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 2, 2012 (May 2, 2012)

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 2, 2012, Brookdale Senior Living Inc. (the “Company”) issued a press release announcing its first quarter 2012 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 2012 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 2, 2012
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 2, 2012	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 2, 2012.
99.2	Supplemental Information.

EX-99.1

FOR IMMEDIATE RELEASE

Contact:

Brookdale Senior Living Inc.

Ross Roadman  615-564-8104

Brookdale Announces First Quarter 2012 Results

Nashville, TN.  May 2, 2012 – Brookdale Senior Living Inc. (NYSE: BKD) (the “Company”) today reported financial and operating results for the first quarter of 2012.

· Cash From Facility Operations (“CFFO”) was $58.5 million, or $0.48 per share, excluding $3.9 million of integration and transaction-related costs in the first quarter of 2012.

· Average occupancy was 87.8%, a 60 basis point increase from 87.2% in the first quarter of 2011 and flat with the fourth quarter of 2011.

· Average monthly revenue per unit improved by 1.6% to $4,684 for the first quarter of 2012 from $4,609 for the first quarter of 2011.

· Resident and management fee revenue for the first quarter increased $35.4 million, or 6.2%, from the first quarter of 2011.

· Adjusted EBITDA was $100.5 million, excluding integration and transaction-related costs in the first quarter of 2012, as compared to $102.8 million in the first quarter of 2011.

Bill Sheriff, Brookdale’s CEO, said, “The first quarter of 2012 proved to be a very solid start to the year. We are encouraged by the occupancy and rate growth trends we experienced. Occupancy was up 60 basis points over last year’s first quarter and was flat sequentially – a good accomplishment given historical seasonal patterns.  Underlying pricing remained steady as same community revenue per unit for the senior housing business, excluding skilled nursing and ancillary services, increased 2.3% versus the prior year. We also made significant progress in several key initiatives, including growth of our ancillary services footprint and integration of the Horizon Bay communities.  We are confident we are positioning Brookdale to provide the best of service and value to our residents and attractive returns to our shareholders.”

Mark Ohlendorf, Co-President and CFO of Brookdale, commented, “The Company’s cash generation, balance sheet and access to capital should provide us with the ability to execute on acquisition opportunities as they become available, and more importantly to invest in our own assets to enhance returns and CFFO.  Our top capital deployment priority remains reinvestment in our existing portfolio through our Program Max initiative, where we expect to generate double digit returns.”

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Financial Results

Total revenue for the first quarter was $683.5 million, an increase of $96.6 million, or 16.5%, from the first quarter of 2011.  Resident and management fee revenue for the first quarter increased $35.4 million, or 6.2%, from the first quarter of 2011.  Revenue from “reimbursed costs incurred on behalf of managed communities” increased $61.2 million, primarily due to the addition of managed communities from the Horizon Bay acquisition.

Beginning October 1, 2011, the Company was impacted by a reduction in the reimbursement rate for Medicare skilled nursing patients and home health patients as well as a negative change in the allowable method for delivering therapy services to skilled nursing patients.  For the first quarter, the negative financial impact of these changes was approximately $7.2 million of revenue (composed of $4.8 million for the Medicare skilled nursing reimbursement rate reduction and approximately $2.4 million for the Medicare home health rate reduction) and approximately $1.6 million of expense for the increased therapy labor required.  This impact is reflected in the financial results presented throughout this release and, in particular, increased expense and decreased revenue, Facility Operating Income, Adjusted EBITDA and Cash From Facility Operations.

Average monthly revenue per unit was $4,684 in the first quarter, an increase of $75, or 1.6%, over the first quarter of 2011.  Average occupancy for all consolidated communities for the first quarter of 2012 was 87.8%, compared to 87.2% for the first quarter of 2011 and 87.8% for the fourth quarter of 2011.  For the managed community portfolio, average occupancy for the first quarter was 84.3%.

Facility operating expenses for the first quarter were $399.2 million, an increase of $28.3 million, or 7.6%, from the first quarter of 2011.  Expenses from “reimbursed costs incurred on behalf of managed communities” increased $61.2 million, primarily due to the addition of managed communities from the Horizon Bay acquisition.

General and administrative expenses for the first quarter were $45.0 million.  Excluding integration and transaction-related costs of $3.9 million from the first quarter of 2012 and non-cash stock-based compensation expense from both periods, general and administrative expenses were $34.6 million in the first quarter of 2012 versus $29.0 million for the prior year same period.  Demonstrating the Company’s efficient platform, this was 4.6% of revenue (including revenues under management) in the first quarter of 2012.

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.  First quarter Adjusted EBITDA and Cash From Facility Operations included integration and transaction-related costs of $3.9 million.  Brookdale also uses Facility Operating Income to assess the performance of its communities.

For the quarter ended March 31, 2012, Facility Operating Income was $191.2 million, a decrease of $0.1 million from the first quarter of 2011, and Adjusted EBITDA was $100.5 million,

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excluding the integration and transaction-related costs in 2012, a decrease of $2.3 million, or 2.2%, over the first quarter of 2011.  Cash From Facility Operations was $54.6 million for the first quarter of 2012, or $0.45 per share, and, excluding the integration and transaction-related costs, was $58.5 million for the first quarter of 2012, or $0.48 per share, a decrease of $3.3 million, or 5.3%, from CFFO of $61.8 million, or $0.51 per share, for the first quarter of 2011.

Net loss for the first quarter of 2012 was $(10.3) million, or $(0.09) 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, loss on acquisition, gain on facility lease termination and straight-line lease expense, net of deferred gain amortization.

