8-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)	November 15, 2011 (November 3, 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))

EXPLANATORY NOTE

Brookdale Senior Living Inc. is furnishing this Amendment No. 1 to the Current Report on Form 8-K dated November 4, 2011 (the “Original 8-K”) to furnish a revised and corrected version of the supplemental information attached as Exhibit 99.2 to the Original 8-K.  All other information in the Original 8-K remains unchanged.

Section 2 — Financial Information

Item 2.02     Results of Operations and Financial Condition.

On November 3, 2011, Brookdale Senior Living Inc. (the “Company”) issued a press release announcing its third 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.

Revised and corrected supplemental information relating to the Company’s third 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 November 3, 2011
99.2	Supplemental Information (as revised and corrected)

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:	November 15, 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 November 3, 2011.
99.2	Supplemental Information (as revised and corrected).

EX-99.1

FOR IMMEDIATE RELEASE

Contact:     

Brookdale Senior Living Inc.

Ross Roadman 615-564-8104

Brookdale Announces Third Quarter 2011 Results

Highlights

·   Cash From Facility Operations (“CFFO”) was $65.6 million, a 9.9% increase from $59.7 million for the third quarter of 2010, excluding $5.5 million of integration and transaction-related costs in the third quarter of 2011.  CFFO was $0.54 per share for the third quarter of 2011 versus $0.50 per share for the third quarter of 2010, excluding integration and transaction-related costs in the third quarter of 2011.

·   Resident fees and management fee revenue increased over the third quarter of 2010 by $20.0 million, or 3.6%, to $578.5 million.

·   Average occupancy increased 80 basis points from the second quarter of 2011 to the third quarter.

·   Same store senior housing rate growth was 3.3% for the third quarter of 2011 versus the third quarter of 2010.

·   The Company completed the acquisition of the nation’s ninth largest senior housing operator with 91 communities and 16,213 units.

·   Brookdale now operates 647 communities with over 67,000 units in 36 states.

Nashville, TN.  November 3, 2011 – Brookdale Senior Living Inc. (NYSE: BKD) (the “Company”) today reported financial and operating results for the third quarter of 2011.

Bill Sheriff, Brookdale’s CEO said, “The Company delivered a solid operating performance for the third quarter of 2011.  Increasing average occupancy by 80 basis points with a portfolio our size is meaningful.  Continuing to focus on marketing led to an average occupancy increase of 120 basis points from the year’s low point in May to 87.6% in September.  At the same time, our people have executed extremely well on integrating the Horizon Bay communities, a 30% increase in units operated, into our everyday business.  This is reflective of the strong capabilities of our organization and operating platform.”

Mark Ohlendorf, Co-President and CFO of Brookdale, commented, “During the quarter, for our same community portfolio of 532 communities, we achieved a senior housing rate growth of 3.3%, managed our senior housing expenses within an expected range at 2.8% and maintained our margins when compared to the third quarter of 2010.  With the financial transactions we

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completed during the quarter, we also continued to make progress with respect to our capital structure and debt maturity profile.”

Financial Results

Total revenue for the third quarter was $615.7 million, an increase of $39.9 million, or 6.9%, from the third quarter of 2010.  Resident and management fees for the third quarter were $578.5 million, an increase of $20.0 million, or 3.6%, from the third quarter of 2010.  Average monthly revenue per unit was $4,700 in the third quarter, an increase of $243, or 5.5%, over the third quarter of 2010.  Average occupancy for all consolidated communities for the third quarter of 2011 was 87.4%, flat with the third quarter of 2010 and 80 basis points higher than the second quarter of 2011.  As of September, average occupancy for all consolidated communities was 87.6%.

Facility operating expenses for the third quarter were $381.4 million, an increase of $12.5 million, or 3.4%, from the third quarter of 2010.  Operating contribution margin for the Company during the third quarter of 2011 was 33.7% versus 33.8% for the third quarter of 2010.

General and administrative expenses for the third quarter were $38.7 million, up from $33.2 million in the third quarter of 2010.  Excluding non-cash stock-based compensation expense for both periods and integration and transaction-related costs from the third quarter of 2011, general and administrative expenses were $28.0 million in the third quarter of 2011 versus $27.4 million for the prior year same period.  Demonstrating the Company’s efficient platform, general and administrative expenses for the quarter, excluding non-cash stock-based compensation expense and integration and transaction-related costs, were 4.3% of revenue (including revenues under management).

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.  Third quarter Adjusted EBITDA and Cash From Facility Operations included integration and transaction-related costs of $5.5 million.  For the nine months ended September 30, 2011, Adjusted EBITDA and Cash From Facility Operations included integration and transaction-related costs of $6.4 million.  Brookdale also uses Facility Operating Income to assess the performance of its communities.

For the quarter ended September 30, 2011, Facility Operating Income was $187.2 million, an increase of $5.7 million, or 3.1%, from the third quarter of 2010, and Adjusted EBITDA was $105.2 million, excluding the integration and transaction-related costs, an increase of $2.0 million, or 1.9%, over the third quarter of 2010.  For the nine months ended September 30, 2011, Facility Operating Income was $569.6 million, an increase of $18.5 million, or 3.3%, from the nine months ended September 30, 2010, and Adjusted EBITDA was $312.7 million, excluding integration and transaction-related costs, an increase of $12.8 million, or 4.3%, over the first nine months of 2010.

Cash From Facility Operations was $60.1 million for the third quarter of 2011, or $0.49 per share, and, excluding integration and transaction-related costs, was $65.6 million for the third

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quarter of 2011, or $0.54 per share, an increase of $5.9 million, or 9.9%, from CFFO of $59.7 million, or $0.50 per share, for the third quarter of 2010.  Cash From Facility Operations, excluding integration and transaction-related costs, was $189.5 million for the nine months ended September 30, 2011, an increase of $18.5 million, or 10.8%, from CFFO of $171.1 million for the first nine months of 2010.

Net loss for the third quarter of 2011 was $7.0 million, or $(0.06) per diluted common share. The loss for the quarter includes non-cash items for depreciation and amortization, non-cash stock-based compensation expense, gain on acquisition and straight-line lease expense, net of deferred gain amortization.

Operating Activities

For the quarter ended September 30, 2011, same community revenues grew 2.7% over the same period in 2010, as revenue per unit increased by 3.2% and occupancy decreased by 50 basis points.  Same community Facility Operating Income for the quarter increased by 1.2% when compared to the third quarter of 2010.

