EX-99.2 3 exhibit99_2.htm SUPPLEMENTAL INFORMATION
 
 
Brookdale Senior Living Inc.
 
 
 
 
 
 
 
 
Corporate Overview - selected financial information
 
 
 
 
 
 
 
 
As of June 30, 2013
 
 
 
 
 
 
 
 
 
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 June 30, 2013, the Company operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 650 communities in 36 states and the ability to serve approximately 67,000 residents. Through its Innovative Senior Care program, the Company also offers a range of outpatient therapy, home health and hospice services, primarily to residents of its communities.
 
Stock Listing
 
 
 
 
 
 
 
 
Common Stock
 
 
 
 
 
 
 
 
NYSE: BKD
 
 
 
 
 
 
 
 
 
Community Information
 
Ownership Type
  
Number of
Communities
    
Number of Units
    
Percentage of
Q2 2013
Resident and
Management
Fees
    
Percentage of
Q2 2013 Facility
Operating
Income
    
Percentage of
YTD 2013
Resident and
Management
Fees
    
Percentage of
YTD 2013
Facility
Operating
Income
  
Owned
    
220
      
22,944
      
42.2
%
    
41.6
%
    
42.2
%
    
41.5
%
Leased
    
329
      
25,758
      
47.3
%
    
49.5
%
    
47.2
%
    
49.3
%
Innovative Senior Care ("ISC")
    
N/A
 
    
N/A
 
    
9.3
%
    
5.3
%
    
9.4
%
    
5.6
%
Managed
    
101
      
18,200
      
1.2
%
    
3.6
%
    
1.2
%
    
3.6
%
    Total
    
650
      
66,902
      
100.0
%
    
100.0
%
    
100.0
%
    
100.0
%
 
                                                
Operating Type - By Segment
                                                
Retirement Centers
    
76
      
14,525
      
20.7
%
    
25.5
%
    
20.6
%
    
24.9
%
Assisted Living
    
432
      
21,567
      
41.5
%
    
45.2
%
    
41.3
%
    
44.6
%
CCRCs - Rental
    
27
      
6,744
      
15.5
%
    
12.0
%
    
15.7
%
    
12.7
%
CCRCs - Entry Fee
    
14
      
5,866
      
11.8
%
    
8.4
%
    
11.8
%
    
8.6
%
Innovative Senior Care ("ISC")
    
N/A
 
    
N/A
 
    
9.3
%
    
5.3
%
    
9.4
%
    
5.6
%
Managed
    
101
      
18,200
      
1.2
%
    
3.6
%
    
1.2
%
    
3.6
%
    Total
    
650
      
66,902
      
100.0
%
    
100.0
%
    
100.0
%
    
100.0
%
 
CFFO Per Share
 
 
 
 
 
 
 
 
 
($ except where indicated)
  
FY 2012
    
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year (1)
      
Q1
      
Q2
  
Reported CFFO
  
$
0.45
    
$
0.51
    
$
0.50
    
$
0.50
    
$
1.96
    
$
0.55
    
$
0.58
  
Add: integration, transaction-related and EMR roll-out costs
    
 
0.03
      
 
0.06
      
 
0.04
      
 
0.06
      
 
0.19
      
 
0.02
      
 
0.03
  
Adjusted CFFO
  
$
0.48
    
$
0.57
    
$
0.54
    
$
0.56
    
$
2.15
    
$
0.57
    
$
0.61
  
 
                                                        
Weighted average shares (000's)
    
121,145
      
121,708
      
122,493
      
122,608
              
122,823
      
123,405
  
Period end outstanding shares (excluding unvested restricted shares) (000's)
    
 
121,197
      
 
122,474
      
 
122,575
      
 
122,738
              
 
123,040
      
 
124,061
  
 
(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 second quarter earnings release for non-GAAP financial measure definitions and reconciliations.
1
Brookdale Senior Living Inc.
 