Operating Activities

For the quarter ended March 31, 2012, same community revenues grew 2.1% over the same period in 2011 as revenue per unit increased by 1.5% and occupancy grew by 0.5%.  Same community Facility Operating Income for the quarter decreased by 2.4% when compared to the first quarter of 2011 as expenses grew by 4.4%.

The same community results for senior housing, excluding ancillary services, for the three months ended March 31, 2012 showed revenues grew 1.7% over the corresponding period in 2011 as revenue per unit increased by 1.1%.  Same community Facility Operating Income for senior housing (excluding ancillary services) decreased by 0.5% over the first quarter of 2011. Excluding the change in Medicare skilled nursing due to reimbursement rate reductions and elimination of group therapy, same community senior housing revenue per unit increased by 1.9% and same community senior housing Facility Operating Income increased by 2.7% over the corresponding period in 2011.

By the end of the first quarter, the Company’s ancillary services programs provided outpatient therapy services to approximately 35,900 Brookdale units.  At the end of the quarter, the Company’s home health agencies were serving approximately 32,600 units across the total consolidated Brookdale portfolio, up from approximately 27,000 units served a year ago.  Outpatient therapy and home health services produced $110 of monthly Facility Operating Income per occupied unit in the first quarter across all units served, down from $156 per month a year ago, driven primarily by reimbursement rate reductions and the start-up of new operations in Horizon Bay communities.

Balance Sheet

Brookdale had $42.1 million of unrestricted cash and cash equivalents and $93.8 million of restricted cash on its balance sheet at the end of the first quarter.  As of March 31, 2012, the Company had an available secured line of credit with a $230.0 million commitment and $199.8 million of availability (of which $85.0 million had been drawn as of that date).  The Company also had secured and unsecured letter of credit facilities of up to $82.7 million in the aggregate as of March 31, 2012.  $77.8 million of letters of credit had been issued under these facilities as of that date.

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On January 5, 2012, the Company obtained a $63.0 million first mortgage loan, secured by one of the Company’s communities.  The loan bears interest at a variable rate equal to 30-day LIBOR plus a margin of 300 basis points and matures in January 2017.  In connection with the transaction, the Company repaid $62.8 million of existing variable rate debt.

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, 1,217,100 shares had been purchased as of March 31, 2012, at a cost of approximately $17.6 million, or a weighted average price of approximately $14.44 per share.  No shares were purchased during the first quarter.  As of March 31, 2012, approximately $82.4 million remains available under this share repurchase authorization.

Acquisitions

As previously announced, effective February 2, 2012, the Company acquired the underlying real estate associated with nine communities that were previously leased for an aggregate purchase price of $121.3 million. The Company financed the transaction with $77.9 million of first mortgage financing secured by seven of the communities and $15.0 million of seller-financing secured by two of the communities.  The $77.9 million first mortgage facility has a ten year term.  75% of the facility bears interest at a fixed rate of 4.2% and the remaining 25% of the facility bears interest at a variable rate of 30 day LIBOR plus a margin of 276 basis points.  The $15.0 million mortgage loan has a two year term and bears interest at a fixed rate of 7.0%.

During the three months ended March 31, 2012, the Company purchased two home health agencies as part of its growth strategy for an aggregate purchase price of approximately $3.7 million.

2012 Outlook

For the full year 2012, the Company continues to expect Cash From Facility Operations to range between $2.10 and $2.20 per share (excluding integration and transaction-related costs).  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 2012 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 review the financial results of its first quarter ended March 31, 2012 on Thursday, May 3, 2012 at 9:30 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 First Quarter Earnings Call.”

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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 May 10, 2012 by dialing (855) 859-2056(from within the U.S.) or (404) 537-3406(from outside of the U.S.) and referencing access code “73380621”.  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 646 communities in 35 states and the ability to serve approximately 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 our operational initiatives and our expectations regarding their effect on our results; our expectations regarding the economy, 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, returns on re-invested capital and CFFO; our belief regarding the value of our common stock and our expectations regarding returns to shareholders and our growth prospects; our expectations concerning the future performance of recently acquired communities and the effects of acquisitions on our financial results; 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) and their effect on our results; our expectations regarding changes in government reimbursement programs and their effect on our results (including all statements relating to our expectations regarding the effect of recent Medicare reimbursement rate and therapy service delivery changes on our results and cash flow); 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

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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 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; the risk that we may not be able to expand, redevelop and reposition our communities in accordance with our plans; 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

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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 per share data)

	Three Months Ended
	March 31,
	2012			2011
Revenue
Resident fees	$	596,886		$	568,035
Management fees		7,924			1,405
Reimbursed cost incurred on behalf of managed communities		78,715			17,480
Total revenue		683,525			586,920
Expense
Facility operating expense (excluding depreciation and amortization of $57,936 and $58,959, respectively)		399,249			370,954
General and administrative expense (including non-cash stock-based compensation expense of $6,435 and $4,540, respectively)		44,973			33,543
Facility lease expense		71,445			66,315
Depreciation and amortization		63,344			71,782
Asset impairment		1,083			14,846
Loss on acquisition		636			-
Gain on facility lease temination		(2,780	)		-
Costs incurred on behalf of managed communities		78,715			17,480
Total operating expense		656,665			574,920
Income from operations		26,860			12,000
Interest income		852			625
Interest expense:
Debt		(32,050	)		(31,561	)
Amortization of deferred financing costs and debt discount		(4,473	)		(2,704	)
Change in fair value of derivatives and amortization		(233	)		(8	)
Loss on extinguishment of debt, net		(221	)		(2,894	)
Equity in earnings of unconsolidated ventures		99			266
Other non-operating (loss) income		(111	)		817
Loss before income taxes		(9,277	)		(23,459	)
(Provision) benefit for income taxes		(1,061	)		11,154
Net loss		(10,338	)		(12,305	)
Basic and diluted loss per share	$	(0.09	)	$	(0.10	)
Weighted average shares used in computing basic and diluted net loss per share		121,145			120,792

