changes in operating assets and liabilities		(11,933	)		4,695
Refundable entrance fees received(2)		3,638			3,492
Entrance fee refunds disbursed		(5,836	)		(3,632	)
Recurring capital expenditures, net		(2,655	)		(6,037	)
Lease financing debt amortization with fair market value or no purchase options		(1,780	)		(1,625	)
Reimbursement of operating expenses and other		-			1,063
Cash From Facility Operations	$	50,191		$	38,585

(1)   The calculation of CFFO includes integration and other non-recurring costs totaling $2.9 million for the three months ended March 31, 2008.  Integration and other non-recurring costs for the three months ended March 31, 2009 were not material to the condensed consolidated financial statements.

(2)   Total entrance fee receipts for the three months ended March 31, 2009 and 2008 were $8.5 million and $6.3 million, respectively, including $4.9 million and $2.8 million, respectively, of non-refundable entrance fee receipts included in net cash provided by operating activities.

The calculation of CFFO per outstanding common share is based on outstanding common shares at the end of the period, excluding any unvested restricted shares.

Facility Operating Income

Facility Operating Income is not a measurement of operating performance calculated in accordance with GAAP and should not be considered in isolation as a substitute for net income, income from operations, or cash flows provided by or used in operations, as determined in accordance with GAAP.  We define Facility Operating Income as net income (loss) before provision (benefit) for income taxes, non-operating (income) loss items, depreciation and amortization (including non-cash impairment charges), facility lease expense, general and administrative expense, including non-cash stock compensation expense, amortization of deferred entrance fee revenue and management fees.

We believe Facility Operating Income is useful to investors in evaluating our facility operating performance for the following reasons:

·   It is helpful in identifying trends in our day-to-day facility performance;

·   It provides an assessment of our revenue generation and expense management; and

·   It provides an indicator to determine if adjustments to current spending decisions are needed.

Page 12 of 13

The table below reconciles Facility Operating Income from net loss for the three months ended March 31, 2009 and 2008 (in thousands):

	Three Months Ended March 31,
	2009			2008
Net loss	$	(13,636	)	$	(55,093	)
Benefit for income taxes		(9,112	)		(29,887	)
Equity in (earnings) loss of unconsolidated ventures		(595	)		173
Loss on extinguishment of debt		-			2,821
Other non-operating income		(4,232	)		-
Interest expense:		-			-
Debt		25,727			28,987
Capitalized lease obligation		7,094			6,884
Amortization of deferred financing costs		1,542			1,557
Change in fair value of derivatives and amortization		4,285			45,633
Interest income		(820	)		(1,626	)
Income (loss) from operations		10,253			(551	)
Depreciation and amortization		68,133			71,940
Facility lease expense		67,741			67,812
General and administrative (including non-cash
stock compensation expense)		33,707			36,388
Amortization of entrance fees(1)		(5,110	)		(6,691	)
Management fees		(1,717	)		(1,813	)
Facility Operating Income	$	173,007		$	167,085

(1)  Entrance fee sales, net of refunds paid, provided $2.7 million and $2.6 million of cash for the three months ended March 31, 2009 and 2008, respectively.

Page 13 of 13

EX-99.2

Brookdale Senior Living Inc.

Corporate Overview - selected financial information

As of March 31, 2009

Corporate Overview

Brookdale Senior Living Inc. ("BKD") is a leading owner and operator of senior living communities throughout the United States.  The Company is committed to providing an exceptional living experience through properties that are designed, purpose-built and operated to provide the highest-quality service, care and living accommodations for residents.  Currently the Company owns and operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 548 communities in 35 states and the ability to serve approximately 52,000 residents.

Stock Listing

Common Stock

NYSE: BKD

Community Information
Ownership Type	Number of Facilities		Number of Units/Beds		Percentage of Q1 2009 Revenues			Percentage of Q1 2009 Facility Operating Income
Owned		168		18,547		39.5	%		37.4	%
Leased		358		28,993		60.1	%		61.6	%
Managed		22		4,348		0.4	%		1.0	%
Total		548		51,888		100.0	%		100.0	%
Operating Type
Retirement Centers		85		15,258		27.0	%		31.6	%
Assisted Living		406		20,808		43.7	%		43.7	%
CCRCs		35		11,474		28.9	%		23.7	%
Managed		22		4,348		0.4	%		1.0	%
Total		548		51,888		100.0	%		100.0	%