 
 
 
 
 
 
 
Segment Operating Information
 
 
 
 
 
 
 
 
As of June 30, 2013
 
 
 
 
 
 
 
 
 
Senior Housing Operating Information
 
  
FY 2012
    
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Retirement Centers
                                  
                 
Number of communities (period end)
    
76
      
76
      
76
      
76
      
76
      
76
      
76
  
Total average units(1)
    
14,452
      
14,451
      
14,445
      
14,433
      
14,445
      
14,429
      
14,429
  
Weighted average unit occupancy
    
88.8
%
    
88.8
%
    
89.1
%
    
89.7
%
    
89.1
%
    
89.5
%
    
89.4
%
Senior Housing average monthly revenue per unit(2)
  
$
3,235
    
$
3,268
    
$
3,275
    
$
3,276
    
$
3,263
    
$
3,328
    
$
3,362
  
 
                                                        
Assisted Living
                                                        
Number of communities (period end)
    
434
      
434
      
434
      
433
      
433
      
431
      
432
  
Total average units(1)
    
21,635
      
21,637
      
21,652
      
21,577
      
21,625
      
21,556
      
21,499
  
Weighted average unit occupancy
    
88.5
%
    
88.6
%
    
89.1
%
    
89.7
%
    
88.9
%
    
89.1
%
    
89.4
%
Senior Housing average monthly revenue per unit(2)
  
$
4,379
    
$
4,390
    
$
4,393
    
$
4,401
    
$
4,390
    
$
4,523
    
$
4,519
  
 
                                                        
CCRCs - Rental
                                                        
Number of communities (period end)
    
26
      
27
      
27
      
27
      
27
      
27
      
27
  
Total average units(1)
    
6,626
      
6,659
      
6,691
      
6,691
      
6,667
      
6,687
      
6,684
  
Weighted average unit occupancy
    
86.5
%
    
85.8
%
    
85.8
%
    
87.0
%
    
86.3
%
    
87.6
%
    
86.2
%
Senior Housing average monthly revenue per unit(2)
  
$
5,536
    
$
5,561
    
$
5,619
    
$
5,639
    
$
5,588
    
$
5,709
    
$
5,649
  
 
                                                        
CCRCs - Entry Fee
                                                        
Number of communities (period end)
    
14
      
14
      
14
      
14
      
14
      
14
      
14
  
Total average units(1)
    
5,171
      
5,199
      
5,221
      
5,249
      
5,210
      
5,281
      
5,295
  
Weighted average unit occupancy
    
83.7
%
    
83.4
%
    
83.4
%
    
84.1
%
    
83.7
%
    
84.6
%
    
83.8
%
Senior Housing average monthly revenue per unit(2)
  
$
5,055
    
$
4,963
    
$
4,975
    
$
4,921
    
$
4,978
    
$
5,011
    
$
5,025
  
 
                                                        
Senior Housing Totals
                                                        
Number of communities (period end)
    
550
      
551
      
551
      
550
      
550
      
548
      
549
  
Total average units(1)
    
47,884
      
47,946
      
48,009
      
47,950
      
47,947
      
47,953
      
47,907
  
Weighted average unit occupancy
    
87.8
%
    
87.7
%
    
88.0
%
    
88.7
%
    
88.0
%
    
88.5
%
    
88.3
%
Senior Housing average monthly revenue per unit(2)
  
$
4,257
    
$
4,266
    
$
4,279
    
$
4,282
    
$
4,271
    
$
4,375
    
$
4,373
  
 
                                                        
Management Services - Total
                                                        
Number of communities (period end)
    
96
      
96
      
97
      
97
      
97
      
101
      
101
  
Total average units(1)
    
18,253
      
18,144
      
18,081
      
18,141
      
18,155
      
18,114
      
18,310
  
Weighted average occupancy
    
84.3
%
    
84.0
%
    
84.3
%
    
85.4
%
    
84.5
%
    
84.9
%
    
84.9
%
Average monthly revenue per unit(2)
  
$
3,373
    
$
3,369
    
$
3,386
    
$
3,399
    
$
3,382
    
$
3,460
    
$
3,505
  
 
Innovative Senior Care Operating Information
 
 
 