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Condensed Consolidated Balance Sheets

(Audited, in thousands)

	March 31, 2012		December 31, 2011
	(Unaudited)
Cash and cash equivalents	$	42,113	$	30,836
Cash and escrow deposits - restricted		44,867		45,903
Accounts receivable, net		102,568		98,697
Other current assets		107,993		105,439
Total current assets		297,541		280,875
Property, plant and equipment and leasehold intangibles, net		3,793,384		3,694,064
Other assets, net		485,184		491,122
Total assets	$	4,576,109	$	4,466,061
Current liabilities	$	687,513	$	620,950
Long-term debt, less current portion		2,465,926		2,415,971
Other liabilities		384,854		388,932
Total liabilities		3,538,293		3,425,853
Stockholders’ equity		1,037,816		1,040,208
Total liabilities and stockholders’ equity	$	4,576,109	$	4,466,061

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Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Three Months Ended March 31,
	2012			2011
Cash Flows from Operating Activities
Net loss	$	(10,338	)	$	(12,305	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on extinguishment of debt		221			2,894
Depreciation and amortization		67,817			74,486
Asset impairment		1,083			14,846
Equity in earnings of unconsolidated ventures		(99	)		(266	)
Distributions from unconsolidated ventures from cumulative share of net earnings		206			-
Amortization of deferred gain		(1,093	)		(1,093	)
Amortization of entrance fees		(6,403	)		(5,762	)
Proceeds from deferred entrance fee revenue		7,000			6,361
Deferred income tax benefit		(4	)		(11,841	)
Change in deferred lease liability		1,642			1,726
Change in fair value of derivatives and amortization		233			8
Loss (gain) on sale of assets		114			(1,315	)
Loss on acquisition		636			-
Gain on facility lease termination		(2,780	)		-
Non-cash stock-based compensation		6,435			4,540
Changes in operating assets and liabilities:
Accounts receivable, net		(5,317	)		(105	)
Prepaid expenses and other assets, net		(3,621	)		(7,104	)
Accounts payable and accrued expenses		(23,705	)		8,453
Tenant refundable fees and security deposits		(442	)		310
Deferred revenue		12,168			11,269
Other		1,940			7,564
Net cash provided by operating activities		45,693			92,666
Cash Flows from Investing Activities
(Increase) decrease in lease security deposits and lease acquisition deposits, net		(2,217	)		941
Decrease in cash and escrow deposits — restricted		8,442			54,455
Purchase of marketable securities — restricted		(399	)		(26,409	)
Sale of marketable securities — restricted		-			809
Additions to property, plant and equipment and leasehold intangibles, net of related payables		(41,533	)		(28,589	)
Acquisition of assets, net of related payables and cash received		(104,984	)		(51,330	)
(Issuance of) payment on notes receivable, net		(439	)		403
Distributions received from unconsolidated ventures		100			60
Proceeds from sale of assets		-			23,147
Other		(362	)		(164	)
Net cash used in investing activities		(141,392	)		(26,677	)
Cash Flows from Financing Activities
Proceeds from debt		175,838			28,000
Repayment of debt and capital lease obligations		(86,068	)		(134,550	)
Proceeds from line of credit		130,000			40,000
Repayment of line of credit		(110,000	)		(40,000	)
Payment of financing costs, net of related payables		(2,378	)		(2,575	)
Other		(86	)		(184	)
Refundable entrance fees:
Proceeds from refundable entrance fees		7,989			6,080
Refunds of entrance fees		(8,102	)		(4,930	)
Cash portion of loss on extinguishment of debt		(118	)		(2,861	)
Recouponing and payment of swap termination		(99	)		(64	)
Net cash provided by (used in) financing activities		106,976			(111,084	)
Net increase (decrease) in cash and cash equivalents		11,277			(45,095	)
Cash and cash equivalents at beginning of period		30,836			81,827
Cash and cash equivalents at end of period	$	42,113		$	36,732

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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  gain (loss) on facility lease termination), 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 (i) first generation entrance fee receipts from the sale of units at a recently opened entrance fee CCRC prior to stabilization and (ii) first generation entrance fee refunds not replaced by second generation entrance fee receipts at the recently opened community prior to stabilization).

In the first quarter of 2012, we revised the definition of Adjusted EBITDA to clarify the point at which first generation entrance fee receipts and refunds at recently opened entrance fee CCRCs will be included.  We determine the stabilization date of recently opened entrance fee communities to be the first day of the first full fiscal quarter occurring two years subsequent to the community’s opening date for occupancy of all levels of care on the campus.

As a result of this change, we will prospectively include all net entrance fee activity from a recently opened entrance fee CCRC in our non-GAAP financial measures.  For the three months ended March 31, 2012, first generation net entrance fee receipts which would have been excluded under the previous definition of Adjusted EBITDA were $0.5 million.

