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 9, 2011 (May 9, 2011)

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 400, 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 9, 2011, Brookdale Senior Living Inc. (the “Company”) issued a press release announcing its first quarter 2011 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 2011 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 9, 2011
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 9, 2011	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 9, 2011.
99.2	Supplemental Information.

EX-99.1

FOR IMMEDIATE RELEASE

Contact:

Brookdale Senior Living Inc.

Ross Roadman  615-564-8104

Brookdale Announces First Quarter 2011 Results

Highlights

· Cash From Facility Operations (“CFFO”) was $61.8 million, a 13.5% increase from $54.4 million for the first quarter of 2010, or $0.51 per share for the first quarter of 2011 versus $0.46 per share for the first quarter of 2010.

· Average monthly revenue per unit improved by 5.1% to $4,609 from $4,386 for the first quarter of 2010.

· Average unit occupancy was 87.2%, a 60 basis point increase from the first quarter of 2010.

· Revenue increased over the first quarter of 2010 by $25.0 million, or 4.6%, to $569.4 million.

· Adjusted EBITDA improved over the first quarter of 2010 by $6.5 million, or 6.7%, to $102.8 million.

Nashville, TN.  May 9, 2011 – Brookdale Senior Living Inc. (NYSE: BKD) (the “Company”) today reported financial and operating results for the first quarter of 2011.

Bill Sheriff, Brookdale’s CEO, said, “Our first quarter results were in line with our expectations.  Despite bad weather, higher than normal resident attrition, a poor housing market, and federal budget uncertainty, we increased CFFO by 13.5% versus last year’s first quarter.  Our same community senior housing revenue per unit growth increased to 3.5% and outpatient therapy and home health revenue grew by 16%.  We continue to be comfortable with our projection metrics for the year with growth in revenue of 5% to 5.5% and expenses of 4% to 4.5%, such that CFFO per share will be in the $2.30 to $2.40 range.”

Mark Ohlendorf, Co-President and CFO of Brookdale, commented, “During the first quarter, we continued to execute our strategy to use positive cash flow to delever the Company’s balance sheet, while simultaneously creating financial flexibility to pursue opportunities as they arise. During the quarter, we expanded our credit line, used cash to pay off debt and unencumber assets, and completed acquisitions using internally generated cash on hand.  We have continued to strengthen our financial position with improving cash flow and are working aggressively to refinance our 2012 debt maturities in the near future.”

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Financial Results

Total revenue for the first quarter was $569.4 million, an increase of $25.0 million, or 4.6%, from the first quarter of 2010.  The increase in revenue was primarily driven by increases in occupancy and average monthly revenue per unit, including growing revenues from ancillary services.

Average monthly revenue per unit was $4,609 in the first quarter, an increase of $223, or 5.1%, over the first quarter of 2010.  Average occupancy for all consolidated communities for the first quarter of 2011 was 87.2%, an increase from 86.6% for the first quarter of 2010 and 30 basis points lower than the fourth quarter of 2010, consistent with historical seasonal patterns.

Facility operating expenses for the first quarter were $371.0 million, an increase of $15.6 million, or 4.4%, from the first quarter of 2010.  Operating contribution margin for the Company during the first quarter of 2011 was 34.7% versus 34.6% for the first quarter of 2010.

General and administrative expenses for the first quarter were $33.5 million, up from $32.0 million in the first quarter of 2010.  Excluding non-cash compensation expense from both periods, general and administrative expenses were $29.0 million in the first quarter of 2011 versus $27.1 million for the prior year same period.  Demonstrating the Company’s efficient platform, this was 4.8% of revenue (including revenues under management) in the first quarter of 2011.

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 communities.

For the quarter ended March 31, 2011, Facility Operating Income was $191.3 million, an increase of $9.4 million, or 5.1%, from the first quarter of 2010, and Adjusted EBITDA was $102.8 million, an increase of $6.5 million, or 6.7%, over the first quarter of 2010.

Cash From Facility Operations was $61.8 million for the first quarter of 2011, or $0.51 per share, an increase of $7.4 million, or 13.5%, from CFFO of $54.4 million, or $0.46 per share, for the first quarter of 2010.

Net loss for the first quarter of 2011 was $(12.3) million, or $(0.10) per diluted common share. The loss for the quarter includes non-cash items for depreciation and amortization, asset impairment, non-cash stock-based compensation expense and straight-line lease expense, net of deferred gain amortization.

Operating Activities

For the quarter ended March 31, 2011, same community revenues grew 4.5% over the same period in 2010 as revenue per unit increased by 4.5% and occupancy increased by 10 basis points.  Same community Facility Operating Income for the quarter increased by 3.7% when compared to the first quarter of 2010.

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The same community results for senior housing, excluding ancillary services, for the three months ended March 31, 2011 showed revenues grew 3.6% over the corresponding period in 2010 as revenue per unit increased by 3.5% and occupancy increased by 0.1%. Same community Facility Operating Income for senior housing (excluding ancillary services) increased by 3.1% over the first quarter of 2010.

By the end of the first quarter, the Company’s ancillary services programs provided therapy services to over 38,000 Brookdale units.  At the end of the quarter, the Company’s home health agencies were serving over 27,000 units across the total consolidated Brookdale portfolio, up from approximately 22,000 units served a year ago.  Outpatient therapy and home health services produced $156 of monthly Facility Operating Income per occupied unit in the first quarter across all units served, up from $154 per month a year ago.  The Company continues to exceed its target of $150 of monthly Facility Operating Income per occupied unit from ancillary services even after the effect of Medicare rate cuts that became effective January 1, 2011.

