EX-99.2 3 exhibit99_2.htm SUPPLEMENTAL INFORMATION Unassociated Document

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  

 
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