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, 2012 and 2011 (in thousands):

	Three Months Ended March 31,(1)
	2012			2011
Net loss	$	(10,338	)	$	(12,305	)
Provison (benefit) for income taxes		1,061			(11,154	)
Equity in earnings of unconsolidated ventures		(99	)		(266	)
Loss on extinguishment of debt, net		221			2,894
Other non-operating loss (income)		111			(817	)
Interest expense:
Debt		24,340			23,553
Capitalized lease obligation		7,710			8,008
Amortization of deferred financing costs and debt discount		4,473			2,704
Change in fair value of derivatives and amortization		233			8
Interest income		(852	)		(625	)
Income from operations		26,860			12,000
Gain on facility lease termination		(2,780	)		-
Loss on acquisition		636			-
Depreciation and amortization		63,344			71,782
Asset impairment		1,083			14,846
Straight-line lease expense		1,642			1,726
Amortization of deferred gain		(1,093	)		(1,093	)
Amortization of entrance fees		(6,403	)		(5,762	)
Non-cash stock-based compensation expense		6,435			4,540
Entrance fee receipts(2)		14,989			12,441
First generation entrance fees received (3)		-			(2,729	)
Entrance fee disbursements		(8,102	)		(4,930	)
Adjusted EBITDA	$	96,611		$	102,821

(1) The calculation of Adjusted EBITDA includes integration and transaction-related costs of $3.9 million for the three months ended March 31, 2012. There were no such costs for the three months ended March 31, 2011.

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

(3) First generation entrance fees received represents initial entrance fees received from the sale of units at a recently opened entrance fee CCRC prior to stabilization. 

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 at a recently opened entrance fee CCRC prior to stabilization, entrance fee refunds disbursed adjusted for first generation entrance fee refunds not replaced by second generation entrance fee receipts at the recently opened community prior to stabilization, lease financing debt amortization with fair market value or no purchase options, gain (loss) on facility lease termination, recurring capital expenditures (net), distributions from unconsolidated ventures from cumulative share of net earnings, CFFO from unconsolidated ventures, and other.

Page 12 of 15

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.

In the first quarter of 2012, we revised the definition of CFFO to clarify the point at which first generation entrance fee receipts and refunds at recently opened entrance fee CCRCs will be included.  We determine the stabilization date of recently opened entrance fee communities to be the first day of the first full fiscal quarter occurring two years subsequent to the community’s opening date for occupancy of all levels of care on the campus.

As a result of this change, we will prospectively include all net entrance fee activity from a recently opened entrance fee CCRC in our non-GAAP financial measures.  For the three months ended March 31, 2012, first generation net entrance fee receipts which would have been excluded under the previous definition of CFFO were $0.5 million.

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, 2012 and 2011 (in thousands):

	Three Months Ended March 31,(1)
	2012			2011
Net cash provided by operating activities	$	45,693		$	92,666
Changes in operating assets and liabilities		18,977			(20,387	)
Refundable entrance fees received(2)		7,989			6,080
First generation entrance fees received (3)		-			(2,729	)
Entrance fee refunds disbursed		(8,102	)		(4,930	)
Recurring capital expenditures, net		(8,064	)		(7,057	)
Lease financing debt amortization with fair market value or no purchase options		(2,929	)		(2,533	)
Distributions from unconsolidated ventures from cumulative share of net earnings		(206	)		-
CFFO from unconsolidated ventures		1,228			641
Cash From Facility Operations	$	54,586		$	61,751

(1) The calculation of CFFO includes integration and transaction-related costs of $3.9 million for the three months ended March 31, 2012. There were no such costs for the three months ended March 31, 2011.

(2) Total entrance fee receipts for the three months ended March 31, 2012 and 2011 were $15.0 million and $12.4 million, respectively, including $7.0 million and $6.4 million, respectively, of non-refundable entrance fee receipts included in net cash provided by operating activities.

Page 13 of 15

(3) First generation entrance fees received represents initial entrance fees received from the sale of units at a recently opened entrance fee CCRC prior to stabilization. 

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 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 gain (loss) on facility lease termination), 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, 2012 and 2011 (in thousands):

Page 14 of 15

	Three Months Ended March 31,
	2012			2011
Net loss	$	(10,338	)	$	(12,305	)
Provision (benefit) for income taxes		1,061			(11,154	)
Equity in earnings of unconsolidated ventures		(99	)		(266	)
Loss on extinguishment of debt, net		221			2,894
Other non-operating loss (income)		111			(817	)
Interest expense:
Debt		24,340			23,553
Capitalized lease obligation		7,710			8,008
Amortization of deferred financing costs and debt discount		4,473			2,704
Change in fair value of derivatives and amortization		233			8
Interest income		(852	)		(625	)
Income from operations		26,860			12,000
Gain on facility lease termination		(2,780	)		-
Depreciation and amortization		63,344			71,782
Asset impairment		1,083			14,846
Loss on acquisition		636			-
Facility lease expense		71,445			66,315
General and administrative (including non-cash stock-based compensation expense)		44,973			33,543
Amortization of entrance fees		(6,403	)		(5,762	)
Management fees		(7,924	)		(1,405	)
Facility Operating Income	$	191,234		$	191,319

Page 15 of 15

EX-99.2

Brookdale Senior Living Inc.

Corporate Overview - selected financial information

As of March 31, 2012

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, 2012, the Company operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 646 communities in 35 states and the ability to serve approximately 67,000 residents.

Stock Listing

Common Stock

NYSE: BKD

Community Information

Ownership Type	Number of Facilities		Number of Units		Percentage of Q1 2012 Revenues			Percentage of Q1 2012 Facility Operating Income
Owned		209		22,085		39.0	%		40.2	%
Leased		341		26,699		48.3	%		55.9	%
Managed		96		18,203		12.7	%		3.9	%
Total		646		66,987		100.0	%		100.0	%
Operating Type
Retirement Centers		76		14,547		20.3	%		26.4	%
Assisted Living		434		21,678		40.4	%		46.6	%
CCRCs		40		12,559		26.6	%		23.1	%
Managed		96		18,203		12.7	%		3.9	%
Total		646		66,987		100.0	%		100.0	%

CFFO Per Share

($ except where indicated)	FY 2011										FY 2012
		Q1		Q2		Q3		Q4	Full Year(1)			Q1
Reported CFFO	$	0.51	$	0.51	$	0.49	$	0.47	$	1.98	$	0.45
Add: integration and transaction-related costs		-		0.01		0.05		0.07	$	0.13		0.03
Adjusted CFFO	$	0.51	$	0.52	$	0.54	$	0.54	$	2.11	$	0.48
Weighted average shares (000's)		120,792		121,280		121,616		120,951				121,145
Period end outstanding shares (excluding unvested restricted shares) (000's)		120,835		121,973		120,911		121,133				121,197
(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 first quarter earnings release for non-GAAP financial measure definitions and reconciliations.