The same community results for senior housing, excluding ancillary services, for the three months ended September 30, 2011 showed revenues grew 2.7% over the corresponding period in 2010 as revenue per unit increased by 3.3%.  Same community Facility Operating Income for senior housing (excluding ancillary services) increased by 2.6% over the third quarter of 2010.

By the end of the third quarter, the Company’s ancillary services programs provided therapy services to almost 38,800 Brookdale units.  At the end of the quarter, the Company’s home health agencies were serving over 28,300 units across the total consolidated Brookdale portfolio, up from approximately 24,600 units served a year ago.  Outpatient therapy and home health services produced $166 of monthly Facility Operating Income per occupied unit in the third quarter across all units served, versus $175 per month a year ago.

Balance Sheet

Brookdale had $39.2 million of unrestricted cash and cash equivalents and $101.3 million of restricted cash on its balance sheet at the end of the third quarter.

As of September 30, 2011, the Company had an available secured line of credit with a $230.0 million commitment and separate secured and unsecured letter of credit facilities of up to $82.5 million in the aggregate.  As of September 30, 2011, there were $35.0 million of borrowings under the revolving loan facility and $71.8 million of letters of credit had been issued under the letter of credit facilities.

On July 29, 2011, the Company obtained $437.8 million in loans pursuant to the terms of a Master Credit Facility Agreement.  The loans are secured by first mortgages on 44 communities, and 75% of such loans bear interest at a fixed rate of 4.25% while the remaining 25% of such loans bear interest at a variable rate equal to the 30-day LIBOR plus a margin of 182 basis points.  The loans mature on August 1, 2018 and require amortization of principal over a 30 year period.  Proceeds of the loans, together with cash on hand, were used to refinance or prepay

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$445.2 million of mortgage debt which was scheduled to mature in February and August 2012. The Company currently has no mortgage debt maturities before 2013, other than periodic, scheduled principal payments.

On August 11, 2011, the Company’s board of directors approved a share repurchase program that authorizes the Company to purchase up to $100.0 million in the aggregate of the Company’s common stock.  Pursuant to this authorization, during the three and nine months ended September 30, 2011, the Company purchased 1,217,100 shares at a cost of approximately $17.6 million, or a weighted average price of approximately $14.44 per share.  As of September 30, 2011, approximately $82.4 million remains available under this share repurchase authorization.

Acquisitions/Divestitures

On September 1, 2011, the Company completed its previously announced acquisition of 100% of the equity interests in Horizon Bay Realty, L.L.C. ("Horizon Bay").  As a result of the transaction, the Company added to its portfolio 91 communities with over 16,200 units in 19 states.  In connection with the acquisition, the Company restructured Horizon Bay's existing relationship with HCP, Inc. (“HCP”) relating to 33 communities that Horizon Bay leased from HCP.  In particular, the Company (i) formed a joint venture with HCP to own and operate 21 communities, and (ii) leased the remaining 12 communities from HCP pursuant to long term, triple net leases.  The Company acquired a 10% interest in the joint venture, which utilizes a RIDEA structure.  The Company manages the joint venture communities under a ten-year management agreement with four five-year renewal options and retains all ancillary services operations.  Horizon Bay also leases an additional community from HCP pursuant to a triple net lease and subleases that community to a third-party operator.

The Company also provides management services to the remaining 58 Horizon Bay communities.  In conjunction with the acquisition, the Company entered into an agreement to restructure the management agreements with Chartwell Seniors Housing Real Estate Investment Trust (“Chartwell”) relating to 45 of these communities.  As part of the restructuring of the management agreements, Chartwell granted Brookdale an option through 2013 to acquire a 20% interest in Chartwell’s U.S. real estate assets managed by Brookdale.  Brookdale will also have a right of first offer to acquire any of Chartwell’s assets managed by Brookdale.

Certain elements of the Chartwell management arrangement restructuring are subject to lender and other third party approvals. Until such approvals are received, the Company will operate Chartwell’s properties under the existing management contracts.

Additionally, the Company sold one community during the quarter, a Retirement Center with a total of 74 units, for $2.0 million. The Company had recorded a $2.1 million impairment charge in the first quarter of 2011 related to this community and recorded an additional loss on disposition of $0.1 million.

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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 third 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 to discuss the results on Friday, November 4, 2011 at 10:00 AM ET.  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 Third 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 through the website 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 November 11, 2011 by dialing (855) 859-2056(from within the U.S.) or (404) 537-3406(from outside of the U.S.) and referencing access code “22294643”.  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 operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 647 communities in 36 states and the ability to serve over 67,000 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 the consummation of the restructuring of the management agreements with Chartwell Seniors Housing Real Estate Investment Trust (including the anticipated timing thereof); statements relating to our operational initiatives and our expectations regarding their effect on our results; our expectations regarding occupancy, revenue, cash flow, expenses, capital expenditures, Program Max opportunities, cost savings, the demand for senior housing, expansion and development activity, acquisition opportunities, asset dispositions, our share repurchase program, taxes and CFFO; our belief regarding the value of our common stock and our growth prospects; our ability to secure

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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) and their effect on our results; 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 that we may not be able to satisfy the conditions and successfully complete the Chartwell management agreement restructuring; the risk that we may not be able to successfully integrate the new Horizon Bay communities into our operations; our determination from time to time to purchase any shares under the repurchase program; our ability to fund any repurchases; 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 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; 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;