 
 
 
 
 
FY 2012
 
 
FY 2013
 
Q1
Q2
Q3
Q4
 
 
Q1
Q2
Innovative Senior Care
 
 
 
 
 
 
 
 
Brookdale units served:
 
 
 
 
 
 
 
 
Outpatient Therapy consolidated
        35,909
         36,844
        38,016
         37,961
 
 
      38,017
     38,075
Home Health consolidated
        32,655
         31,944
        32,650
         32,242
 
 
      32,389
     32,864
Outpatient Therapy non-consolidated
          9,685
           9,861
        12,540
         13,448
 
 
      13,502
     14,177
Home Health non-consolidated
          4,735
         10,667
        12,597
         13,569
 
 
      13,326
     13,232
Total Brookdale units served:
 
 
 
 
 
 
 
 
Outpatient Therapy
        45,594
         46,705
        50,556
         51,409
 
 
      51,519
     52,252
Home Health
        37,390
         42,611
        45,247
         45,811
 
 
      45,715
     46,096
 
 
 
 
 
 
 
 
 
Outpatient Therapy treatment codes
907,816
957,364
939,241
762,233
 
 
821,308
840,076
Home Health average census
3,448
3,554
3,651
4,187
 
 
4,289
4,366
 
(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 and ISC segment revenue, divided by average occupied units.
 
2
 
Brookdale Senior Living Inc.
 
 
 
 
 
 
 
Senior Housing Data by Ownership Type
 
 
 
 
 
 
 
As of June 30, 2013
 
 
 
 
 
 
 
 
Senior Housing Operating Information
 
 
 
 
 
 
 
 
 
  
FY 2012
    
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4 (1)
    
Q1
      
Q2
  
 
                                                
Owned Properties
                                                
Number of communities (period end)
    
209
      
210
      
210
      
221
      
219
      
220
  
Total average units(2)
    
21,281
      
21,350
      
21,425
      
22,243
      
22,243
      
22,153
  
Weighted average unit occupancy
    
87.2
%
    
87.4
%
    
87.6
%
    
89.0
%
    
88.8
%
    
88.7
%
Senior Housing average monthly revenue per unit(3)
  
$
4,302
    
$
4,297
    
$
4,318
    
$
4,323
    
$
4,416
    
$
4,416
  
 
                                                
Leased Properties with Bargain Purchase Options
                                                
Number of communities (period end)
    
18
      
18
      
18
      
9
      
9
      
9
  
Total average units(2)
    
3,263
      
3,263
      
3,261
      
2,948
      
2,949
      
2,945
  
Weighted average unit occupancy
    
88.4
%
    
87.6
%
    
88.0
%
    
88.3
%
    
88.2
%
    
88.0
%
Senior Housing average monthly revenue per unit(3)
  
$
3,878
    
$
3,874
    
$
3,903
    
$
3,802
    
$
3,891
    
$
3,896
  
 
                                                
Leased Properties with Fair Market Value Purchase Options
                                                
Number of communities (period end)
    
77
      
77
      
77
      
74
      
74
      
74
  
Total average units(2)
    
3,929
      
3,927
      
3,927
      
3,364
      
3,364
      
3,364
  
Weighted average unit occupancy
    
91.1
%
    
91.2
%
    
92.0
%
    
91.8
%
    
90.8
%
    
90.6
%
Senior Housing average monthly revenue per unit(3)
  
$
4,384
    
$
4,423
    
$
4,482
    
$
4,549
    
$
4,675
    
$
4,638
  
 
                                                
Leased Properties without Purchase Options
                                                
Number of communities (period end)
    
246
      
246
      
246
      
246
      
246
      
246
  
Total average units(2)
    
19,411
      
19,406
      
19,396
      
19,395
      
19,397
      
19,445
  
Weighted average unit occupancy
    
87.6
%
    
87.3
%
    
87.6
%
    
87.9
%
    
87.9
%
    
87.6
%
Senior Housing average monthly revenue per unit(3)
  