Brookdale Senior Living Inc.

Operating Segment Information

As of March 31, 2012

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

	FY 2011															FY 2012
		Q1			Q2			Q3			Q4		Full Year				Q1
Retirement Centers
Number of communities (period end)		75			74			76			76			76			76
Total average units(1)		14,104			14,050			14,131			14,468			14,188			14,452
Weighted average unit occupancy		87.3	%		87.3	%		88.4	%		88.9	%		88.0	%		88.8	%
Average monthly revenue per unit(2)	$	3,482		$	3,501		$	3,524		$	3,544		$	3,513		$	3,609
Assisted Living
Number of communities (period end)		428			428			433			434			434			434
Total average units(1)		21,295			21,145			21,265			21,589			21,323			21,635
Weighted average unit occupancy		88.2	%		87.4	%		88.4	%		88.7	%		88.2	%		88.5	%
Average monthly revenue per unit(2)	$	4,705		$	4,722		$	4,717		$	4,703		$	4,712		$	4,813
CCRCs
Number of communities (period end)		36			36			40			40			40			40
Total average units(1)		11,211			11,212			11,395			11,785			11,401			11,797
Weighted average unit occupancy		85.3	%		84.4	%		84.4	%		84.9	%		84.8	%		85.3	%
Average monthly revenue per unit(2)	$	5,873		$	5,874		$	5,906		$	5,705		$	5,838		$	5,810
Consolidated Totals
Number of communities (period end)		539			538			549			550			550			550
Total average units(1)		46,610			46,407			46,791			47,842			46,912			47,884
Weighted average unit occupancy		87.2	%		86.6	%		87.4	%		87.8	%		87.3	%		87.8	%
Average monthly revenue per unit(2)	$	4,609		$	4,620		$	4,632		$	4,587		$	4,612		$	4,684
Management Services - Total
Number of communities (period end)		19			19			98			97			97			96
Total average units(1)		3,784			3,785			8,649			18,328			8,636			18,253
Weighted average occupancy		84.7	%		84.8	%		84.3	%		84.4	%		84.5	%		84.3	%
Average monthly revenue per unit(2)	$	3,778		$	3,836		$	3,484		$	3,344		$	3,480		$	3,373

(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, 2012

Same Community Information

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

	Three Months Ended March 31,
	2012			2011			% Change
Revenue	$	557,295		$	546,026			2.1	%
Operating Expense		374,530			358,700			4.4	%
Facility Operating Income	$	182,765		$	187,326			-2.4	%
Facility Operating Margin		32.8	%		34.3	%		-1.5	%
# Communities		532			532
Avg. Period Occupancy		87.9	%		87.4	%		0.5	%
Avg. Mo. Revenue/Unit	$	4,661		$	4,594			1.5	%

Schedule of Capital Expenditures

($ in 000s)

	Three Months Ended March 31,
	2012			2011
Type
Recurring	$	8,564		$	7,882
Reimbursements		(500	)		(825	)
Net Recurring		8,064			7,057
Corporate (1)		6,705			4,354
EBITDA-enhancing / Major Projects (2)		13,673			10,423
Program Max / Development, net (3)		13,091			6,755
Net Total Capital Expenditures (4)	$	41,533		$	28,589

(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 $0.4 million for the three months ended March 31, 2012.  No lender or lessor funding was received for the three months ended March 31, 2011.

(4)  Approximately $11.4 million and $9.5 million of expense was recognized during the three months ended March 31, 2012 and 2011, 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,
	2012		2011
Brookdale Units Served:
Therapy		42,558		38,459
Therapy consolidated		35,909		35,428
Home Health		37,390		30,365
Home Health consolidated		32,655		27,277
Avg. Mo. NOI/Occupied Unit Served:
Outpatient Therapy and Home Health Only	$	110	$	156

Brookdale Senior Living Inc.

Capital Structure - selected financial information

As of March 31, 2012

($ 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
2012	$	21,919		3.65	%	$	-		-		$	21,919		3.65	%	$	19,684		8.38	%	$	41,603
2013		511,954		3.53	%		-		-			511,954		3.53	%		29,468		8.40	%		541,422
2014		164,007		5.82	%		-		-			164,007		5.82	%		31,259		8.44	%		195,266
2015		38,593		5.64	%		-		-			38,593		5.64	%		32,909		8.48	%		71,502
2016		33,895		5.16	%		85,000		6.50	%		118,895		6.12	%		30,308		8.60	%		149,203
Thereafter		1,393,231		4.19	%		-		-			1,393,231		4.19	%		199,015		8.72	%		1,592,246
Total	$	2,163,599		4.19	%	$	85,000		6.50	%	$	2,248,599		4.28	%	$	342,643		8.62	%	$	2,591,242
	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
2012	$	21,919		3.65	%	$	-		-		$	21,919		3.65	%	$	19,684		8.38	%	$	41,603
2013		305,926		3.02	%		-		-			305,926		3.02	%		29,468		8.40	%		335,394
2014		24,952		5.68	%		-		-			24,952		5.68	%		31,259		8.44	%		56,211
2015		179,918		5.76	%		-		-			179,918		5.76	%		32,909		8.48	%		212,827
2016		35,287		5.08	%		85,000		6.50	%		120,287		6.08	%		30,308		8.60	%		150,595
Thereafter		1,595,597		4.21	%		-		-			1,595,597		4.21	%		199,015		8.72	%		1,794,612
Total	$	2,163,599		4.19	%	$	85,000		6.50	%	$	2,248,599		4.28	%	$	342,643		8.62	%	$	2,591,242