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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						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Revenue
Resident fees	$	575,159		$	557,125		$	1,707,117		$	1,647,714
Management fees		3,336			1,339			6,246			4,146
Reimbursed costs incurred on behalf of managed communities		37,233			17,325			72,584			50,451
Total revenue		615,728			575,789			1,785,947			1,702,311
Expense
Facility operating expense (excluding depreciation and amortization of $54,227, $54,070, $155,206 and $158,277, respectively)		381,414			368,936			1,118,610			1,077,311
General and administrative expense (including non-cash stock-based compensation expense of $5,221, $5,823, $14,316 and $15,799, respectively)		38,711			33,231			105,935			97,017
Facility lease expense		68,314			68,090			200,694			203,514
Depreciation and amortization		64,071			74,951			206,430			221,180
Asset impairment		-			-			14,846			-
Gain on acquisition		(3,520	)		-			(3,520	)		-
Costs incurred on behalf of managed communities		37,233			17,325			72,584			50,451
Facility lease termination expense		-			4,616			-			4,616
Total operating expense		586,223			567,149			1,715,579			1,654,089
Income from operations		29,505			8,640			70,368			48,222
Interest income		1,171			441			2,569			1,521
Interest expense:
Debt		(30,433	)		(33,357	)		(92,667	)		(100,540	)
Amortization of deferred financing costs and debt discount		(4,310	)		(2,244	)		(9,024	)		(7,250	)
Change in fair value of derivatives and amortization		(1,508	)		(176	)		(4,151	)		(5,023	)
Loss on extinguishment of debt, net		(715	)		(856	)		(18,863	)		(1,557	)
(Loss) equity in earnings of unconsolidated ventures		(117	)		272			295			788
Other non-operating (expense) income		(116	)		(1,454	)		260			(1,454	)
Loss before income taxes		(6,523	)		(28,734	)		(51,213	)		(65,293	)
(Provision) benefit for income taxes		(513	)		11,821			(2,087	)		24,528
Net loss	$	(7,036	)	$	(16,913	)	$	(53,300	)	$	(40,765	)
Basic and diluted loss per share	$	(0.06	)	$	(0.14	)	$	(0.44	)	$	(0.34	)
Weighted average shares used in computing basic and diluted net loss per share		121,616			120,404			121,232			119,817

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Condensed Consolidated Balance Sheets

(in thousands)

	September 30, 2011		December 31, 2010
	(Unaudited)
Cash and cash equivalents	$	39,195	$	81,827
Cash and escrow deposits - restricted		50,143		81,558
Accounts receivable, net		93,447		88,033
Other current assets		90,506		76,691
Total current assets		273,291		328,109
Property, plant, and equipment and
leasehold intangibles, net		3,681,280		3,736,842
Other assets, net		483,870		465,519
Total assets	$	4,438,441	$	4,530,470
Current liabilities	$	607,187	$	606,358
Long-term debt, less current portion		2,365,990		2,498,620
Other liabilities		415,878		365,495
Total liabilities		3,389,055		3,470,473
Stockholders’ equity		1,049,386		1,059,997
Total liabilities and stockholders’ equity	$	4,438,441	$	4,530,470

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Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Nine Months Ended September 30,
	2011			2010
Cash Flows from Operating Activities
Net loss	$	(53,300	)	$	(40,765	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on extinguishment of debt		18,863			1,557
Depreciation and amortization		215,454			228,430
Asset impairment		14,846			-
Equity in earnings of unconsolidated ventures		(295	)		(788	)
Distributions from unconsolidated ventures from cumulative share of net earnings		700			375
Amortization of deferred gain		(3,280	)		(3,258	)
Amortization of entrance fees		(18,865	)		(18,160	)
Proceeds from deferred entrance fee revenue		26,475			27,716
Deferred income tax benefit		-			(26,544	)
Change in deferred lease liability		5,006			8,109
Change in fair value of derivatives and amortization		4,151			5,023
(Gain) loss on sale of assets		(1,180	)		1,548
Gain on acquisition		(3,520	)		-
Change in future service obligation		-			(1,064	)
Non-cash stock-based compensation		14,316			15,799
Changes in operating assets and liabilities:
Accounts receivable, net		(2,375	)		(6,480	)
Prepaid expenses and other assets, net		(17,065	)		(4,007	)
Accounts payable and accrued expenses		2,826			5,721
Tenant refundable fees and security deposits		(1,941	)		(2,720	)
Deferred revenue		3,609			(5	)
Other		7,577			(11,332	)
Net cash provided by operating activities		212,002			179,155
Cash Flows from Investing Activities
(Increase) decrease in lease security deposits and lease acquisition deposits, net		(1,591	)		2,067
Decrease (increase) in cash and escrow deposits — restricted		56,244			(2,567	)
Net proceeds from the sale of assets		30,817			1,487
Additions to property, plant, and equipment and leasehold intangibles, net of related payables		(114,588	)		(70,604	)
Purchase of marketable securities — restricted		(32,724	)		-
Sale of marketable securities — restricted		1,415			-
Acquisition of assets, net of related payables and cash received		(54,597	)		(26,116	)
Purchase of Horizon Bay Realty, L.L.C., net of cash acquired		5,516			-
Receipt of notes receivable, net		1,674			1,013
Investment in unconsolidated ventures		(13,711	)		(659	)
Distributions received from unconsolidated ventures		156			77
Proceeds from the sale of unconsolidated venture		-			675
Other		(821	)		(638	)
Net cash used in investing activities		(122,210	)		(95,265	)
Cash Flows from Financing Activities
Proceeds from debt		477,525			382,076
Proceeds from issuance of convertible debt, net		308,233			-
Issuance of warrants		45,066			-
Purchase of bond hedge		(77,007	)		-
Repayment of debt and capital lease obligations		(879,573	)		(444,940	)
Proceeds from line of credit		120,000			60,000
Repayment of line of credit		(85,000	)		(60,000	)
Payment of financing costs, net of related payables		(8,170	)		(8,436	)
Other		(454	)		(590	)
Refundable entrance fees:
Proceeds from refundable entrance fees		18,594			27,303
Refunds of entrance fees		(16,886	)		(16,106	)
Cash portion of loss on extinguishment of debt		(17,040	)		(179	)
Recouponing and payment of swap termination		(99	)		(20,427	)
Purchase of treasury stock		(17,613	)		-
Net cash used in financing activities		(132,424	)		(81,299	)
Net (decrease) increase in cash and cash equivalents		(42,632	)		2,591
Cash and cash equivalents at beginning of period		81,827			66,370
Cash and cash equivalents at end of period	$	39,195		$	68,961

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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 or acquisition 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 and nine months ended September 30, 2011 and 2010 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011(1)			2010			2011(1)			2010
Net loss	$	(7,036	)	$	(16,913	)	$	(53,300	)	$	(40,765	)
Provision (benefit) for income taxes		513			(11,821	)		2,087			(24,528	)
Loss (equity) in earnings of unconsolidated ventures		117			(272	)		(295	)		(788	)
Loss on extinguishment of debt		715			856			18,863			1,557
Other non-operating expense (income)		116			1,454			(260	)		1,454
Interest expense:
Debt		22,602			25,817			68,762			77,786
Capitalized lease obligation		7,831			7,540			23,905			22,754
Amortization of deferred financing costs and debt discount		4,310			2,244			9,024			7,250
Change in fair value of derivatives and amortization		1,508			176			4,151			5,023
Interest income		(1,171	)		(441	)		(2,569	)		(1,521	)
Income from operations		29,505			8,640			70,368			48,222
Facility lease termination expense		-			4,616			-			4,616
Depreciation and amortization		64,071			74,951			206,430			221,180
Asset impairment		-			-			14,846			-
Gain on acquisition		(3,520	)		-			(3,520	)		-
Straight-line lease expense		1,834			2,812			5,016			8,109
Amortization of deferred gain		(1,094	)		(1,086	)		(3,280	)		(3,258	)
Amortization of entrance fees		(6,499	)		(6,634	)		(18,865	)		(18,160	)
Non-cash stock-based compensation expense		5,221			5,823			14,316			15,799
Change in future service obligation		-			-			-			(1,064	)
Entrance fee receipts(2)		18,019			22,054			45,069			55,019
First generation entrance fees received (3)		(2,293	)		(2,921	)		(7,177	)		(14,488	)
Entrance fee disbursements		(5,475	)		(4,984	)		(16,886	)		(16,106	)
Adjusted EBITDA	$	99,769		$	103,271		$	306,317		$	299,869