Balance Sheet

Brookdale had $36.7 million of unrestricted cash and cash equivalents and $92.4 million of restricted cash on its balance sheet at the end of the first quarter.

As of March 31, 2011, the Company had a $230.0 million secured line of credit, which was amended and expanded during the first quarter, and separate secured and unsecured letter of credit facilities of up to $82.5 million in the aggregate.  As of March 31, 2011, there were no borrowings under the revolving loan facility and $71.9 million of letters of credit had been issued under the letter of credit facilities.

The Company currently has no mortgage debt maturities before 2012 other than periodic, scheduled principal payments.

During the quarter, the Company received approval from the state of Florida to release the escrow of entrance fees received related to its Freedom Pointe at the Villages community and subsequently reduced the outstanding balance on the associated mortgage debt, which has a 2013 maturity date, by $37.9 million.  Additionally, during the quarter the Company repaid $48.7 million of outstanding mortgage debt and the related assets were moved into the credit line borrowing base.

Acquisitions/Divestitures

As previously announced, during the first quarter of 2011, the Company acquired 12 assisted living communities that were previously leased for an aggregate purchase price of $31.3 million.   Also, during the quarter the Company acquired two assisted living communities, one of which the Company previously leased, for an aggregate purchase price of approximately $19.0 million.  Both transactions were funded from cash on hand.

During the quarter ended March 31, 2011, the Company purchased two home health agencies for an aggregate purchase price of approximately $1.0 million.  The entire purchase price of the

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acquisitions has been ascribed to an indefinite useful life intangible and recorded on the consolidated balance sheet under other intangible assets, net.

The Company recorded an asset impairment charge of $14.8 million for the first quarter related to four communities. The Company sold one of those communities during the quarter, a Retirement Center with a total of 113 units, and anticipates disposing of the other three communities during 2011.  Additionally, the Company sold an assisted living community with a total of 84 units during the first quarter, recognizing a gain of $1.3 million.

2011 Outlook

For the full year 2011, the Company expects Cash From Facility Operations to range between $2.30 and $2.40 per share.  These estimates do not include the impact on operating results from possible future acquisitions or dispositions.

Supplemental Information

The Company will shortly post on the Investor Relations section of the Company’s website at www.brookdaleliving.com supplemental information relating to the Company’s first quarter results.  This information will also be furnished in a Form 8-K to be filed with the SEC.

Earnings Conference Call

Brookdale’s management will conduct a conference call on Tuesday, May 10, 2011 to review the financial results of its first quarter ended March 31, 2011.  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) 900-2996 (from within the U.S.) or (706) 643-2685 (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 17, 2011 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.) and referencing access code “63406788.”  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

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continuing care retirement centers, with 558 communities in 33 states and the ability to serve over 51,000 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, cash flow, expense levels, the demand for senior housing, expansion and development activity, acquisition opportunities, asset dispositions and taxes; 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 (including the timing thereof); our expectations regarding changes in government reimbursement programs and their effect on our results; our plans to generate growth 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, home health and hospice); our plans to expand, redevelop and reposition existing communities; our plans to acquire additional communities, asset portfolios, operating companies and home health agencies; the expected project costs for our expansion, redevelopment and repositioning program; our expected levels of expenditures and reimbursements (and the timing 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 (including our credit and letter of credit facilities) as 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

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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 the performance of certain of our counterparties’ obligations; changes in governmental reimbursement programs; our ability to effectively manage our growth; our ability to maintain consistent quality control; delays in obtaining regulatory approvals; our ability to complete acquisitions and integrate them 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 and Quarterly Reports on Form 10-Q.  When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings.  Readers are 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,
	2011			2010
Revenue
Resident fees	$	568,035		$	543,029
Management fees		1,405			1,395
Total revenue		569,440			544,424
Expense
Facility operating expense (excluding depreciation and amortization of $51,065 and $52,033, respectively)		370,954			355,324
General and administrative expense (including non-cash stock-based compensation expense of $4,540 and $4,871, respectively)		33,543			31,952
Facility lease expense		66,315			68,249
Depreciation and amortization		71,782			73,061
Asset impairment		14,846			-
Total operating expense		557,440			528,586
Income from operations		12,000			15,838
Interest income		625			627
Interest expense:
Debt		(31,561	)		(33,280	)
Amortization of deferred financing costs and debt discount		(2,704	)		(2,596	)
Change in fair value of derivatives and amortization		(8	)		(2,640	)
Loss on extinguishment of debt, net		(2,894	)		(19	)
Equity in earnings of unconsolidated ventures		266			397
Other non-operating income		817			-
Loss before income taxes		(23,459	)		(21,673	)
Benefit for income taxes		11,154			7,378
Net loss	$	(12,305	)	$	(14,295	)
Basic and diluted loss per share	$	(0.10	)	$	(0.12	)
Weighted average shares used in computing basic and diluted net loss per share		120,792			119,315

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Condensed Consolidated Balance Sheets

(in thousands)