Coverage Ratios

	Three months ended March 31, 2012
							Interest/Cash Lease
	Units		FOI		Adj. FOI **		Payments		Coverage
Owned communities		22,085		82,698		67,423		24,340		2.8	x
Leased communities *		26,699		114,939		96,102		78,693		1.2	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,
		2012	2011
Scheduled debt amortization	$	11,596	$	7,292
Lease financing debt amortization - FMV or no purchase option(4)		2,929		2,533
Lease financing debt amortization - bargain purchase option		3,442		3,054
Total debt amortization	$	17,967	$	12,879

Line Availability

($000s)	12/31/10		03/31/11		06/30/11		09/30/11		12/31/11		03/31/12
Total line commitment	$	120,000	$	230,000	$	230,000	$	230,000	$	230,000	$	230,000
Line availability (7)	$	113,025	$	182,053	$	172,105	$	162,057	$	194,165	$	199,786
Ending line balance		-		-		-		35,000		65,000		85,000
Available to draw	$	113,025	$	182,053	$	172,105	$	127,057	$	129,165	$	114,786
Cash and cash equivalents		81,827		36,732		40,126		39,195		30,836		42,113
Total liquidity (available to draw + cash)	$	194,852	$	218,785	$	212,231	$	166,252	$	160,001	$	156,899
Total letters of credit outstanding	$	72,012	$	71,878	$	72,051	$	71,785	$	78,104	$	77,754

Leverage Ratios
				Annualized
	Balance			Leverage
Debt (1)	$	2,163,599
Capital leases		342,643
Total Debt	$	2,506,242		6.5	x
Plus: Line of credit (cash borrowings)		85,000
Less: Unrestricted cash		(42,113	)
Less: Cash held as collateral against existing debt		(3,869	)
Subtotal	$	2,545,260		6.6	x
2012 YTD annualized Adjusted EBITDA	$	386,444
Annual cash lease expense multiplied by 8		2,268,672
Total adjusted debt	$	4,813,932		7.2	x
2012 YTD annualized Adjusted EBITDAR	$	670,028

Debt Structure
			weighted
	Balance		rate (2)
Fixed rate debt (1)	$	1,494,049		4.96	%
Variable rate debt (1)		669,550		2.48	%
Capital leases		342,643		8.62	%
Line of credit (cash borrowings)		85,000		6.50	%
Total debt	$	2,591,242
	Balance		% of total
Variable rate debt with interest rate swaps (1) (5)	$	27,660		4.1	%
Variable rate debt with interest rate caps (1) (6)		410,263		61.3	%
Variable rate debt - unhedged (1)		231,627		34.6	%
Total variable rate debt (1)	$	669,550		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 5.49%.

(6) Weighted cap rate for stated reporting period of 5.49% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.

(7) The actual amount available to borrow 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 March 31, 2012

 ($ 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 March 31, 2012

CFFO Calculation
($ in 000s)
	Three Months Ended March 31,
	2012			2011
Net cash provided by operating activities (includes non-refundable entrance fees)	$	45,693		$	92,666
Changes in operating assets and liabilities (eliminates cash flow effect)		18,977			(20,387	)
Add: Refundable entrance fees received		7,989			6,080
Less:  First generation entrance fees received		-			(2,729	)
Less: Entrance fee refunds disbursed		(8,102	)		(4,930	)
Less: Recurring capital expenditures, net		(8,064	)		(7,057	)
Less: Lease financing debt amortization with fair market value or no purchase options		(2,929	)		(2,533	)
Less: Distributions from unconsolidated ventures from cumulative share of net earnings		(206	)		-
Add: CFFO from unconsolidated ventures		1,228			641
Cash From Facility Operations	$	54,586		$	61,751
Add: Integration and transaction-related costs		3,904			-
Adjusted Cash From Facility Operations	$	58,490		$	61,751