(1) The calculation of Adjusted EBITDA includes integration and transaction-related costs of $5.5 million and $6.4 million for the three and nine months ended September 30, 2011, respectively.

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

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

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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 and nine months ended September 30, 2011.  Due to immateriality, the prior periods have 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 and nine months ended September 30, 2011 and 2010 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011(1)			2010			2011(1)			2010
Net cash provided by operating activities	$	54,650		$	64,384		$	212,002		$	179,155
Changes in operating assets and liabilities		16,617			(3,812	)		7,369			18,823
Refundable entrance fees received(2)		7,204			12,242			18,594			27,303
First generation entrance fees received (3)		(2,293	)		(2,921	)		(7,177	)		(14,488	)
Entrance fee refunds disbursed		(5,475	)		(4,984	)		(16,886	)		(16,106	)
Recurring capital expenditures, net		(8,675	)		(7,572	)		(25,000	)		(21,583	)
Lease financing debt amortization with fair market value or no purchase options		(2,645	)		(2,267	)		(7,765	)		(6,659	)
Facility lease termination expense		-			4,616			-			4,616
Cash From Facility Operations from unconsolidated ventures		738			-			2,040			-
Cash From Facility Operations	$	60,121		$	59,686		$	183,177		$	171,061

(1)   The calculation of CFFO includes integration and transaction-related costs of $5.5 million and $6.4 million for the three and nine months ended September 30, 2011, respectively.

(2)   Total entrance fee receipts for the three months ended September 30, 2011 and 2010 were $18.0 million and $22.1 million, respectively, including $10.8 million and $9.8 million, respectively, of non-refundable entrance fee receipts included in net cash provided by operating activities.  Total entrance fee receipts for the nine months ended September 30, 2011 and 2010 were $45.1 million and $55.0 million, respectively, including $26.5 million and $27.7 million, respectively, of non-refundable entrance fee receipts included in net cash provided by operating activities.

(3)   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.

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

Page 13 of 14

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 or acquisition 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 and nine months ended September 30, 2011 and 2010 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Net loss	$	(7,036	)	$	(16,913	)	$	(53,300	)	$	(40,765	)
Provision (benefit) for income taxes		513			(11,821	)		2,087			(24,528	)
Loss (equity) in earnings of unconsolidated ventures		117			(272	)		(295	)		(788	)
Loss on extinguishment of debt		715			856			18,863			1,557
Other non-operating expense (income)		116			1,454			(260	)		1,454
Interest expense:
Debt		22,602			25,817			68,762			77,786
Capitalized lease obligation		7,831			7,540			23,905			22,754
Amortization of deferred financing costs and debt discount		4,310			2,244			9,024			7,250
Change in fair value of derivatives and amortization		1,508			176			4,151			5,023
Interest income		(1,171	)		(441	)		(2,569	)		(1,521	)
Income from operations		29,505			8,640			70,368			48,222
Facility lease termination expense		-			4,616			-			4,616
Depreciation and amortization		64,071			74,951			206,430			221,180
Asset impairment		-			-			14,846			-
Gain on acquisition		(3,520	)		-			(3,520	)		-
Change in future service obligation		-			-			-			(1,064	)
Facility lease expense		68,314			68,090			200,694			203,514
General and administrative (including non-cash
stock-based compensation expense)		38,711			33,231			105,935			97,017
Amortization of entrance fees		(6,499	)		(6,634	)		(18,865	)		(18,160	)
Management fees		(3,336	)		(1,339	)		(6,246	)		(4,146	)
Facility Operating Income	$	187,246		$	181,555		$	569,642		$	551,179

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EX-99.2

Brookdale Senior Living Inc.

Corporate Overview - selected financial information

As of September 30, 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 September 30, 2011, the Company operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 647 communities in 36 states and the ability to serve over 67,000 residents.

Stock Listing

Common Stock

NYSE: BKD

Community Information

Ownership Type	Number of Facilities		Number of Units		Percentage of Q3 2011 Revenues			Percentage of Q3 2011 Facility Operating Income			Percentage of YTD 2011 Revenues			Percentage of YTD 2011 Facility Operating Income
Owned		199		20,661		40.9	%		41.2	%		42.2	%		41.9	%
Leased		350		28,005		52.5	%		57.1	%		53.4	%		57.0	%
Managed		98		18,426		6.6	%		1.7	%		4.4	%		1.1	%
Total		647		67,092		100.0	%		100.0	%		100.0	%		100.0	%
Operating Type
Retirement Centers		76		14,559		21.5	%		27.0	%		21.8	%		26.5	%
Assisted Living		433		21,567		43.2	%		45.3	%		44.4	%		46.3	%
CCRCs		40		12,540		28.7	%		26.0	%		29.4	%		26.1	%
Managed		98		18,426		6.6	%		1.7	%		4.4	%		1.1	%
Total		647		67,092		100.0	%		100.0	%		100.0	%		100.0	%

CFFO Per Share ($)

($ except where indicated)	FY 2010										FY 2011
		Q1		Q2		Q3		Q4	Full Year(1)			Q1		Q2		Q3
Reported CFFO	$	0.46	$	0.48	$	0.50	$	0.58	$	2.02	$	0.51	$	0.51	$	0.49
Add: integration and transaction-related costs		-		-		-		-		-		-		0.01		0.05
Adjusted CFFO	$	0.46	$	0.48	$	0.50	$	0.58	$	2.02	$	0.51	$	0.52	$	0.54
Weighted Average Shares (000's)		119,315		119,721		120,404		120,580				120,792		121,280		121,616
(1) Full year 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 third quarter earnings release for non-GAAP financial measure definitions and reconciliations.