	March 31, 2011		December 31, 2010
	(unaudited)
Cash and cash equivalents	$	36,732	$	81,827
Cash and escrow deposits - restricted		47,502		81,558
Accounts receivable, net		87,841		88,033
Other current assets		82,178		76,691
Total current assets		254,253		328,109
Property, plant, and equipment and leasehold intangibles, net		3,716,650		3,736,842
Other assets, net		460,365		465,519
Total assets	$	4,431,268	$	4,530,470
Current liabilities	$	726,733	$	606,358
Long-term debt, less current portion		2,292,887		2,498,620
Other liabilities		358,889		365,495
Total liabilities		3,378,509		3,470,473
Stockholders’ equity		1,052,759		1,059,997
Total liabilities and stockholders’ equity	$	4,431,268	$	4,530,470

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Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Three Months Ended March 31,
	2011			2010
Cash Flows from Operating Activities
Net loss	$	(12,305	)	$	(14,295	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on extinguishment of debt		2,894			19
Depreciation and amortization		74,486			75,657
Asset impairment		14,846			-
(Gain) loss on sale of assets		(1,315	)		144
Equity in earnings of unconsolidated ventures		(266	)		(397	)
Amortization of deferred gain		(1,093	)		(1,086	)
Amortization of entrance fees		(5,762	)		(5,739	)
Proceeds from deferred entrance fee revenue		6,361			9,550
Deferred income tax benefit		(11,841	)		(8,200	)
Change in deferred lease liability		1,726			3,136
Change in fair value of derivatives and amortization		8			2,640
Non-cash stock-based compensation		4,540			4,871
Changes in operating assets and liabilities:
Accounts receivable, net		(105	)		(7,073	)
Prepaid expenses and other assets, net		(7,104	)		(4,429	)
Accounts payable and accrued expenses		8,453			(11,825	)
Tenant refundable fees and security deposits		310			(1,298	)
Deferred revenue		11,269			8,365
Other		7,564			(2,911	)
Net cash provided by operating activities		92,666			47,129
Cash Flows from Investing Activities
Decrease in lease security deposits and lease acquisition deposits, net		941			801
Decrease (increase) in cash and escrow deposits — restricted		54,455			(30,556	)
Purchase of marketable securities — restricted		(26,409	)		-
Sale of marketable securities — restricted		809			-
Additions to property, plant, and equipment and leasehold intangibles, net of related payables		(28,589	)		(23,102	)
Acquisition of assets, net of related payables and cash received		(51,330	)		-
Payment on notes receivable, net		403			512
Investment in unconsolidated ventures		-			(848	)
Distributions received from unconsolidated ventures		60			47
Proceeds from sale of assets		23,147			1,487
Other		(164	)		(316	)
Net cash used in investing activities		(26,677	)		(51,975	)
Cash Flows from Financing Activities
Proceeds from debt		28,000			49,108
Repayment of debt and capital lease obligations		(134,550	)		(58,923	)
Proceeds from line of credit		40,000			45,000
Repayment of line of credit		(40,000	)		(30,000	)
Payment of financing costs, net of related payables		(2,575	)		(2,776	)
Other		(184	)		(181	)
Refundable entrance fees:
Proceeds from refundable entrance fees		6,080			8,442
Refunds of entrance fees		(4,930	)		(5,762	)
Cash portion of loss on extinguishment of debt		(2,861	)		(179	)
Recouponing and payment of swap termination		(64	)		(640	)
Net cash (used in) provided by financing activities		(111,084	)		4,089
Net decrease in cash and cash equivalents		(45,095	)		(757	)
Cash and cash equivalents at beginning of period		81,827			66,370
Cash and cash equivalents at end of period	$	36,732		$	65,613

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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) expense items, (gain) loss on sale of communities (including facility lease termination expense), depreciation and amortization (including non-cash impairment charges), straight-line lease expense (income), amortization of deferred gain, amortization of deferred entrance fees, non-cash stock-based compensation expense, and change in future service obligation and including entrance fee receipts and refunds (excluding first generation entrance fee receipts on a newly opened entrance fee CCRC).

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, 2011 and 2010 (in thousands):

	Three Months Ended March 31,
	2011			2010
Net loss	$	(12,305	)	$	(14,295	)
Benefit for income taxes		(11,154	)		(7,378	)
Equity in earnings of unconsolidated ventures		(266	)		(397	)
Loss on extinguishment of debt, net		2,894			19
Other non-operating income		(817	)		-
Interest expense:
Debt		23,553			25,634
Capitalized lease obligation		8,008			7,646
Amortization of deferred financing costs and debt discount		2,704			2,596
Change in fair value of derivatives and amortization		8			2,640
Interest income		(625	)		(627	)
Income from operations		12,000			15,838
Depreciation and amortization		71,782			73,061
Asset impairment		14,846			-
Straight-line lease expense		1,726			3,136
Amortization of deferred gain		(1,093	)		(1,086	)
Amortization of entrance fees		(5,762	)		(5,739	)
Non-cash stock-based compensation expense		4,540			4,871
Entrance fee receipts(1)		12,441			17,992
First generation entrance fees received (2)		(2,729	)		(5,971	)
Entrance fee disbursements		(4,930	)		(5,762	)
Adjusted EBITDA	$	102,821		$	96,340

(1) Includes the receipt of refundable and non-refundable entrance fees.

(2) First generation entrance fees received represents initial entrance fees received from the sale of units at a newly opened entrance fee CCRC. 