$
4,241
    
$
4,264
    
$
4,256
    
$
4,256
    
$
4,344
    
$
4,348
  
 
                                                
Senior Housing Totals
                                                
Number of communities (period end)
    
550
      
551
      
551
      
550
      
548
      
549
  
Total average units(2)
    
47,884
      
47,946
      
48,009
      
47,950
      
47,953
      
47,907
  
Weighted average unit occupancy
    
87.8
%
    
87.7
%
    
88.0
%
    
88.7
%
    
88.5
%
    
88.3
%
Senior Housing average monthly revenue per unit(3)
  
$
4,257
    
$
4,266
    
$
4,279
    
$
4,282
    
$
4,375
    
$
4,373
  
 
(1)
During the three months ended December 31, 2012, the Company acquired the underlying real estate interest in 12 communities that the Company previously leased.  The results of operations of the previously leased communities are included within Owned Properties beginning in the fourth quarter of FY 2012.  Prior quarters have not been recast.
(2)
Total average units operated represent the average units operated during the period, excluding equity homes.
 
 
 
(3)
Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees and ISC segment revenue, divided by average occupied units.
 
3
 
Brookdale Senior Living Inc.
 
 
 
 
 
 
 
 
 
 
Segment Financial Data
 
 
 
 
 
 
 
 
 
 
As of June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Financial Data
 
 
 
 
 
 
 
 
 
($ in 000s)
 
 
 
 
 
 
 
 
 
 
Retirement Centers
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
         124,512
     125,813
     126,401
     127,176
       503,902
 
     128,922
     130,170
       259,092
Expenses
           73,521
       73,138
       75,679
       75,979
       298,317
 
       75,588
       75,993
       151,581
Segment Operating Income
           50,991
       52,675
       50,722
       51,197
       205,585
 
       53,334
       54,177
       107,511
Segment Operating Margin
41.0%
41.9%
40.1%
40.3%
40.8%
 
41.4%
41.6%
41.5%
 
 
 
 
 
 
 
 
 
 
Assisted Living
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
         251,352
     252,399
     254,179
     255,407
    1,013,337
 
     260,615
     260,497
       521,112
Expenses
         160,789
     162,233
     163,017
     166,114
       652,153
 
     164,330
     164,316
       328,646
Segment Operating Income
           90,563
       90,166
       91,162
       89,293
       361,184
 
       96,285
       96,181
       192,466
Segment Operating Margin
36.0%
35.7%
35.9%
35.0%
35.6%
 
36.9%
36.9%
36.9%
 
 
 
 
 
 
 
 
 
 
CCRCs - Rental
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
           95,112
       95,258
       96,681
       98,428
       385,479
 
     100,327
       97,562
       197,889
Expenses
           67,093
       68,494
       71,581
       72,248
       279,416
 
       71,250
       71,995
       143,245
Segment Operating Income
           28,019
       26,764
       25,100
       26,180
       106,063
 
       29,077
       25,567
         54,644
Segment Operating Margin
29.5%
28.1%
26.0%
26.6%
27.5%
 
29.0%
26.2%
27.6%
 
 
 
 
 
 
 
 
 
 
CCRCs - Entry Fee
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
           71,719
       70,858
       71,413
       71,711
       285,701
 
       74,308
       74,016
       148,324
Expenses
           54,914
       55,341
       56,249
       57,792
       224,296
 
       54,737
       56,244
       110,981
Segment Operating Income
           16,805
       15,517
       15,164
       13,919
         61,405
 
       19,571
       17,772
         37,343
Segment Operating Margin
23.4%
21.9%
21.2%
19.4%
21.5%
 
26.3%
24.0%
25.2%
 
 
 
 
 
 
 
 
 
 
Bridge to Cash Basis for CCRCs - Entry Fee segment
 
 
 
 
 
 
 
 
Revenue
           71,719
       70,858
       71,413
       71,711
       285,701
 
       74,308
       74,016
       148,324
Less: revenue amortization (non-cash)
            (6,066)
        (6,310)
        (6,459)
        (6,527)
        (25,362)
 