Brookdale Senior Living Inc.

Operating Segment Information

As of September 30, 2011

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

	FY 2010															FY 2011
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2			Q3
Retirement Centers
Number of communities (period end)		80			80			80			78			78			75			74			76
Total average units(1)(2)		14,737			14,737			14,734			14,594			14,700			14,104			14,050			14,131
Weighted average unit occupancy		87.0	%		87.1	%		87.4	%		87.4	%		87.2	%		87.3	%		87.3	%		88.4	%
Average monthly revenue per unit(3)	$	3,419		$	3,434		$	3,461		$	3,467		$	3,445		$	3,482		$	3,501		$	3,524
Assisted Living
Number of communities (period end)		429			429			429			427			427			428			428			433
Total average units(1)(2)		21,152			21,115			21,114			21,056			21,109			21,295			21,145			21,265
Weighted average unit occupancy		87.6	%		88.0	%		89.0	%		89.0	%		88.4	%		88.2	%		87.4	%		88.4	%
Average monthly revenue per unit(3)	$	4,526		$	4,571		$	4,606		$	4,589		$	4,573		$	4,705		$	4,722		$	4,717
CCRCs
Number of communities (period end)		36			36			36			35			35			36			36			40
Total average units(1)(2)		11,287			11,276			11,269			11,264			11,274			11,211			11,212			11,395
Weighted average unit occupancy		84.0	%		84.2	%		84.4	%		84.7	%		84.3	%		85.3	%		84.4	%		84.4	%
Average monthly revenue per unit(3)	$	5,421		$	5,437		$	5,509		$	5,699		$	5,517		$	5,873		$	5,874		$	5,906

Consolidated Totals
Number of communities (period end)		545			545			545			540			540			539			538			549
Total average units(1)(2)		47,176			47,128			47,117			46,914			47,083			46,610			46,407			46,791
Weighted average unit occupancy		86.6	%		86.8	%		87.4	%		87.5	%		87.1	%		87.2	%		86.6	%		87.4	%
Average monthly revenue per unit(3)	$	4,386		$	4,415		$	4,457		$	4,498		$	4,439		$	4,609		$	4,620		$	4,632

Management Services
Number of communities (period end)		19			19			19			19			19			19			19			98
Total average units(1)(2)		3,788			3,788			3,786			3,786			3,787			3,784			3,785			8,649
Weighted average occupancy		83.4	%		83.5	%		83.7	%		84.5	%		83.8	%		84.7	%		84.8	%		84.3	%
Average monthly revenue per unit(3)	$	3,630		$	3,609		$	3,651		$	3,762		$	3,663		$	3,778		$	3,836		$	3,484

(1)	Total average units operated represent the average units operated during the period, excluding equity homes.
(2)	The Horizon Bay/HCP transactions, effective September 1, 2011, impacted period end total units.  Period end total units for Q3 2011, excluding equity homes, for Retirement Centers, Assisted Living, CCRCs, Consolidated Totals and Management Services were 14,464, 21,524, 11,764, 47,752 and 18,426, respectively.
(3)	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 September 30, 2011

Same Community Information

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

	Three Months Ended September 30,									Twelve Months Ended September 30,
	2011			2010			% Change			2011			2010			% Change
Revenue	$	544,092		$	529,959			2.7	%	$	2,005,136		$	1,946,737			3.0	%
Operating Expense		363,564			351,528			3.4	%		1,308,228			1,269,503			3.1	%
Facility Operating Income	$	180,528		$	178,431			1.2	%	$	696,908		$	677,234			2.9	%
Facility Operating Margin		33.2	%		33.7	%		-0.5	%		34.8	%		34.8	%		0.0	%
# Communities		532			532						506			506
Avg. Period Occupancy		87.5	%		88.0	%		-0.5	%		87.4	%		88.0	%		-0.6	%
Avg. Mo. Revenue/Unit	$	4,585		$	4,441			3.2	%	$	4,493		$	4,332			3.7	%

Schedule of Capital Expenditures

($ in 000s)

	Three Months Ended September 30,
	2011			2010
Type
Recurring	$	9,500		$	8,243
Reimbursements		(825	)		(671	)
Net Recurring		8,675			7,572
Corporate (1)		8,291			4,932
EBITDA-enhancing / Major Projects (2)		14,842			9,052
Program Max / Development, net (3)		14,026			1,976
Net Total Capital Expenditures (4)	$	45,834		$	23,532

(1)  Corporate includes home health acquisitions, capital expenditures for information technology systems and equipment and expenditures supporting the expansion of our support platform and ancillary services programs.

(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 $0.9 million for the three months ended September 30, 2010.

(4)  Approximately $10.0 million and $10.1 million of expense was recognized during the three months ended September 30, 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 September 30,
	2011		2010
Brookdale Units Served:
Therapy		38,775		38,101
Home Health		28,347		24,676
Avg. Mo. NOI/Occupied Unit:
Total, including Skilled Nursing	$	219	$	264
Outpatient Therapy and Home Health Only	$	166	$	175

Brookdale Senior Living Inc.

Capital Structure - selected financial information

As of September 30, 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	$	3,490		4.41	%	$	-		-		$	3,490		4.41	%	$	5,918		8.37	%	$	9,408
2012		20,681		4.37	%		-		-			20,681		4.37	%		25,756		8.39	%		46,437
2013		571,551		3.87	%		-		-			571,551		3.87	%		29,154		8.40	%		600,705
2014		145,943		5.75	%		-		-			145,943		5.75	%		30,968		8.44	%		176,911
2015		35,037		5.80	%		-		-			35,037		5.80	%		32,889		8.48	%		67,926
Thereafter		1,280,675		4.30	%		35,000		6.50	%		1,315,675		4.36	%		229,291		8.71	%		1,544,966
Total	$	2,057,377		4.31	%	$	35,000		6.50	%	$	2,092,377		4.35	%	$	353,976		8.61	%	$	2,446,353

	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	$	3,490		4.41	%	$	-		-		$	3,490		4.41	%	$	5,918		8.37	%	$	9,408
2012		20,681		4.37	%		-		-			20,681		4.37	%		25,756		8.39	%		46,437
2013		446,201		3.45	%		-		-			446,201		3.45	%		29,154		8.40	%		475,355
2014		5,943		5.03	%		-		-			5,943		5.03	%		30,968		8.44	%		36,911
2015		175,037		5.83	%		-		-			175,037		5.83	%		32,889		8.48	%		207,926
Thereafter		1,406,025		4.39	%		35,000		6.50	%		1,441,025		4.44	%		229,291		8.71	%		1,670,316
Total	$	2,057,377		4.31	%	$	35,000		6.50	%	$	2,092,377		4.35	%	$	353,976		8.61	%	$	2,446,353

Coverage Ratios

	Nine months ended September 30, 2011
				Interest/Cash Lease
	Units	FOI	Adj. FOI **	Payments	Coverage
Owned Communities	20,661	249,636	206,516	68,762	3.0x
Leased Communities *	28,005	338,872	283,860	222,985	1.3x

*  The leased communities include the capital leases.