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, first generation entrance fee receipts on a newly opened entrance fee CCRC, entrance fee refunds disbursed, lease financing debt amortization with fair market value or no purchase options, facility lease termination expense, recurring capital expenditures, distributions from unconsolidated ventures from cumulative share of net earnings, CFFO from unconsolidated ventures, and other.  Recurring capital expenditures include routine expenditures capitalized in accordance with GAAP that are funded from current operations.  Amounts excluded from recurring capital expenditures consist primarily of major projects, renovations, community repositionings, expansions, systems projects or other non-recurring or unusual capital items (including integration capital expenditures) or community purchases that are funded using lease

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or financing proceeds, available cash and/or proceeds from the sale of communities that are held for sale.

In the fourth quarter of 2010, we revised the definition of Cash From Facility Operations to exclude distributions from unconsolidated ventures from cumulative share of net earnings and include our proportionate share (based on equity ownership percentages) of the Cash From Facility Operations generated by our unconsolidated ventures.   This impact is included in the Cash From Facility Operations for the three months ended March 31, 2011.  Due to immateriality, the prior period has not been restated.

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.

· 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, 2011 and 2010 (in thousands):

	Three Months Ended March 31,
	2011			2010
Net cash provided by operating activities	$	92,666		$	47,129
Changes in operating assets and liabilities		(20,387	)		19,171
Refundable entrance fees received(1)		6,080			8,442
First generation entrance fees received (2)		(2,729	)		(5,971	)
Entrance fee refunds disbursed		(4,930	)		(5,762	)
Recurring capital expenditures, net		(7,057	)		(6,441	)
Lease financing debt amortization with fair market value or no purchase options		(2,533	)		(2,171	)
Cash From Facility Operations from unconsolidated ventures		641			-
Cash From Facility Operations	$	61,751		$	54,397

(1) Total entrance fee receipts for the three months ended March 31, 2011 and 2010 were $12.4 million and $18.0 million, respectively, including $6.4 million and $9.6 million, respectively, of non-refundable entrance fee receipts included in net cash provided by operating activities.

(2) First generation entrance fees received represents initial entrance fees received from the sale of units at a newly opened entrance fee CCRC.

The calculation of CFFO per share is based on weighted average outstanding common shares for the period, excluding any unvested restricted shares.  Annual CFFO per share for all periods is calculated as the sum of the quarterly amounts for the year.

Page 12 of 13

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) expense items, (gain) loss on sale of communities (including facility lease termination expense), depreciation and amortization (including non-cash impairment charges), facility lease expense, general and administrative expense, including non-cash stock-based compensation expense, change in future service obligation, 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.

The table below reconciles Facility Operating Income from net loss for the three months ended March 31, 2011 and 2010 (in thousands):

	Three Months Ended March 31,
	2011			2010
Net loss	$	(12,305	)	$	(14,295	)
Benefit for income taxes		(11,154	)		(7,378	)
Equity in earnings of unconsolidated ventures		(266	)		(397	)
Loss on extinguishment of debt, net		2,894			19
Other non-operating income		(817	)		-
Interest expense:
Debt		23,553			25,634
Capitalized lease obligation		8,008			7,646
Amortization of deferred financing costs and debt discount		2,704			2,596
Change in fair value of derivatives and amortization		8			2,640
Interest income		(625	)		(627	)
Income from operations		12,000			15,838
Depreciation and amortization		71,782			73,061
Asset impairment		14,846			-
Facility lease expense		66,315			68,249
General and administrative (including non-cash stock-based compensation expense)		33,543			31,952
Amortization of entrance fees		(5,762	)		(5,739	)
Management fees		(1,405	)		(1,395	)
Facility Operating Income	$	191,319		$	181,966

Page 13 of 13

EX-99.2

Brookdale Senior Living Inc.

Corporate Overview - selected financial information

As of March 31, 2011

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.  As of March 31, 2011, the Company owns and operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 558 communities in 33 states and the ability to serve over 51,000 residents.

Stock Listing

Common Stock

NYSE: BKD

Community Information

Ownership Type	Number of Facilities	Number of Units	Percentage of Q1 2011 Revenues	Percentage of Q1 2011 Facility Operating Income
Owned	201	20,885	44.4%	42.5%
Leased	338	26,493	55.4%	56.8%
Managed	19	3,784	0.2%	0.7%
Total	558	51,162	100.0%	100.0%
Operating Type
Retirement Centers	75	14,199	22.6%	26.3%
Assisted Living	428	21,177	46.6%	46.9%
CCRCs	36	12,002	30.6%	26.1%
Managed	19	3,784	0.2%	0.7%
Total	558	51,162	100.0%	100.0%

CFFO Per Share ($)

($ except where indicated)	FY 2010										FY 2011
		Q1		Q2		Q3		Q4	Full Year(1)			Q1
Reported CFFO	$	0.46	$	0.48	$	0.50	$	0.58	$	2.02	$	0.51
Weighted Average Shares		119,315		119,721		120,404		120,580				120,792
(1) Annual CFFO for all periods is calculated as the sum of the quarterly amounts for the year.

Investor Relations

Ross Roadman

SVP, Investor Relations

Brookdale Senior Living Inc.

111 Westwood Place, Suite 400

Brentwood, TN 37027

Phone (615) 564-8104

rroadman@brookdaleliving.com

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

Brookdale Senior Living Inc.