        (7,133)
        (7,032)
       (14,165)
Add: net entrance fees (cash)
             6,887
       14,265
       19,108
       15,089
         55,349
 
         7,553
       16,422
         23,975
Adjusted revenue
           72,540
       78,813
       84,062
       80,273
       315,688
 
       74,728
       83,406
       158,134
Expenses
           54,914
       55,341
       56,249
       57,792
       224,296
 
       54,737
       56,244
       110,981
Adjusted Segment Operating Income
           17,626
       23,472
       27,813
       22,481
         91,392
 
       19,991
       27,162
         47,153
Adjusted Segment Operating Margin
24.3%
29.8%
33.1%
28.0%
29.0%
 
26.8%
32.6%
29.8%
 
Total Senior Housing
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
         542,695
     544,328
     548,674
     552,722
    2,188,419
 
     564,172
     562,245
    1,126,417
Expenses
         356,317
     359,206
     366,526
     372,133
    1,454,182
 
     365,905
     368,548
       734,453
Operating Income
         186,378
     185,122
     182,148
     180,589
       734,237
 
     198,267
     193,697
       391,964
Operating Margin
34.3%
34.0%
33.2%
32.7%
33.6%
 
35.1%
34.5%
34.8%
G&A Allocation (1)
           22,751
       20,876
       21,402
       20,374
         85,403
 
       25,526
       23,224
         48,750
G&A Allocation as a % of revenue
4.2%
3.8%
3.9%
3.7%
3.9%
 
4.5%
4.1%
4.3%
Adjusted Operating Income
         163,627
     164,246
     160,746
     160,215
       648,834
 
     172,741
     170,473
       343,214
Adjusted Operating Margin
30.2%
30.2%
29.3%
29.0%
29.6%
 
30.6%
30.3%
30.5%
 
4
 
 
Brookdale Senior Living Inc.
 
 
 
 
 
 
 
 
 
 
Segment Financial Data
 
 
 
 
 
 
 
 
 
 
As of June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Financial Data (continued)
 
 
 
 
 
 
 
 
 
($ in 000s)
 
 
 
 
 
 
 
 
 
 
Innovative Senior Care ("ISC")
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
           53,854
       57,722
       56,856
       56,085
       224,517
 
       60,198
       58,693
       118,891
Expenses
           42,452
       44,309
       44,941
       45,035
       176,737
 
       47,098
       47,479
         94,577
Segment Operating Income
           11,402
       13,413
       11,915
       11,050
         47,780
 
       13,100
       11,214
         24,314
Segment Operating Margin
21.2%
23.2%
21.0%
19.7%
21.3%
 
21.8%
19.1%
20.5%
G&A Allocation (1)
             5,954
         5,453
         5,467
         5,358
         22,232
 
         6,055
         6,005
         12,060
G&A Allocation as a % of revenue
11.1%
9.4%
9.6%
9.6%
9.9%
 
10.1%
10.2%
10.1%
Adjusted Segment Operating Income
             5,448
         7,960
         6,448
         5,692
         25,548
 
         7,045
         5,209
         12,254
Adjusted Segment Operating Margin
10.1%
13.8%
11.3%
10.1%
11.4%
 
11.7%
8.9%
10.3%
 
Total Senior Housing and ISC
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
         596,549
     602,050
     605,530
     608,807
    2,412,936
 
     624,370
     620,938
    1,245,308
Expenses
         398,769
     403,515
     411,467
     417,168
    1,630,919
 
     413,003
     416,027
       829,030
Operating Income
         197,780
     198,535
     194,063
     191,639
       782,017
 
     211,367
     204,911
       416,278
Operating Margin
33.2%
33.0%
32.0%
31.5%
32.4%
 
33.9%
33.0%
33.4%
G&A Allocation (1)
           28,705
       26,329
       26,869
       25,732
       107,635
 
       31,581
       29,229
         60,810
G&A Allocation as a % of revenue
4.8%
4.4%
4.4%
4.2%
4.5%
 