CFFO Per Share ($)
($ except where indicated)	FY 2008										FY 2009
		Q1		Q2		Q3		Q4	Full Year			Q1
Reported CFFO	$	0.38	$	0.36	$	0.22	$	0.32	$	1.28	$	0.49
Add:  hurricane costs		-		-		0.04		0.01		0.05		-
Add:  non-recurring, integration and system costs		0.03		0.10		0.04		0.02		0.19		-
Adjusted CFFO	$	0.41	$	0.46	$	0.30	$	0.35	$	1.52	$	0.49
Shares used in calculation of CFFO (000's)		102,191		101,477		101,349		101,714		101,683		101,786

Investor Relations

Ross Roadman

SVP, Investor Relations

Brookdale Senior Living

111 Westwood Place, Suite 200

Brentwood, TN 37027

Phone (615) 376-2412

rroadman@brookdaleliving.com

Note:  See accompanying first quarter earnings release for non-GAAP financial measure definitions and reconciliations.

Page 1 of 8

Brookdale Senior Living Inc.
Operating Segment Info
As of March 31, 2009
Selected Segment Operating and Other Data as Reported in the 10Q
	FY 2008															FY 2009
		Q1			Q2			Q3			Q4		Full Year				Q1
Retirement Centers
Number of communities (period end)		87			87			87			85			85			85
Total units/beds		15,747			15,693			15,710			15,251			15,251			15,258
Total units/beds excluding equity homes		15,652			15,598			15,615			15,156			15,156			15,163
Weighted average occupancy		90.5	%		89.6	%		90.6	%		90.2	%		90.3	%		88.9	%
Average monthly revenue per unit/bed	$	3,191		$	3,225		$	3,232		$	3,276		$	3,229		$	3,329
Assisted Living
Number of communities (period end)		409			410			410			409			409			406
Total units/beds		20,906			21,020			21,059			21,021			21,021			20,808
Weighted average occupancy		89.8	%		88.9	%		90.2	%		90.6	%		89.9	%		89.6	%
Average monthly revenue per unit/bed	$	3,740		$	3,751		$	3,723		$	3,737		$	3,738		$	3,895
CCRCs
Number of communities (period end)		32			32			32			32			32			35
Total units/beds		10,798			10,838			10,871			11,183			11,183			11,474
Total units/beds excluding equity homes		9,998			10,038			10,076			10,392			10,392			10,679
Weighted average occupancy		89.4	%		88.1	%		87.4	%		87.2	%		87.9	%		86.7	%
Average monthly revenue per unit/bed	$	4,699		$	4,767		$	4,810		$	4,864		$	4,759		$	5,017

Consolidated Totals
Number of communities (period end)		528			529			529			526			526			526
Total units/beds		47,451			47,551			47,640			47,455			47,455			47,540
Total units/beds excluding equity homes		46,556			46,656			46,750			46,569			46,569			46,650
Weighted average occupancy		90.0	%		88.9	%		89.7	%		89.7	%		89.6	%		88.7	%
Average monthly revenue per unit/bed	$	3,759		$	3,791		$	3,786		$	3,830		$	3,791		$	3,961

Management Services
Number of communities (period end)	22		21		21		22		22		22
Total units/beds	4,406		4,296		4,293		4,349		4,349		4,348
Weighted average occupancy	83.4	%	83.7	%	85.3	%	87.4	%	84.9	%	86.3	%

Average Occupancy and Rates based on Average Occupied Units in the Period
The table below represents occupancy based on a consistent treatment of units across all product lines. The table above is a combination of both units and beds.
	FY 2008															FY 2009
		Q1			Q2			Q3			Q4		Full Year				Q1
Retirement Centers
Number of communities (period end)		87			87			87			85			85			85
Total average units		15,623			15,569			15,586			15,127			15,127			15,139
Weighted average unit occupancy		89.3	%		88.4	%		88.9	%		89.0	%		88.9	%		87.5	%
Average monthly revenue per unit	$	3,241		$	3,274		$	3,302		$	3,328		$	3,286		$	3,387
Assisted Living
Number of communities (period end)		409			410			410			409			409			406
Total average units		19,164			19,169			19,298			19,277			19,277			19,064
Weighted average unit occupancy		86.5	%		85.6	%		86.6	%		87.2	%		86.5	%		86.1	%
Average monthly revenue per unit	$	4,235		$	4,251		$	4,228		$	4,234		$	4,237		$	4,427
CCRCs
Number of communities (period end)		32			32			32			32			32			35
Total average units		9,998			10,038			10,076			10,392			10,392			10,679
Weighted average unit occupancy		89.4	%		87.9	%		87.1	%		86.8	%		87.8	%		86.5	%
Average monthly revenue per unit	$	4,701		$	4,779		$	4,829		$	4,887		$	4,799		$	5,030