Operating Segment Information

As of March 31, 2011

Average Occupancy and Rates based on Average Occupied Units in the Period

	FY 2010															FY 2011
		Q1			Q2			Q3			Q4		Full Year				Q1
Retirement Centers
Number of communities (period end)		80			80			80			78			78			75
Total average units(1)		14,737			14,737			14,734			14,594			14,700			14,104
Weighted average unit occupancy		87.0	%		87.1	%		87.4	%		87.4	%		87.2	%		87.3	%
Average monthly revenue per unit(2)	$	3,419		$	3,434		$	3,461		$	3,467		$	3,445		$	3,482
Assisted Living
Number of communities (period end)		429			429			429			427			427			428
Total average units(1)		21,152			21,115			21,114			21,056			21,109			21,295
Weighted average unit occupancy		87.6	%		88.0	%		89.0	%		89.0	%		88.4	%		88.2	%
Average monthly revenue per unit(2)	$	4,526		$	4,571		$	4,606		$	4,589		$	4,573		$	4,705
CCRCs
Number of communities (period end)		36			36			36			35			35			36
Total average units(1)		11,287			11,276			11,269			11,264			11,274			11,211
Weighted average unit occupancy		84.0	%		84.2	%		84.4	%		84.7	%		84.3	%		85.3	%
Average monthly revenue per unit(2)	$	5,421		$	5,437		$	5,509		$	5,699		$	5,517		$	5,873
Consolidated Totals
Number of communities (period end)		545			545			545			540			540			539
Total average units(1)		47,176			47,128			47,117			46,914			47,083			46,610
Weighted average unit occupancy		86.6	%		86.8	%		87.4	%		87.5	%		87.1	%		87.2	%
Average monthly revenue per unit(2)	$	4,386		$	4,415		$	4,457		$	4,498		$	4,439		$	4,609
Management Services
Number of communities (period end)		19			19			19			19			19			19
Total average units(1)		3,788			3,788			3,786			3,786			3,787			3,784
Weighted average occupancy		83.4	%		83.5	%		83.7	%		84.5	%		83.8	%		84.7	%

(1)	Total average units operated represent the average units operated during the period, excluding equity homes.
(2)	Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees, divided by average occupied units.

Brookdale Senior Living Inc.

Same Community, Capital Expenditure and ISC Information

As of March 31, 2011

Same Community Information

($ in 000s, except Avg. Mo. Revenue/Unit)

	Three Months Ended March 31,
	2011			2010			% Change
Revenue	$	543,765		$	520,107			4.5	%
Operating Expense		356,957			340,013			5.0	%
Facility Operating Income	$	186,808		$	180,094			3.7	%
Facility Operating Margin		34.4	%		34.6	%		-0.2	%
# Communities		534			534
Avg. Period Occupancy		87.4	%		87.3	%		0.1	%
Avg. Mo. Revenue/Unit	$	4,565		$	4,370			4.5	%

Schedule of Capital Expenditures
($ in 000s)
	Three Months Ended March 31,
	2011			2010
Type
Recurring	$	7,882		$	7,112
Reimbursements		(825	)		(671	)
Net Recurring		7,057			6,441
Corporate (1)		4,798			2,664
EBITDA-enhancing / Major Projects (2)		14,286			6,158
Program Max / Development, net (3)		1,623			1,662
Net Total Capital Expenditures (4)	$	27,764		$	16,925

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

(2)  Includes EBITDA-enhancing projects (primarily community renovations and apartment upgrades) and other major building infrastructure projects.

(3)  Includes community expansions and major repositioning or upgrade projects.  Also includes de novo community developments. Amounts shown are amounts invested, net of third party lender or lessor funding received of $5.5 million for the three months ended March 31, 2010.  No lender or lessor funding was received for the three months ended March 31, 2011.

(4)  Approximately $9.5 million and $7.4 million of expense was recognized during the three months ended March 31, 2011 and 2010, respectively, for normal repairs and maintenance and capital spend under $1,500 per invoice, except for unit turnovers.

Information on Ancillary Services
	Three Months Ended March 31,
	2011		2010
Brookdale Units Served:
Therapy		38,435		37,226
Home Health		27,277		22,007
Avg. Mo. NOI/Occupied Unit:
Total, including Skilled Nursing	$	233	$	244
Outpatient Therapy and Home Health Only	$	156	$	154

Brookdale Senior Living Inc.

Capital Structure - selected financial information

As of March 31, 2011

($ 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
2011	$	12,784		5.58	%	$	-		$	12,784		5.58	%	$	17,321		8.37	%	$	30,105
2012		642,211		2.45	%		-			642,211		2.45	%		27,239		8.34	%		669,450
2013		668,308		4.15	%		-			668,308		4.15	%		29,154		8.40	%		697,462
2014		148,916		5.86	%		-			148,916		5.86	%		30,968		8.44	%		179,884
2015		38,581		6.25	%		-			38,581		6.25	%		32,889		8.48	%		71,470
Thereafter		587,897		5.28	%		-			587,897		5.28	%		228,019		8.71	%		815,916
Total	$	2,098,697		4.12	%	$	-		$	2,098,697		4.12	%	$	365,590		8.60	%	$	2,464,287
	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
2011	$	12,784		5.58	%	$	-		$	12,784		5.58	%	$	17,321		8.37	%	$	30,105
2012		642,211		2.45	%		-			642,211		2.45	%		25,772		8.39	%		667,983
2013		542,958		3.86	%		-			542,958		3.86	%		29,154		8.40	%		572,112
2014		8,916		6.22	%		-			8,916		6.22	%		30,968		8.44	%		39,884
2015		178,581		5.93	%		-			178,581		5.93	%		32,889		8.48	%		211,470
Thereafter		713,247		5.30	%		-			713,247		5.30	%		229,486		8.70	%		942,733
Total	$	2,098,697		4.12	%	$	-		$	2,098,697		4.12	%	$	365,590		8.60	%	$	2,464,287