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

Debt Amortization

		Nine months ended September 30,
		2011	2010
Scheduled Debt Amortization	$	12,722	$                5,694
Lease Financing Debt Amortization - FMV or no Purchase Option (4)		7,765	6,659
Lease Financing Debt Amortization - Bargain Purchase Option		9,242	8,584
Total Debt Amortization	$	29,729	$              20,937

Line Availability

($000s)	09/30/10		12/31/10		03/31/11		06/30/11		09/30/11
Ending Line Balance	$	-	$	-	$	-	$	-	$	35,000
Cash and cash equivalents		68,961		81,827		36,732		40,126		39,195
Total Line Capacity (7)		120,000		120,000		230,000		230,000		230,000
Total Liquidity (Line Availability + Cash) (7)	$	188,961	$	201,827	$	266,732	$	270,126	$	234,195
Total letters of credit outstanding	$	72,690	$	72,012	$	71,878	$	72,051	$	71,785

Leverage Ratios

				Annualized
	Balance			Leverage
Debt (1)	$	2,057,377
Capital Leases		353,976
Total Debt	$	2,411,353			5.9	x
Plus: Line of Credit (cash borrowings)		35,000
Less: Unrestricted Cash		(39,195	)
Less: Cash held as collateral against existing debt		(4,079	)
Subtotal	$	2,403,079			5.9	x
2011 YTD annualized Adjusted EBITDA	$	408,423
Annual Cash Lease Expense multiplied by 8		2,122,219
Total Adjusted Debt	$	4,525,298			6.7	x
2011 YTD annualized Adjusted EBITDAR	$	673,700

Debt Structure

			weighted
	Balance		rate (2)
Fixed Rate Debt	$	1,419,666		5.01	%
Variable Rate Debt (1)		637,711		2.76	%
Capital Leases		353,976		8.61	%
Line of Credit (cash borrowings)		35,000		6.50	%
Total Debt	$	2,446,353
	Balance		% of total
Variable Rate debt with Interest Rate Swaps (5)	$	177,852		27.9	%
Variable Rate debt with Interest Rate Caps (1) (6)		243,836		38.2	%
Variable Rate debt - Unhedged		216,023		33.9	%
Total Variable Rate Debt (1)	$	637,711		100.0	%

(1) Includes mortgage debt, bond and discount mortgage backed security financing and convertible notes, but excludes capital leases and line of credit.

(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 1.60%.

(6) Weighted cap rate for stated reporting period of 5.74% 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.

Selected Data - 2011 Convertible Debt Issuance

As of September 30, 2011

($ in 000's)

Issuance Proceeds:

Face Amount of Notes	316,250
Total Issuance Costs	(7,949)	See detail below.
Purchase of Hedge	(77,007)	The net cost of the bond hedge is $31,941.
Sale of Warrants	45,066	This net amount will reduce equity resulting from the issuance.
Net Cash Proceeds	276,360

Issuance Costs:

Notes Payable	5,944
Equity Component	2,005
	7,949
Initial GAAP Recording:
Cash Proceeds	276,360
Deferred Financing Costs	5,944
	282,304
Notes Payable	237,444	Face amount discounted using effective 7.5% interest rate.
Paid In Capital	44,860	See detail below.
	282,304
Change In Equity:
Imbedded Conversion Option	78,806
Purchase of Hedge	(77,007)
Sale of Warrants	45,066
Equity Issuance Costs	(2,005)
	44,860

Balance Sheet Balances					Interest Expense Amounts
	Notes		Deferred		Period	GAAP		Cash
As of	Liability		Fin. Costs		Ending	Interest		Interest
Closing		237,444		5,944
31-Dec-2011		241,899		5,519	6 Mo. 12/2011		9,214		4,759
31-Dec-2012		251,314		4,670	Year 12/2012		18,112		8,697
31-Dec-2013		261,445		3,821	Year 12/2013		18,828		8,697
31-Dec-2014		272,347		2,972	Year 12/2014		19,599		8,697
31-Dec-2015		284,079		2,123	Year 12/2015		20,429		8,697
31-Dec-2016		296,704		1,274	Year 12/2016		21,322		8,697
31-Dec-2017		310,290		424	Year 12/2017		22,283		8,697
15-Jun-2018		316,250		-	6 Mo. 6/2018		9,946		3,986

Brookdale Senior Living Inc.

CFFO Reconciliation

As of September 30, 2011

CFFO Calculation

($ in 000s)

	Three Months Ended September 30,
	2011			2010
Net cash provided by operating activities (includes non-refundable entrance fees)	$	54,650		$	64,384
Changes in operating assets and liabilities (eliminates cash flow effect)		16,617			(3,812	)
Add: Refundable entrance fees received		7,204			12,242
Less: First generation entrance fees received		(2,293	)		(2,921	)
Less: Entrance fee refunds disbursed		(5,475	)		(4,984	)
Less: Recurring capital expenditures, net		(8,675	)		(7,572	)
Less: Lease financing debt amortization with fair market value or no purchase options		(2,645	)		(2,267	)
Add: Facilitiy lease termination expense		-			4,616
Add: Cash From Facility Operations from unconsolidated ventures		738			-
Cash From Facility Operations	$	60,121		$	59,686

Revenue Reconciliation (1)

($ in 000s except average monthly revenue per quarter)	FY 2010															FY 2011
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2			Q3
Revenue reconciliation excl. entrance fee amortization
Average monthly revenue per quarter		4,386			4,415			4,457			4,498			4,439			4,609			4,620			4,632
Average monthly units (excluding equity homes) available		47,179			47,119			47,106			46,897			47,057			46,634			46,433			46,822
Average occupancy for the quarter		86.6	%		86.8	%		87.4	%		87.5	%		87.1	%		87.2	%		86.6	%		87.4	%
Resident fee revenue	$	537,290		$	541,773		$	550,491		$	553,722		$	2,183,276		$	562,273		$	557,319		$	568,660
Add:  management fee revenue		1,395			1,412			1,339			1,445			5,591			1,405			1,505			3,336
Total revenues excluding entrance fee amortization	$	538,685		$	543,185		$	551,830		$	555,167		$	2,188,867		$	563,678		$	558,824		$	571,996