Consolidated Totals
Number of communities (period end)		528			529			529			526			526			526
Total average units		44,785			44,776			44,960			44,796			44,796			44,882
Weighted average unit occupancy		88.1	%		87.1	%		87.5	%		87.7	%		87.6	%		86.6	%
Average monthly revenue per unit	$	3,989		$	4,026		$	4,036		$	4,073		$	4,031		$	4,215

Page 2 of 8

Brookdale Senior Living Inc.
Same Community, Capital Expenditure and ISC Information
As of March 31, 2009
Same Community Information
($ in 000s, except Avg. Mo. Revenue/unit)
	Three Months Ended March 31,									Twelve Months Ended March 31,
	2009			2008			% Change			2009(1)			2008(2)			% Change
Revenue	$	470,813		$	452,509			4.0	%	$	1,837,935		$	1,768,603			3.9	%
Operating Expense		301,125			290,093			3.8	%		1,199,527			1,136,132			5.6	%
Facility Operating Income	$	169,688		$	162,416			4.5	%	$	638,408		$	632,471			0.9	%
Facility Operating Margin		36.0	%		35.9	%		0.1	%		34.7	%		35.8	%		-1.1	%
# Communities		519			519						517			517
Avg. Period Occupancy		89.1	%		90.1	%		-1.0	%		89.5	%		90.8	%		-1.3	%
Avg. Mo. Revenue/unit	$	3,936		$	3,739			5.3	%	$	3,822		$	3,625			5.4	%
Excluding the $7.0 million of charges relating to integration-related accounting items in the fourth quarter of 2007, the same community data is as follows:
	Three Months Ended March 31,									Twelve Months Ended March 31,
	2009			2008			% Change			2009(1)			2008			% Change
Revenue	$	470,813		$	452,509			4.0	%	$	1,837,935		$	1,768,603			3.9	%
Operating Expense		301,125			290,093			3.8	%		1,199,527			1,129,087			6.2	%
Facility Operating Income	$	169,688		$	162,416			4.5	%	$	638,408		$	639,516			-0.2	%
Facility Operating Margin		36.0	%		35.9	%		0.1	%		34.7	%		36.2	%		-1.5	%

(1) Excludes $4.8 million of expenses related to hurricane and named-tropical storms for the twelve months ended March 31, 2009.

(2) Includes $7.0 million of charges to facility operating expenses in the quarter ended December 31, 2007 which related to the Company's desire to conform its policies across all of its platforms including $5.9 million of estimated uncollectible accounts and $1.1 million of accounting conformity adjustments pertaining to expensing inventory and certain accrual policies.

Schedule of Capital Expenditures							Information on Ancillary Services
($ in 000s)
								Three Months Ended March 31,
	Three Months Ended March 31,							2009		2008
	2009			2008			Brookdale Units Served:
Type							Therapy
Recurring	$	3,326		$	7,197		Legacy ARC		12,711		12,711
Reimbursements		(671	)		(1,160	)	Total		34,180		29,562
Net Recurring		2,655			6,037
Corporate(1)		883			3,914		Home Health
EBITDA-enhancing(2)		3,339			13,921		Legacy ARC		10,087		7,405
							Total		16,498		6,573
Development(3)		25,943			21,181
Reimbursements(4)		(27,036	)		(1,389	)	Avg. Mo. NOI/Occupied Unit
Net Development		(1,093	)		19,792		Legacy ARC	$	243	$	185
Net Total Capital Expenditures	$	5,784		$	43,664		Total	$	167	$	125

(1) Corporate primarily includes capital expenditures for information technology systems and equipment

(2) EBITDA-enhancing capital expenditures generally represent unusual or non-recurring capital items and/or major renovations

(3) Development capital expenditures primarily relate to the facilty expansion and de novo development program

(4) Development reimbursements are typically received after expenditures are actually made.  Only includes cash reimbursement received during the period

Page 3 of 8

Brookdale Senior Living Inc.