Coverage Ratios

	Three months ended March 31, 2011
							Interest/Cash Lease
	Units		FOI		Adj. FOI **		Payments		Coverage
Owned Communities		20,885	$	84,339	$	69,873	$	23,553		3.0	x
Leased Communities *		26,493	$	112,741	$	94,660	$	73,690		1.3	x
* The leased communities include the capital leases.
** Adjusted for 5% management fee and capital expenditures @ $350/unit.

Debt Amortization

	Three months ended March 31,
	2011		2010
Scheduled Debt Amortization	$	3,787	$	1,719
Lease Financing Debt Amortization - FMV or no Purchase Option (4)		2,533		2,171
Lease Financing Debt Amortization - Bargain Purchase Option		3,054		2,781
Total Debt Amortization	$	9,374	$	6,671

Line Availability

($000s)		03/31/10		06/30/10		09/30/10		12/31/10		03/31/11
Ending Line Balance	$	15,000	$	-	$	-	$	-	$	-
Cash and cash equivalents		65,613		51,345		68,961		81,827		36,732
Total Line Capacity (7)		100,000		120,000		120,000		120,000		230,000
Total Liquidity (Line Capacity + Cash)	$	150,613	$	171,345	$	188,961	$	201,827	$	266,732
Total letters of credit outstanding	$	66,874	$	69,222	$	72,690	$	72,012	$	71,878

Leverage Ratios

				Annualized
	Balance			Leverage
Mortgage Debt (1)	$	2,098,697
Capital Leases		365,590
Total Property-Level Debt	$	2,464,287			6.0	x
Plus: Line of Credit (cash borrowings)		-
Less: Unrestricted Cash		(36,732	)
Less: Cash held as collateral against existing debt		(4,285	)
Total Debt	$	2,423,270			5.9	x
2011 YTD annualized Adjusted EBITDA	$	411,284
Annual Cash Lease Expense multiplied by 8		2,101,824
Total Adjusted Debt	$	4,525,094			6.7	x
2011 YTD annualized Adjusted EBITDAR	$	674,012

Debt Structure

			weighted
	Balance		rate (2)
Fixed Rate Mortgage Debt	$	1,149,667		5.88	%
Variable Rate Mortgage Debt (1)		949,030		1.98	%
Capital Leases		365,590		8.60	%
Line of Credit (cash borrowings)		-		0.00	%
Total Debt	$	2,464,287
	Balance		% of total
Variable Rate debt with Interest Rate Swaps (5)	$	150,000		15.8	%
Variable Rate debt with Interest Rate Caps (1) (6)		799,029		84.2	%
Variable Rate debt - Unhedged		-		0.0	%
Total Variable Rate Mortgage Debt	$	949,030		100.0	%

(1) Also includes both bond and discount mortgage backed security 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.

(4) Payments are included in CFFO.

(5) Weighted swap rate for stated reporting period is 0.87%.

(6) Weighted cap rate for stated reporting period of 5.92% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.

(7) The availability under the line may vary from time to time as it is based on borrowing base calculations related to the value and performance of the communities securing the facility.

Brookdale Senior Living Inc.

CFFO Reconciliation

As of March 31, 2011

CFFO Calculation

($ in 000s)

	Three Months Ended March 31,
	2011			2010
Net cash provided by operating activities (includes non-refundable entrance fees)	$	92,666		$	47,129
Changes in operating assets and liabilities (eliminates cash flow effect)		(20,387	)		19,171
Add: Refundable entrance fees received		6,080			8,442
Less: Entrance fee refunds disbursed		(4,930	)		(5,762	)
Less: First generation entrance fees received		(2,729	)		(5,971	)
Less: Recurring capital expenditures, net		(7,057	)		(6,441	)
Less: Lease financing debt amortization with fair market value or no purchase options		(2,533	)		(2,171	)
Add: Cash From Facility Operations from unconsolidated ventures		641			-

Cash From Facility Operations $ 61,751 $ 54,397

Revenue Reconciliation

($ in 000s except average monthly revenue per quarter)	FY 2010															FY 2011
		Q1			Q2			Q3			Q4		Full Year				Q1
Revenue reconciliation excl. entrance fee amortization
Average monthly revenue per quarter		4,386			4,415			4,457			4,498			4,439			4,609
Average monthly units (excluding equity homes) available		47,179			47,119			47,106			46,897			47,057			11,659
Average occupancy for the quarter		86.6	%		86.8	%		87.4	%		87.5	%		87.1	%		87.2	%
Resident fee revenue	$	537,290		$	541,773		$	550,491		$	553,722		$	2,183,276		$	562,273
Add:  management fee revenue		1,395			1,412			1,339			1,445			5,591			1,405
Total revenues excluding entrance fee amortization	$	538,685		$	543,185		$	551,830		$	555,167		$	2,188,867		$	563,678