CFFO Reconciliation to the Income Statement

Resident fee revenue	$	544,424		$	548,972		$	558,464		$	561,404		$	2,213,264		$	569,440		$	565,428		$	578,495
Less:  Entrance fee amortization		(5,739	)		(5,787	)		(6,634	)		(6,237	)		(24,397	)		(5,762	)		(6,604	)		(6,499	)
Adjusted revenues		538,685			543,185			551,830			555,167			2,188,867			563,678			558,824			571,996
Less: Facility operating expenses		(355,324	)		(353,051	)		(368,936	)		(357,321	)		(1,434,632	)		(370,954	)		(366,242	)		(381,414	)
Add: Gain on sale of communities, 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	)		(366,242	)		(381,414	)
Less:  G&A including non-cash stock-based compensation expense		(31,952	)		(31,834	)		(33,231	)		(34,692	)		(131,709	)		(33,543	)		(33,681	)		(38,711	)
Add:  G&A non-cash stock-based compensation expense		4,871			5,105			5,823			4,960			20,759			4,540			4,555			5,221
Net G&A		(27,081	)		(26,729	)		(27,408	)		(29,732	)		(110,950	)		(29,003	)		(29,126	)		(33,490	)
Less: Facility lease expense		(68,249	)		(67,175	)		(72,706	)		(67,383	)		(275,513	)		(66,315	)		(66,065	)		(68,314	)
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			1,456			1,834
Less: Amortization of deferred gain		(1,086	)		(1,086	)		(1,086	)		(1,085	)		(4,343	)		(1,093	)		(1,093	)		(1,094	)
Net lease expense		(66,199	)		(66,100	)		(66,364	)		(66,064	)		(264,727	)		(65,682	)		(65,702	)		(67,574	)
Add: Entrance fee receipts		12,021			9,377			19,133			14,827			55,358			9,712			12,454			15,726
Less: Entrance fee disbursements		(5,762	)		(5,360	)		(4,984	)		(4,954	)		(21,060	)		(4,930	)		(6,481	)		(5,475	)
Net entrance fees		6,259			4,017			14,149			9,873			34,298			4,782			5,973			10,251

Adjusted EBITDA 96,340 100,258 103,271 108,625 408,494 102,821 103,727 99,769

Less:  Recurring capital expenditures, net		(6,441	)		(7,570	)		(7,572	)		(6,386	)		(27,969	)		(7,057	)		(9,268	)		(8,675	)
Less:  Interest expense, net		(32,653	)		(33,450	)		(32,916	)		(31,384	)		(130,403	)		(30,936	)		(29,900	)		(29,262	)
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	)		(2,587	)		(2,645	)
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			661			738
Less:  Other		(678	)		(39	)		(830	)		(206	)		(1,753	)		(1,185	)		(1,328	)		196
Reported CFFO	$	54,397		$	56,978		$	59,686		$	69,611		$	240,672		$	61,751		$	61,305		$	60,121
Add:  integration and transaction-related costs		-			-			-			-			-			-			894			5,468
Adjusted CFFO	$	54,397		$	56,978		$	59,686		$	69,611		$	240,672		$	61,751		$	62,199		$	65,589

CFFO Per Share ($)

($ except where indicated)	FY 2010										FY 2011
		Q1		Q2		Q3		Q4	Full Year(2)			Q1		Q2		Q3
Reported CFFO	$	0.46	$	0.48	$	0.50	$	0.58	$	2.02	$	0.51	$	0.51	$	0.49
Add:  integration and transaction-related costs		-		-		-		-		-		-		0.01		0.05
Adjusted CFFO	$	0.46	$	0.48	$	0.50	$	0.58	$	2.02	$	0.51	$	0.52	$	0.54
Shares used in calculation of CFFO (000's)		119,315		119,721		120,404		120,580				120,792		121,280		121,616

(1) Revenue excludes reimbursed costs incurred on behalf of managed communities.

(2) Full year 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 September 30, 2011

	Q1 10	Q2 10	Q3 10	Q4 10	Q1 11	Q2 11	Q3 11
Occupancy	81.8%	81.3%	81.3%	82.0%	82.6%	82.3%	82.0%
Ending # EF Vacant Units	547	569	594	588	594	620	621
# Closings	67	59	87	73	53	73	88
# of Refunds	80	67	81	82	69	70	70

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	8,305	9,360
Proceeds from refundable entrance fees (2)(3)	5,138	3,811	11,035	8,118	4,794	4,149	6,366
Total Cash Proceeds	12,021	9,377	19,133	14,827	9,712	12,454	15,726
Refunds of entrance fees (4)	(5,762)	(5,360)	(4,984)	(4,954)	(4,930)	(6,481)	(5,475)
Net Resale Cash Flow	6,259	4,017	14,149	9,873	4,782	5,973	10,251
My Choice proceeds included in refundable resale receipts above	132	206	6,463	3,789	1,144	1,591	2,264
Average Resale $ (excluding My Choice proceeds)	177,448	155,441	145,632	151,205	161,660	148,808	152,977
Average Refund $ (excluding My Choice refunds)	(68,375)	(78,209)	(61,383)	(55,378)	(70,058)	(84,014)	(74,943)

Value of Unsold Inventory ($ in 000's except average resale price)
Gross Value @ Average Resale Price of $170,000 (2)	105,570
Refund Attachments	(12,331)
Net Cash Value	93,239

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	Q2 11	Q3 11
Amortization of entrance fees (incl. gains on terminations) (5)	(5,426)	(5,404)	(6,173)	(5,765)	(5,204)	(6,022)	(5,890)

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.

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

(5) Excludes first generation entrance fee amortization

Brookdale Senior Living Inc.