Capital Structure - selected financial information

As of March 31, 2009

($ in 000s)

Debt Maturities and Scheduled Principal Repayments
	Initial Maturities
	Mortgage		weighted			Line of		weighted			Mort. Debt		weighted			Capital		weighted			Total
	Debt (1)		rate (2)			Credit		rate (2)			& Line		rate (2)			Leases		rate (2)			Debt
2009 (4)		3,291		7.15	%		20,759		10.00	%		24,050		9.61	%		14,250		8.29	%		38,300
2010		137,195		2.39	%		134,241		10.00	%		271,436		6.15	%		22,322		8.31	%		293,758
2011		323,235		6.76	%		-					323,235		6.76	%		25,420		8.33	%		348,655
2012		876,891		3.54	%		-					876,891		3.54	%		26,402		8.38	%		903,293
2013		488,988		5.02	%		-					488,988		5.02	%		27,676		8.42	%		516,664
Thereafter		266,298		4.69	%		-					266,298		4.69	%		197,792		9.14	%		464,090
Total		2,095,898		4.45	%		155,000		10.00	%		2,250,898		4.83	%		313,862		8.85	%		2,564,760

	Final Maturities (3)
	Mortgage		weighted			Line of		weighted			Mort. Debt		weighted			Capital		weighted			Total
	Debt (1)		rate (2)			Credit		rate (2)			& Line		rate (2)			Leases		rate (2)			Debt
2009 (4)		3,291		7.15	%		20,759		10.00	%		24,050		9.61	%		14,250		8.29	%		38,300
2010		6,195		6.77	%		134,241		10.00	%		140,436		9.86	%		22,322		8.31	%		162,758
2011		295,495		4.03	%		-					295,495		4.03	%		25,420		8.33	%		320,915
2012		875,423		3.53	%		-					875,423		3.53	%		26,402		8.38	%		901,825
2013		522,378		5.85	%		-					522,378		5.85	%		27,676		8.42	%		550,054
Thereafter		393,116		4.93	%		-					393,116		4.93	%		197,792		9.14	%		590,908
Total		2,095,898		4.45	%		155,000		10.00	%		2,250,898		4.83	%		313,862		8.85	%		2,564,760

	Coverage Ratios
		Three months ended March 31, 2009
		Units	FOI	Adj. FOI*	Interest/Cash Lease Payments	Coverage
Owned Communities		18,547	67,288	50,963	32,821	1.6x
Leased Communities		28,993	110,829	85,704	64,579	1.3x

*  Adjusted for 5% management fee and capital expenditures @ $350/unit.

	Debt Amortization
		Three months ended March 31, 2009
		2008	2009
Scheduled Debt Amortization		391	819
Lease Financing Debt Amortization - FMV or no Purchase Option (5)		1,625	1,780
Lease Financing Debt Amortization - Bargain Purchase Option		2,351	2,804
Total Debt Amortization		4,367	5,403

	Line Availability
($000s)		Dec-08	Feb-09	Mar-09
Revolver Balance		159,453	195,000	155,000
Letters of Credit Outstanding (8)		107,261	23,271	20,759
Ending Line Balance		266,714	218,271	175,759
Cash		53,973	42,139	52,507
Total Line Capacity			230,000	220,000
Total Liquidity (Line Availability + Cash)			53,868	96,748
Letters of credit outstanding on line (8)		107,261	23,271	20,759
Other letters of credit		42,475	48,475	48,475
Total letters of credit outstanding (8)		149,736	71,746	69,234

Leverage Ratios
		Annualized
	Balance	Leverage
Mortgage Debt (1)	2,095,898
Capital Leases	313,862
Total Property-Level Debt	2,409,760	7.0x
Plus: Line of Credit (cash borrowings)	155,000
Less: Cash	(52,507)
Less: Cash held as collateral against existing debt	(27,700)
Total Debt	2,484,553	7.2x
Q1 09 Adjusted EBITDA	85,921
Annualized Cash Lease Expense multiplied by 8	2,066,528
Total Adjusted Debt	4,551,081	7.6x
Q1 09 Adjusted EBITDAR	150,500

Debt Structure
		weighted
	Balance	rate (2)
Fixed Rate Mortgage Debt (1)	944,828	6.06%
Variable Rate Mortgage Debt (1)	1,151,070	3.14%
Capital Leases	313,862	8.85%
Line of Credit (cash borrowings)	155,000	10.00%
Total Debt	2,564,760
	Balance	% of total
Variable Rate debt with Interest Rate Swaps (6)	351,840	30.5%
Variable Rate debt with Interest Rate Caps (1), (7)	670,521	58.3%
Variable Rate debt - Unhedged	128,709	11.2%
Total Variable Rate Mortgage Debt	1,151,070	100.0%

(1) Also includes both bond and construction financing.