CFFO Reconciliation to the Income Statement

Resident fee revenue	$	544,424		$	548,972		$	558,464		$	561,404		$	2,213,264		$	569,440
Less:  Entrance fee amortization		(5,739	)		(5,787	)		(6,634	)		(6,237	)		(24,397	)		(5,762	)
Adjusted revenues		538,685			543,185			551,830			555,167			2,188,867			563,678
Less: Facility operating expenses		(355,324	)		(353,051	)		(368,936	)		(357,321	)		(1,434,632	)		(370,954	)
Add: Loss (gain) on sale of communites, net		-			-			-			(3,298	)		(3,298	)		-
Add: Change in future service obligation		-			(1,064	)		-			-			(1,064	)		-
		(355,324	)		(354,115	)		(368,936	)		(360,619	)		(1,438,994	)		(370,954	)
Less:  G&A including non-cash stock expense		(31,952	)		(31,834	)		(33,231	)		(34,692	)		(131,709	)		(33,543	)
Add:  G&A non-cash stock expense		4,871			5,105			5,823			4,960			20,759			4,540
Net G&A		(27,081	)		(26,729	)		(27,408	)		(29,732	)		(110,950	)		(29,003	)
Less: Facility lease expense		(68,249	)		(67,175	)		(72,706	)		(67,383	)		(275,513	)		(66,315	)
Add: Facility lease termination expense (gain)		-			-			4,616			(8	)		4,608			-
Add:  Straight-line lease expense		3,136			2,161			2,812			2,412			10,521			1,726
Less: Amortization of deferred gain		(1,086	)		(1,086	)		(1,086	)		(1,085	)		(4,343	)		(1,093	)
Net lease expense		(66,199	)		(66,100	)		(66,364	)		(66,064	)		(264,727	)		(65,682	)
Add: Entrance fee receipts		12,021			9,377			19,133			14,827			55,358			9,712
Less: Entrance fee disbursements		(5,762	)		(5,360	)		(4,984	)		(4,954	)		(21,060	)		(4,930	)
Net entrance fees		6,259			4,017			14,149			9,873			34,298			4,782
Adjusted EBITDA		96,340			100,258			103,271			108,625			408,494			102,821
Less:  Recurring capital expenditures, net		(6,441	)		(7,570	)		(7,572	)		(6,386	)		(27,969	)		(7,057	)
Less:  Interest expense, net		(32,653	)		(33,450	)		(32,916	)		(31,384	)		(130,403	)		(30,936	)
Less:  Lease financing debt amortization with fair market value or no purchase options		(2,171	)		(2,221	)		(2,267	)		(2,313	)		(8,972	)		(2,533	)
Less: Distributions from unconsolidated ventures from cumulative share of net earnings		-			-			-			(775	)		(775	)		-
Add: Cash From Facility Operations from unconsolidated ventures		-			-			-			2,050			2,050			641
Less:  Other		(678	)		(39	)		(830	)		(206	)		(1,753	)		(1,185	)
Reported CFFO	$	54,397		$	56,978		$	59,686		$	69,611		$	240,672		$	61,751

CFFO Per Share ($)

($ except where indicated)	FY 2010										FY 2011
		Q1		Q2		Q3		Q4	Full Year(1)			Q1
Reported CFFO	$	0.46	$	0.48	$	0.50	$	0.58	$	2.02	$	0.51
Shares used in calculation of CFFO (000's)		119,315		119,721		120,404		120,580				120,792

(1) Annual CFFO for all periods is calculated as the sum of the quarterly amounts for the year.

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 consolidated financial statements, included in the accompanying earnings release.

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of March 31, 2011

	Q1 10		Q2 10		Q3 10		Q4 10		Q1 11
Occupancy	81.8	%	81.3	%	81.3	%	82.0	%	82.6	%
Ending # EF Vacant Units	547		569		594		588		594
# Closings	67		59		87		73		53
# of Refunds	80		67		81		82		69
Cash Basis ($ in 000's except average resale and refund)
Resale Receipts:
Proceeds from non-refundable entrance fees (1)(2)	6,883		5,566		8,098		6,709		4,918
Proceeds from refundable entrance fees (2)(3)	5,138		3,811		11,035		8,118		4,794
Total Cash Proceeds	12,021		9,377		19,133		14,827		9,712
Refunds of entrance fees (4)	(5,762	)	(5,360	)	(4,984	)	(4,954	)	(4,930	)
Net Resale Cash Flow	6,259		4,017		14,149		9,873		4,782
My Choice proceeds included in refundable resale receipts above	132		206		6,463		3,789		1,144
Average Resale $ (excluding My Choice proceeds)	177,448		155,441		145,632		151,205		161,660
Average Refund $ (excluding My Choice refunds)	(68,375	)	(78,209	)	(61,383	)	(55,378	)	(70,058	)

Notes:

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

(2) Excludes first generation entrance fees received

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

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

Value of Unsold Inventory ($ in 000's except average resale price)
Gross Value @ Average Resale Price of $170,000 (2)	100,980
Refund Attachments	(11,593	)
Net Cash Value	89,387

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 10		Q2 10		Q3 10		Q4 10		Q1 11
Amortization of entrance fees (incl. gains on terminations) (5)	(5,426	)	(5,404	)	(6,173	)	(5,765	)	(5,204	)
(5) Excludes first generation entrance fee amortization

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.

Brookdale Senior Living Inc.