Revenue Reconciliation (1)
($ in 000s except average monthly revenue per quarter)	FY 2011															FY 2012
		Q1			Q2			Q3			Q4		Full Year				Q1
Revenue reconciliation excl. entrance fee amortization
Average monthly revenue per quarter		4,609			4,620			4,632			4,587			4,612			4,684
Average monthly units (excluding equity homes) available		46,634			46,433			46,822			47,848			46,908			47,860
Average occupancy for the quarter		87.2	%		86.6	%		87.4	%		87.8	%		87.3	%		87.8	%
Resident fee revenue	$	562,273		$	557,319		$	568,660		$	578,104		$	2,266,356		$	590,483
Add:  management fee revenue		1,405			1,505			3,336			7,349			13,595			7,924
Total revenues excluding entrance fee amortization	$	563,678		$	558,824		$	571,996		$	585,453		$	2,279,951		$	598,407
CFFO Reconciliation to the Income Statement
Resident and management fee revenue	$	569,440		$	565,428		$	578,495		$	591,989		$	2,305,352		$	604,810
Less: Entrance fee amortization		(5,762	)		(6,604	)		(6,499	)		(6,536	)		(25,401	)		(6,403	)
Adjusted revenues		563,678			558,824			571,996			585,453			2,279,951			598,407
Less: Facility operating expenses		(370,954	)		(366,242	)		(381,414	)		(389,961	)		(1,508,571	)		(399,249	)
Less: G&A including non-cash stock-based compensation expense		(33,543	)		(33,681	)		(38,711	)		(42,392	)		(148,327	)		(44,973	)
Add:  G&A non-cash stock-based compensation expense		4,540			4,555			5,221			5,540			19,856			6,435
Net G&A		(29,003	)		(29,126	)		(33,490	)		(36,852	)		(128,471	)		(38,538	)
Less: Facility lease expense		(66,315	)		(66,065	)		(68,314	)		(74,164	)		(274,858	)		(71,445	)
Add:  Straight-line lease expense		1,726			1,456			1,834			3,592			8,608			1,642
Less: Amortization of deferred gain		(1,093	)		(1,093	)		(1,094	)		(1,093	)		(4,373	)		(1,093	)
Net lease expense		(65,682	)		(65,702	)		(67,574	)		(71,665	)		(270,623	)		(70,896	)
Add:  Entrance fee receipts		9,712			12,454			15,726			17,480			55,372			14,989
Less: Entrance fee disbursements		(4,930	)		(6,481	)		(5,475	)		(8,107	)		(24,993	)		(8,102	)
Net entrance fees		4,782			5,973			10,251			9,373			30,379			6,887
Adjusted EBITDA		102,821			103,727			99,769			96,348			402,665			96,611
Less: Recurring capital expenditures, net		(7,057	)		(9,268	)		(8,675	)		(8,661	)		(33,661	)		(8,064	)
Less: Interest expense, net		(30,936	)		(29,900	)		(29,262	)		(31,237	)		(121,335	)		(31,198	)
Less: Lease financing debt amortization with fair market value or no purchase options		(2,533	)		(2,587	)		(2,645	)		(2,700	)		(10,465	)		(2,929	)
Less: Distributions from unconsolidated ventures from cumulative share of net earnings		-			-			-			(582	)		(582	)		(206	)
Add:  CFFO from unconsolidated ventures		641			661			738			1,249			3,289			1,228
Less: Other		(1,185	)		(1,328	)		196			2,329			12			(856	)
Reported CFFO	$	61,751		$	61,305		$	60,121		$	56,746		$	239,923		$	54,586
Add:  integration and transaction-related costs		-			894			5,468			8,026			14,388			3,904
Adjusted CFFO	$	61,751		$	62,199		$	65,589		$	64,772		$	254,311		$	58,490
CFFO Per Share
($ except where indicated)	FY 2011															FY 2012
		Q1			Q2			Q3			Q4		Full Year(2)				Q1
Reported CFFO	$	0.51		$	0.51		$	0.49		$	0.47		$	1.98		$	0.45
Add:  integration and transaction-related costs		-			0.01			0.05			0.07			0.13			0.03
Adjusted CFFO	$	0.51		$	0.52		$	0.54		$	0.54		$	2.11		$	0.48
Shares used in calculation of CFFO (000's)		120,792			121,280			121,616			120,951						121,145

(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 March 31, 2012

	Q1 11		Q2 11		Q3 11		Q4 11		Q1 12
Occupancy	82.6	%	82.3	%	82.0	%	82.9	%	83.4	%
Ending # EF Vacant Units	594		620		621		616		658
# Closings	53		73		88		85		94
# of Refunds	69		72		73		75		92
Cash Basis ($ in 000's except average resale and refund)
Resale Receipts:
Proceeds from non-refundable entrance fees (1)(2)	4,918		8,305		9,360		8,387		7,000
Proceeds from refundable entrance fees (2)(3)	4,794		4,149		6,366		9,093		7,989
Total Cash Proceeds	9,712		12,454		15,726		17,480		14,989
Refunds of entrance fees (4)(5)	(4,930	)	(6,481	)	(5,475	)	(8,107	)	(8,102	)
Net Resale Cash Flow	4,782		5,973		10,251		9,373		6,887
My Choice proceeds included in refundable resale receipts above	1,144		1,591		2,264		3,994		2,363
Average Resale $ (excluding My Choice proceeds)	161,660		148,808		152,977		158,659		134,319
Average Refund $ (excluding My Choice refunds)	(70,058	)	(81,681	)	(71,863	)	(98,040	)	(84,283	)

Value of Unsold Inventory ($ in 000's except average resale price)
Gross Value @ Average Resale Price of $155,000	101,990
Refund Attachments	(11,401	)
Net Cash Value	90,589

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 11		Q2 11		Q3 11		Q4 11		Q1 12
Amortization of entrance fees (incl. gains on terminations) (6)	(5,204	)	(6,022	)	(5,890	)	(5,869	)	(6,403	)

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 from the sale of units at a recently opened entrance fee CCRC prior to stabilization.  We determine the stabilization date of recently opened entrance fee communities to be the first day of the first full fiscal quarter occurring two years subsequent to the community's opening date for occupancy of all levels of care on the campus.  Stabilization was achieved at a recently opened entrance fee CCRC in Q1 2012.

(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 refunds not replaced by second generation entrance fee receipts at a recently opened entrance fee CCRC prior to stabilization ($0.8 million for the three months ended December 31, 2011).

(6) Excludes first generation entrance fee amortization prior to stabilization (Note 2).

Brookdale Senior Living Inc.