(2) Pertaining to variable rate debt, reflects a) market rates for stated reporting period and b) applicable swap rates / cap rates for hedged debt.

(3) Assumes extension options are exercised.  These options are mainly at the company's sole discretion.

(4) Gives effect to pending exercise of an extension option.

(5) Payments are included in CFFO.

(6) Weighted swap rate for stated reporting period is 3.74%.

(7) Weighted cap rate for stated reporting period of 6.02% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.

(8) Includes $32.2 million of duplicative letters of credit that were returned during the first quarter

Page 4 of 8

Brookdale Senior Living Inc.

CFFO Reconciliation

As of March 31, 2009

($ in 000s)

CFFO Calculation
	Three Months Ended March 31,
	2009			2008
Net cash provided by operating activities (includes non-refundable entrance fees)	$	68,757		$	40,629
Less: Changes in operating assets and liabilities (eliminates cash flow effect)		(11,933	)		4,695
Add: Refundable entrance fees received		3,638			3,492
Less: Entrance fee refunds disbursed		(5,836	)		(3,632	)
Less: Recurring capital expenditures, net		(2,655	)		(6,037	)
Less: Lease financing debt amortization with fair market value or no purchase options		(1,780	)		(1,625	)
Add: Reimbursement of operating expenses and other		-			1,063
Cash From Facility Operations	$	50,191		$	38,585

Revenue Reconciliation
	FY 2008															FY 2009
		Q1			Q2			Q3			Q4		Full Year				Q1
Revenue reconciliation excl. entrance fee amortization
Average monthly revenue per quarter		3,759			3,791			3,786			3,830			3,791			3,961
Average monthly units available		46,520			46,566			46,725			46,576			46,603			46,595
Average occupancy for the quarter		90.0	%		88.9	%		89.7	%		89.7	%		89.6	%		88.7	%
Resident fee revenue	$	472,144		$	470,808		$	476,043		$	480,040		$	1,899,035		$	491,119
Add:  management fee revenue		1,813			2,264			1,527			1,390			6,994			1,717
Total revenues excluding entrance fee amortization	$	473,957		$	473,072		$	477,570		$	481,430		$	1,906,029		$	492,836

CFFO Reconciliation to the Income Statement
Resident fee revenue	$	480,648		$	478,201		$	482,277		$	486,928		$	1,928,054		$	497,946
Less:  Entrance fee amortization		(6,691	)		(5,129	)		(4,707	)		(5,498	)		(22,025	)		(5,110	)
Adjusted revenues		473,957			473,072			477,570			481,430			1,906,029			492,836
Less:  Facility operating expenses		(305,059	)		(306,526	)		(326,214	)		(323,782	)		(1,261,581	)		(318,112	)
Less:  G&A excluding non-cash stock expense		(36,388	)		(40,297	)		(32,948	)		(31,286	)		(140,919	)		(33,707	)
Add:  G&A non-cash stock expense		8,010			8,621			6,737			5,569			28,937			6,809
Net G&A		(28,378	)		(31,676	)		(26,211	)		(25,717	)		(111,982	)		(26,898	)
Less:  Facility lease expense		(67,812	)		(67,199	)		(67,017	)		(67,441	)		(269,469	)		(67,741	)
Add:  Straight-line lease expense		5,751			5,215			4,709			4,910			20,585			4,248
Less:  Amortization of deferred gain		(1,085	)		(1,086	)		(1,086	)		(1,085	)		(4,342	)		(1,086	)
Net lease expense		(63,146	)		(63,070	)		(63,394	)		(63,616	)		(253,226	)		(64,579	)
Entrance fee receipts		6,272			12,597			11,526			12,077			42,472			8,510
Entrance fee disbursements		(3,632	)		(4,843	)		(5,856	)		(4,819	)		(19,150	)		(5,836	)
Net entrance fees		2,640			7,754			5,670			7,258			23,322			2,674
Adjusted EBITDA		80,014			79,554			67,421			75,573			302,562			85,921
Less:  Recurring capital expenditures, net		(6,037	)		(6,614	)		(6,965	)		(7,696	)		(27,312	)		(2,655	)
Less:  Interest expense, net		(34,245	)		(34,264	)		(36,216	)		(35,046	)		(139,771	)		(32,001	)
Less:  Lease financing debt amortization with fair market value or no purchase options		(1,625	)		(1,662	)		(1,688	)		(1,716	)		(6,691	)		(1,780	)
Less:  Other		478			(341	)		(96	)		1,315			1,356			706
Reported CFFO	$	38,585		$	36,673		$	22,456		$	32,430		$	130,144		$	50,191
Add:  hurricane costs		-			-			3,613			1,187			4,800			-
Add:  non-recurring, integration and system costs		2,880			10,447			3,902			2,282			19,511			-
Adjusted CFFO	$	41,465		$	47,120		$	29,971		$	35,899		$	154,455		$	50,191