Quarterly Cash Flow Statements

As of March 31, 2011

($ in 000s)

Cash Flow Statements

		Q1 2010			Q2 2010			Q3 2010			Q4 2010		FY 2010				Q1 2011
Cash Flows from Operating Activities
Net loss	$	(14,295	)	$	(9,557	)	$	(16,913	)	$	(8,136	)	$	(48,901	)	$	(12,305	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on extinguishment of debt		19			682			856			-			1,557			2,894
Depreciation and amortization		75,657			75,578			77,195			72,874			301,304			74,486
Asset impairment		-			-			-			13,075			13,075			14,846
Equity in (earnings) loss of unconsolidated ventures		(397	)		(119	)		(272	)		620			(168	)		(266	)
Distributions from unconsolidated ventures from cumulative share of net earnings		-			375			-			400			775			-
Amortization of deferred gain		(1,086	)		(1,086	)		(1,086	)		(1,085	)		(4,343	)		(1,093	)
Amortization of entrance fees		(5,739	)		(5,787	)		(6,634	)		(6,237	)		(24,397	)		(5,762	)
Proceeds from deferred entrance fee revenue		9,550			8,354			9,812			9,770			37,486			6,361
Deferred income tax benefit		(8,200	)		(5,743	)		(12,601	)		(6,751	)		(33,295	)		(11,841	)
Change in deferred lease liability		3,136			2,161			2,812			2,412			10,521			1,726
Change in fair value of derivatives and amortization		2,640			2,207			176			(905	)		4,118			8
Loss (gain) on sale of assets		144			-			1,404			(4,057	)		(2,509	)		(1,315	)
Change in future service obligation		-			(1,064	)		-			-			(1,064	)		-
Non-cash stock-based compensation		4,871			5,105			5,823			4,960			20,759			4,540
Changes in operating assets and liabilities:
Accounts receivable, net		(5,242	)		4,367			(5,605	)		(1,476	)		(7,956	)		(105	)
Prepaid expenses and other assets, net		(9,171	)		(5,160	)		(1,008	)		(6,711	)		(22,050	)		460
Accounts payable and accrued expenses		(11,825	)		2,035			15,511			(17,496	)		(11,775	)		8,453
Tenant refundable fees and security deposits		(1,298	)		(971	)		(451	)		(438	)		(3,158	)		310
Deferred revenue		8,365			(3,735	)		(4,635	)		(1,730	)		(1,735	)		11,269
Net cash provided by operating activities		47,129			67,642			64,384			49,089			228,244			92,666
Cash Flows from Investing Activities
Decrease (increase) in lease security deposits and lease acquisition deposits, net		801			-			1,266			(4,242	)		(2,175	)		941
(Increase) decrease in cash and escrow deposits — restricted		(30,556	)		(5,804	)		33,793			7,272			4,705			54,455
Purchase of marketable securities — restricted		-			-			-			-			-			(26,409	)
Sale of marketable securities — restricted		-			-			-			-			-			809
Additions to property, plant, and equipment and leasehold intangibles, net of related payables		(23,102	)		(22,408	)		(25,094	)		(23,077	)		(93,681	)		(28,589	)
Acquisition of assets, net of related payables and cash received		-			(21,809	)		(4,307	)		(31,832	)		(57,948	)		(51,330	)
Payment on (issuance of) notes receivable, net		512			(343	)		844			66			1,079			403
Investment in unconsolidated ventures		(848	)		(205	)		394			(1	)		(660	)		-
Distributions received from unconsolidated ventures		47			-			30			20			97			60
Proceeds from sale of unconsolidated venture		-			-			675			-			675			-
Proceeds from sale of assets		1,487			-			-			10,592			12,079			23,147
Other		(316	)		-			(322	)		(38	)		(676	)		(164	)
Net cash (used in) provided by investing activities		(51,975	)		(50,569	)		7,279			(41,240	)		(136,505	)		(26,677	)
Cash Flows from Financing Activities
Proceeds from debt		49,108			119,576			213,392			32,719			414,795			28,000
Repayment of debt and capital lease obligations		(58,923	)		(134,031	)		(251,986	)		(31,587	)		(476,527	)		(134,550	)
Proceeds from line of credit		45,000			15,000			-			-			60,000			40,000
Repayment of line of credit		(30,000	)		(30,000	)		-			-			(60,000	)		(40,000	)
Payment of financing costs, net of related payables		(2,776	)		(3,268	)		(2,392	)		(105	)		(8,541	)		(2,575	)
Other		(181	)		137			(546	)		(173	)		(763	)		(184	)
Refundable entrance fees:
Proceeds from refundable entrance fees		8,442			6,619			12,242			9,117			36,420			6,080
Refunds of entrance fees		(5,762	)		(5,360	)		(4,984	)		(4,954	)		(21,060	)		(4,930	)
Cash portion of loss on extinguishment of debt		(179	)		-			-			-			(179	)		(2,861	)
Recouponing and payment of swap termination		(640	)		(14	)		(19,773	)		-			(20,427	)		(64	)
Net cash provided by (used in) financing activities		4,089			(31,341	)		(54,047	)		5,017			(76,282	)		(111,084	)
Net (decrease) increase in cash and cash equivalents		(757	)		(14,268	)		17,616			12,866			15,457			(45,095	)
Cash and cash equivalents at beginning of period		66,370			65,613			51,345			68,961			66,370			81,827
Cash and cash equivalents at end of period	$	65,613		$	51,345		$	68,961		$	81,827		$	81,827		$	36,732