Quarterly Cash Flow Statements

As of September 30, 2011

($ in 000s)

Cash Flow Statements

		Q1 2010			Q2 2010			Q3 2010			Q4 2010		FY 2010				Q1 2011			Q2 2011			Q3 2011
Cash Flows from Operating Activities
Net loss	$	(14,295	)	$	(9,557	)	$	(16,913	)	$	(8,136	)	$	(48,901	)	$	(12,305	)	$	(33,959	)	$	(7,036	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on extinguishment of debt		19			682			856			-			1,557			2,894			15,254			715
Depreciation and amortization		75,657			75,578			77,195			72,874			301,304			74,486			72,587			68,381
Asset impairment		-			-			-			13,075			13,075			14,846			-			-
Equity in (earnings) loss of unconsolidated ventures		(397	)		(119	)		(272	)		620			(168	)		(266	)		(146	)		117
Distributions from unconsolidated ventures from cumulative share of net earnings		-			375			-			400			775			-			-			700
Amortization of deferred gain		(1,086	)		(1,086	)		(1,086	)		(1,085	)		(4,343	)		(1,093	)		(1,093	)		(1,094	)
Amortization of entrance fees		(5,739	)		(5,787	)		(6,634	)		(6,237	)		(24,397	)		(5,762	)		(6,604	)		(6,499	)
Proceeds from deferred entrance fee revenue		9,550			8,354			9,812			9,770			37,486			6,361			9,299			10,815
Deferred income tax (benefit) provision		(8,200	)		(5,743	)		(12,601	)		(6,751	)		(33,295	)		(11,841	)		11,841			-
Change in deferred lease liability		3,136			2,161			2,812			2,412			10,521			1,726			1,456			1,824
Change in fair value of derivatives and amortization		2,640			2,207			176			(905	)		4,118			8			2,635			1,508
Loss (gain) on sale of assets		144			-			1,404			(4,057	)		(2,509	)		(1,315	)		-			135
Gain on acquisition		-			-			-			-			-			-			-			(3,520	)
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			4,555			5,221
Changes in operating assets and liabilities:
Accounts receivable, net		(5,242	)		4,367			(5,605	)		(1,476	)		(7,956	)		(105	)		1,728			(3,998	)
Prepaid expenses and other assets, net		(9,171	)		(5,160	)		(1,008	)		(6,711	)		(22,050	)		460			1,477			(11,425	)
Accounts payable and accrued expenses		(11,825	)		2,035			15,511			(17,496	)		(11,775	)		8,453			(7,136	)		1,509
Tenant refundable fees and security deposits		(1,298	)		(971	)		(451	)		(438	)		(3,158	)		310			(287	)		(1,964	)
Deferred revenue		8,365			(3,735	)		(4,635	)		(1,730	)		(1,735	)		11,269			(6,921	)		(739	)
Net cash provided by operating activities		47,129			67,642			64,384			49,089			228,244			92,666			64,686			54,650
Cash Flows from Investing Activities
Decrease (increase) in lease security deposits and lease acquisition deposits, net		801			-			1,266			(4,242	)		(2,175	)		941			(1,313	)		(1,219	)
(Increase) decrease in cash and escrow deposits — restricted		(30,556	)		(5,804	)		33,793			7,272			4,705			54,455			3,841			(2,052	)
Net proceeds from the sale of assets		1,487			-			-			10,592			12,079			23,147			5,885			1,785
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	)		(39,340	)		(46,659	)
Purchase of marketable securities — restricted		-			-			-			-			-			(26,409	)		(6,315	)		-
Sale of marketable securities — restricted		-			-			-			-			-			809			608			(2	)
Acquisition of assets, net of related payables and cash received		-			(21,809	)		(4,307	)		(31,832	)		(57,948	)		(51,330	)		(3,178	)		(89	)
Purchase of Horizon Bay Realty, L.L.C., net of cash acquired		-			-			-			-			-			-			-			5,516
Receipt of (issuance of) notes receivable, net		512			(343	)		844			66			1,079			403			-			1,271
Investment in unconsolidated ventures		(848	)		(205	)		394			(1	)		(660	)		-			-			(13,711	)
Distributions received from unconsolidated ventures		47			-			30			20			97			60			56			40
Proceeds from sale of unconsolidated venture		-			-			675			-			675			-			-			-
Other		(316	)		-			(322	)		(38	)		(676	)		(164	)		(304	)		(353	)
Net cash (used in) provided by investing activities		(51,975	)		(50,569	)		7,279			(41,240	)		(136,505	)		(26,677	)		(40,060	)		(55,473	)
Cash Flows from Financing Activities
Proceeds from debt		49,108			119,576			213,392			32,719			414,795			28,000			2,417			447,108
Proceeds from issuance of convertible notes, net		-			-			-			-			-			-			308,335			(102	)
Issuance of warrants		-			-			-			-			-			-			45,066			-
Purchase of bond hedge		-			-			-			-			-			-			(77,007	)		-
Repayment of debt and capital lease obligations		(58,923	)		(134,031	)		(251,986	)		(31,587	)		(476,527	)		(134,550	)		(283,626	)		(461,397	)
Proceeds from line of credit		45,000			15,000			-			-			60,000			40,000			15,000			65,000
Repayment of line of credit		(30,000	)		(30,000	)		-			-			(60,000	)		(40,000	)		(15,000	)		(30,000	)
Payment of financing costs, net of related payables		(2,776	)		(3,268	)		(2,392	)		(105	)		(8,541	)		(2,575	)		(910	)		(4,685	)
Other		(181	)		137			(546	)		(173	)		(763	)		(184	)		(148	)		(122	)
Refundable entrance fees:
Proceeds from refundable entrance fees		8,442			6,619			12,242			9,117			36,420			6,080			5,310			7,204
Refunds of entrance fees		(5,762	)		(5,360	)		(4,984	)		(4,954	)		(21,060	)		(4,930	)		(6,481	)		(5,475	)
Cash portion of loss on extinguishment of debt		(179	)		-			-			-			(179	)		(2,861	)		(14,153	)		(26	)
Recouponing and payment of swap termination		(640	)		(14	)		(19,773	)		-			(20,427	)		(64	)		(35	)		-
Purchsae of treasury stock		-			-			-			-			-			-			-			(17,613	)
Net cash provided by (used in) financing activities		4,089			(31,341	)		(54,047	)		5,017			(76,282	)		(111,084	)		(21,232	)		(108	)
Net (decrease) increase in cash and cash equivalents		(757	)		(14,268	)		17,616			12,866			15,457			(45,095	)		3,394			(931	)
Cash and cash equivalents at beginning of period		66,370			65,613			51,345			68,961			66,370			81,827			36,732			40,126
Cash and cash equivalents at end of period	$	65,613		$	51,345		$	68,961		$	81,827		$	81,827		$	36,732		$	40,126		$	39,195