CFFO Per Share ($)
($ except where indicated)	FY 2008										FY 2009
		Q1		Q2		Q3		Q4	Full Year			Q1
Reported CFFO	$	0.38	$	0.36	$	0.22	$	0.32	$	1.28	$	0.49
Add:  hurricane costs		-		-		0.04		0.01		0.05		-
Add:  non-recurring, integration and system costs		0.03		0.10		0.04		0.02		0.19		-
Adjusted CFFO	$	0.41	$	0.46	$	0.30	$	0.35	$	1.52	$	0.49
Shares used in calculation of CFFO (000's)		102,191		101,477		101,349		101,714		101,683		101,786

Note: CFFO is a measurement of liquidity that is not calculated in accordance with GAAP and should not be considered in isolation as a substitute for any GAAP financial measure. CFFO is not a measure of financial performance under GAAP.  We strongly urge you to review the reconciliation of CFFO to GAAP net cash provided by operating activities, along with our condensed consolidated financial statements, included in the accompanying earnings release.

Page 5 of 8

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of March 31, 2009

	Q1 07	Q2 07	Q3 07	Q4 07	Q1 08	Q2 08	Q3 08	Q4 08	Q1 09
Ending # EF Vacant Units	372	406	379	429	434	416	448	447	475
# Closings	51	60	70	60	40	78	67	65	48
# of Refunds	88	65	75	83	47	69	95	67	69
Cash Basis ($000's)
Resale Receipts:
Proceeds from non-refundable entrance fees (1)	3,916	4,726	5,673	5,015	2,780	5,177	7,253	7,391	4,872
Proceeds from refundable entrance fees (2)	4,258	4,064	8,696	8,901	3,492	7,420	4,273	4,686	3,638
Total Cash Proceeds	8,174	8,790	14,369	13,916	6,272	12,597	11,526	12,077	8,510
Refunds of entrance fees (3)	(6,315)	(4,089)	(5,084)	(4,069)	(3,632)	(4,843)	(5,856)	(4,819)	(5,836)
Net Resale Cash Flow	1,859	4,701	9,285	9,847	2,640	7,754	5,670	7,258	2,674
Average Resale $ (excluding My Choice proceeds)	160,275	143,300	153,486	153,033	145,850	151,244	163,134	178,969	170,042
Average Refund $	(71,761)	(62,908)	(67,787)	(49,024)	(79,830)	(72,623)	(61,642)	(71,925)	(84,580)

Notes:

(1)  From Statement of Cash Flows (Operating Activities section) with line description: Proceeds from deferred entrance fee revenue

(2)  From Statement of Cash Flows (Financing Activities section) with line description: Proceeds from refundable entrance fees (which includes My Choice proceeds)

(3)  From Statement of Cash Flows (Financing Activities section) with line description: Refunds of entrance fees

Value of Unsold Inventory ($ in 000's)
Gross Value @ Average Resale Price of $170,000	80,750
Refund Attachments	(6,795)
Net Cash Value	73,955

Income Statement Impact ($ in 000's)

On BKD's income statement, non-refundable entrance fees are amortized into revenue based on the unamortized balance per contract divided by the actuarial life of the resident. The following are the non-cash amortized non-refundable entrance fees for each quarter:

	Q1 07	Q2 07	Q3 07	Q4 07	Q1 08	Q2 08	Q3 08	Q4 08	Q1 09
Amortization of entrance fees (incl. gains on terminations)	(4,259)	(4,641)	(5,322)	(5,019)	(6,691)	(5,129)	(4,707)	(5,498)	(5,110)

Principles of Entry Fee Accounting

Certain of BKD's communities have residency agreements which require the resident to pay an upfront fee prior to occupying the community and in return for a reduced monthly service fee and certain healthcare benefits.  BKD has a number of options for residents that give a choice of the amount of refundability of the upfront fee, the amount of entry fee for  the unit and the amount of health care benefit in the community’s various levels of care.  The non-refundable portion of the entrance fee is recorded as deferred revenue and amortized over the estimated stay of the resident based on an actuarial valuation.  The refundable portion of a resident’s entrance fee is generally refundable within a certain time period following  contract termination or in certain agreements, upon the resale of a comparable unit or 12 months after the resident vacates the unit and is not amortized.