Quarterly Cash Flow Statements

As of March 31, 2012

($ in 000s)

Cash Flow Statements
		Q1 2011			Q2 2011			Q3 2011			Q4 2011		FY 2011				Q1 2012
Cash Flows from Operating Activities
Net loss	$	(12,305	)	$	(33,959	)	$	(7,036	)	$	(14,875	)		(68,175	)	$	(10,338	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on extinguishment of debt		2,894			15,254			715			-			18,863			221
Depreciation and amortization		74,486			72,587			68,381			66,479			281,933			67,817
Asset impairment		14,846			-			-			2,046			16,892			1,083
Equity in (earnings) loss of unconsolidated ventures		(266	)		(146	)		117			(1,137	)		(1,432	)		(99	)
Distributions from unconsolidated ventures from cumulative share of net earnings		-			-			700			582			1,282			206
Amortization of deferred gain		(1,093	)		(1,093	)		(1,094	)		(1,093	)		(4,373	)		(1,093	)
Amortization of entrance fees		(5,762	)		(6,604	)		(6,499	)		(6,536	)		(25,401	)		(6,403	)
Proceeds from deferred entrance fee revenue		6,361			9,299			10,815			11,903			38,378			7,000
Deferred income tax (benefit) provision		(11,841	)		11,841			-			943			943			(4	)
Change in deferred lease liability		1,726			1,456			1,824			3,602			8,608			1,642
Change in fair value of derivatives and amortization		8			2,635			1,508			(273	)		3,878			233
(Gain) loss on sale of assets		(1,315	)		-			135			-			(1,180	)		114
(Gain) loss on acquisition		-			-			(3,520	)		1,538			(1,982	)		636
Gain on facility lease termination		-			-			-			-			-			(2,780	)
Lessor cash reimbursement for tenant incentive		-			-			-			1,251			1,251			-
Non-cash stock-based compensation		4,540			4,555			5,221			5,540			19,856			6,435
Changes in operating assets and liabilities:
Accounts receivable, net		(105	)		1,728			(3,998	)		(2,992	)		(5,367	)		(5,317	)
Prepaid expenses and other assets, net		460			1,477			(11,425	)		(13,446	)		(22,934	)		(1,681	)
Accounts payable and accrued expenses		8,453			(7,136	)		1,509			10,895			13,721			(23,705	)
Tenant refundable fees and security deposits		310			(287	)		(1,964	)		(245	)		(2,186	)		(442	)
Deferred revenue		11,269			(6,921	)		(739	)		(7,757	)		(4,148	)		12,168
Net cash provided by operating activities		92,666			64,686			54,650			56,425			268,427			45,693
Cash Flows from Investing Activities
Decrease (increase) in lease security deposits and lease acquisition deposits, net		941			(1,313	)		(1,219	)		(1,497	)		(3,088	)		(2,217	)
Decrease (increase) in cash and escrow deposits — restricted		54,455			3,841			(2,052	)		(68	)		56,176			8,442
Purchase of marketable securities — restricted		(26,409	)		(6,315	)		-			-			(32,724	)		(399	)
Sale of marketable securities — restricted		809			608			(2	)		16			1,431			-
Additions to property, plant and equipment and leasehold intangibles, net of related payables		(28,589	)		(39,340	)		(46,659	)		(45,543	)		(160,131	)		(41,533	)
Acquisition of assets, net of related payables and cash received		(51,330	)		(3,178	)		(89	)		(34,085	)		(88,682	)		(104,984	)
Purchase of Horizon Bay Realty, L.L.C., net of cash acquired		-			-			5,516			-			5,516			-
Payment on (issuance of) notes receivable, net		403			-			1,271			(190	)		1,484			(439	)
Investment in unconsolidated ventures		-			-			(13,711	)		(279	)		(13,990	)		-
Distributions received from unconsolidated ventures		60			56			40			50			206			100
Net proceeds from sale of assets		23,147			5,885			1,785			-			30,817			-
Other		(164	)		(304	)		(353	)		(93	)		(914	)		(362	)
Net cash (used in) provided by investing activities		(26,677	)		(40,060	)		(55,473	)		(81,689	)		(203,899	)		(141,392	)
Cash Flows from Financing Activities
Proceeds from debt		28,000			2,417			447,108			5,144			482,669			175,838
Proceeds from issuance of convertible notes, net		-			308,335			(102	)		(21	)		308,212			-
Issuance of warrants		-			45,066			-			-			45,066			-
Purchase of bond hedge		-			(77,007	)		-			-			(77,007	)		-
Repayment of debt and capital lease obligations		(134,550	)		(283,626	)		(461,397	)		(18,992	)		(898,565	)		(86,068	)
Proceeds from line of credit		40,000			15,000			65,000			105,000			225,000			130,000
Repayment of line of credit		(40,000	)		(15,000	)		(30,000	)		(75,000	)		(160,000	)		(110,000	)
Payment of financing costs, net of related payables		(2,575	)		(910	)		(4,685	)		(542	)		(8,712	)		(2,378	)
Other		(184	)		(148	)		(122	)		(833	)		(1,287	)		(86	)
Refundable entrance fees:
Proceeds from refundable entrance fees		6,080			5,310			7,204			11,017			29,611			7,989
Refunds of entrance fees		(4,930	)		(6,481	)		(5,475	)		(8,868	)		(25,754	)		(8,102	)
Cash portion of loss on extinguishment of debt		(2,861	)		(14,153	)		(26	)		-			(17,040	)		(118	)
Recouponing and payment of swap termination		(64	)		(35	)		-			-			(99	)		(99	)
Purchase of treasury stock		-			-			(17,613	)		-			(17,613	)		-
Net cash provided by (used in) financing activities		(111,084	)		(21,232	)		(108	)		16,905			(115,519	)		106,976
Net (decrease) increase in cash and cash equivalents		(45,095	)		3,394			(931	)		(8,359	)		(50,991	)		11,277
Cash and cash equivalents at beginning of period		81,827			36,732			40,126			39,195			81,827			30,836
Cash and cash equivalents at end of period	$	36,732		$	40,126		$	39,195		$	30,836		$	30,836		$	42,113