Page 6 of 8

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of March 31, 2009

American Retirement Corporation ("ARC"), acquired in 2006, was active in the entrance fee CCRC business for many years and operated seven such communities.  Prior to the ARC acquisition, BKD acquired three entrance fee CCRC's from a non-profit, the National Benevolent Association, which were in bankruptcy.  BKD has been repositioning those communities by upgrading/renovating, expanding the campus or levels of care offered and changing the form of contract to include such items as life care and health benefits.

Quarterly Entrance Fee Amortization
($ in 000's)	Actual			Actual			Actual			Actual			Actual
		Q1 08			Q2 08			Q3 08			Q4 08			Q1 09
Original ARC Communities
Occupancy		91	%		89	%		88	%		89	%		88	%
Ending # EF Vacant Units		181			222			249			243			271
# EF Closings		29			46			52			48			29
# of EF Refunds		27			44			58			45			41
EF Resale Receipts		4,906			8,729			9,699			8,739			5,344
EF Refunds Paid		(1,823	)		(2,795	)		(4,320	)		(3,644	)		(3,855	)
Net Resale Cash Flow		3,083			5,934			5,379			5,095			1,489
Average EF Resale $ (excluding My Choice proceeds)	$	154		$	177		$	175		$	175		$	174
Average EF Refund $	$	(72	)	$	(65	)	$	(74	)	$	(81	)	$	(94	)
Total NBA Communities
Occupancy		76	%		75	%		75	%		76	%		76	%
Ending # EF Vacant Units		207			194			199			204			204
# EF Closings		11			32			15			17			19
# of EF Refunds (1)		20			25			37			22			28
EF Resale Receipts		1,366			3,868			1,827			3,338			3,166
EF Refunds Paid (1)		(1,809	)		(2,048	)		(1,536	)		(1,175	)		(1,981	)
Net Resale Cash Flow		(443	)		1,820			291			2,163			1,185
Average EF Resale $ (excluding My Choice proceeds)	$	124		$	114		$	122		$	189		$	163
Average EF Refund $	$	(90	)	$	(87	)	$	(42	)	$	(53	)	$	(71	)
Total Consolidated EF Communities
Occupancy		87	%		86	%		85	%		85	%		85	%
Ending # EF Vacant Units		388			416			448			447			475
# EF Closings		40			78			67			65			48
# of EF Refunds		47			69			95			67			69
EF Resale Receipts		6,272			12,597			11,526			12,077			8,510
EF Refunds Paid		(3,632	)		(4,843	)		(5,856	)		(4,819	)		(5,836	)
Net Resale Cash Flow		2,640			7,754			5,670			7,258			2,674
Average EF Resale $ (excluding My Choice proceeds)	$	146		$	151		$	163		$	179		$	170
Average EF Refund $	$	(77	)	$	(70	)	$	(62	)	$	(72	)	$	(85	)
(1)  Includes certain refunds accelerated for repositioning of the community

Page 7 of 8

Brookdale Senior Living Inc.

Quarterly Cash Flow Statements

As of March 31, 2009

($ in 000s)

Cash Flow Statements
		Q1 2008			Q2 2008			Q3 2008			Q4 2008		YTD 2008				Q1 2009
Cash Flows from Operating Activities
Net loss	$	(55,093	)	$	(3,485	)	$	(35,877	)	$	(278,786	)	$	(373,241	)	$	(13,636	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Non-cash portion of loss on extinguishment of debt		2,821			231			-			-			3,052			-
Depreciation and amortization		73,497			71,255			70,070			71,087			285,909			69,675
Goodwill and asset impairment		-			-			-			220,026			220,026			-
Gain on sale of assets		-			-			-			(2,131	)		(2,131	)		(4,455	)
Equity in (earnings) loss of unconsolidated ventures		173			935			(358	)		111			861			(595	)
Distributions received from JVs		190			1,182			546			1,834			3,752			11
Amortization of deferred gain		(1,085	)		(1,086	)		(1,086	)		(1,085	)		(4,342	)		(1,086	)
Amortization of entrance fees		(6,691	)		(5,129	)		(4,707	)		(5,498	)		(22,025	)		(5,110	)
Proceeds from deferred entrance fee revenue		2,780			5,177			7,253			7,391			22,601			4,872
Deferred income tax benefit		(30,662	)		(3,532	)		(23,049	)		(32,255	)		(89,498	)		(8,194	)
Change in deferred lease liability		5,751			5,215			4,709			4,910			20,585			4,248
Change in fair value of derivatives and amortization		45,633			(36,743	)		8,454			50,802			68,146			4,285
Non-cash stock-based compensation		8,010			8,621			6,737			5,569			28,937			6,809
Changes in operating assets and liabilities:
Accounts receivable, net		(6,392	)		(2,067	)		(9,706	)		(6,985	)		(25,150	)		(3,118	)
Prepaid expenses and other assets, net		2,515			12,164			(9,037	)		(18,306	)		(12,664	)		(4,602	)
Accounts payable and accrued expenses		(5,083	)		(11,080	)		19,214			12,377			15,428			4,966
Deferred revenue		3,081			(5,747	)		(726	)		1,206			(2,186	)		15,057
Tenant refundable fees and security deposits		1,184			184			(1,807	)		(854	)		(1,293	)		(370	)
Net cash provided by operating activities		40,629			36,095			30,630			29,413			136,767			68,757
Cash Flows from Investing Activities
Decrease in lease security deposits and lease acquisition deposits, net		1,763			109			544			1,065			3,481			1,480
Increase in cash and escrow deposits — restricted		(20,663	)		16,830			(3,962	)		(13,965	)		(21,760	)		(57,897	)
Additions to property, plant, and equipment and leasehold intangibles,net of related payables		(46,213	)		(41,455	)		(46,511	)		(54,849	)		(189,028	)		(33,491	)
Acquisition of assets, net of related payables and cash received		(745	)		(462	)		(3,898	)		(1,626	)		(6,731	)		-
Payment on (issuance of) notes receivable, net		10,112			29,549			-			(299	)		39,362			(36	)
Investment in unconsolidated ventures		(356	)		(137	)		(670	)		(1,616	)		(2,779	)		(1,106	)
Distributions received from unconsolidated ventures		-			154			146			3,616			3,916			525
Proceeds from sale of business		-			-			-			2,935			2,935			9,166
Proceeds from sale of unconsolidated venture		-			-			4,165			-			4,165			8,843
Net cash (used in) provided by investing activities		(56,102	)		4,588			(50,186	)		(64,739	)		(166,439	)		(72,516	)
Cash Flows from Financing Activities
Proceeds from debt		288,479			155,868			23,422			43,575			511,344			26,521
Repayment of debt and capital lease obligations		(181,327	)		(42,865	)		(5,018	)		(26,279	)		(255,489	)		(10,403	)
Buyout of capital lease obligation														-
Proceeds from line of credit		125,000			45,000			94,757			74,696			339,453			60,446
Repayment of line of credit		(120,000	)		(198,000	)		(60,000	)		-			(378,000	)		(64,899	)
Payment of dividends		(51,897	)		(25,955	)		(25,844	)		(25,759	)		(129,455	)		-
Purchase of treasury stock		-			(20,020	)		(9,167	)		-			(29,187	)		-
Payment of financing costs, net of related payables		(853	)		(12,571	)		(296	)		(572	)		(14,292	)		(6,895	)
Other		(403	)		(400	)		(1,075	)		(1,096	)		(2,974	)		(279	)
Refundable entrance fees:														-
Proceeds from refundable entrance fees		3,492			7,420			4,273			4,686			19,871			3,638
Refunds of entrance fees		(3,632	)		(4,843	)		(5,856	)		(4,819	)		(19,150	)		(5,836	)
Recouponing and payment of swap termination		(23,942	)		(3,180	)		-			(31,018	)		(58,140	)		-
Cash portion of loss on extinguishment of debt		(812	)		(231	)		(197	)		-			(1,240	)		-
Net cash (used in) provided by financing activities		34,105			(99,777	)		14,999			33,414			(17,259	)		2,293
Net increase (decrease) in cash and cash equivalents		18,632			(59,094	)		(4,557	)		(1,912	)		(46,931	)		(1,466	)
Cash and cash equivalents at beginning of period		100,904			119,536			60,442			55,885			100,904			53,973
Cash and cash equivalents at end of period	$	119,536		$	60,442		$	55,885		$	53,973		$	53,973		$	52,507

Page 8 of 8