5.1%
4.7%
4.9%
Adjusted Operating Income
         169,075
     172,206
     167,194
     165,907
       674,382
 
     179,786
     175,682
       355,468
Adjusted Operating Margin
28.3%
28.6%
27.6%
27.3%
27.9%
 
28.8%
28.3%
28.5%
 
Management Services
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue (Management Fees)
             7,444
         7,499
         7,407
         8,436
         30,786
 
         7,609
         7,744
         15,353
Expenses (G&A Allocation) (1)
             5,929
         5,325
         5,644
         5,311
         22,209
 
         6,031
         6,192
         12,223
Segment Operating Income
             1,515
         2,174
         1,763
         3,125
           8,577
 
         1,578
         1,552
           3,130
Segment Operating Margin
20.4%
29.0%
23.8%
37.0%
27.9%
 
20.7%
20.0%
20.4%
 
Total Senior Housing, ISC and Management Services
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
         603,993
     609,549
     612,937
     617,243
    2,443,722
 
     631,979
     628,682
    1,260,661
Expenses
         398,769
     403,515
     411,467
     417,168
    1,630,919
 
     413,003
     416,027
       829,030
Operating Income
         205,224
     206,034
     201,470
     200,075
       812,803
 
     218,976
     212,655
       431,631
Operating Margin
34.0%
33.8%
32.9%
32.4%
33.3%
 
34.6%
33.8%
34.2%
G&A Allocation (1)
           34,634
       31,654
       32,513
       31,043
       129,844
 
       37,612
       35,421
         73,033
G&A Allocation as a % of revenue
5.7%
5.2%
5.3%
5.0%
5.3%
 
6.0%
5.6%
5.8%
Adjusted Operating Income
         170,590
     174,380
     168,957
     169,032
       682,959
 
     181,364
     177,234
       358,598
Adjusted Operating Margin
28.2%
28.6%
27.6%
27.4%
27.9%
 
28.7%
28.2%
28.4%
 
(1) Excludes non-cash stock-based compensation expense and integration, transaction-related and EMR roll-out costs.
 
5
 
 
Brookdale Senior Living Inc.
Senior Housing Data by Ownership Type
As of June 30, 2013
 
Financial Data
($ in 000s)
 
Owned Properties
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4 (1)
Full Year
 
Q1
Q2
YTD
Revenue
          243,302
          244,720
          247,473
          260,980
          996,475
 
          266,322
          265,139
          531,461
Expenses
          163,822
          165,862
          171,356
          177,350
          678,390
 
          175,672
          176,623
          352,295
Segment Operating Income
            79,480
            78,858
            76,117
            83,630
          318,085
 
            90,650
            88,516
          179,166
Segment Operating Margin
32.7%
32.2%
30.8%
32.0%
31.9%
 
34.0%
33.4%
33.7%
 
 
 
 
 
 
 
 
 
 
Bridge to Cash Basis for CCRCs - Entry Fee
 
 
 
 
 
 
 
Revenue
          243,302
          244,720
          247,473
          260,980
          996,475
 
          266,322
          265,139
          531,461
Less: revenue amortization (non-cash)
            (3,692)
            (4,208)
            (4,294)
            (4,265)
          (16,459)
 
            (4,664)
            (4,821)
            (9,485)
Add: net entrance fees (cash)
              5,802
            10,487
            14,234
            11,481
            42,004
 
              5,449
            10,936
            16,385
Adjusted revenue
          245,412
          250,999
          257,413
          268,196
       1,022,020
 
          267,107
          271,254
          538,361
Expenses
          163,822
          165,862
          171,356
          177,350
          678,390
 
          175,672
          176,623
          352,295
Adjusted Segment Operating Income
            81,590
            85,137
            86,057
            90,846
          343,630
 
            91,435
            94,631
          186,066
Adjusted Segment Operating Margin
33.2%
33.9%
33.4%
33.9%
33.6%
 
34.2%
34.9%
34.6%
 
 
 
 
 
 
 
 
 
 
Leased Properties with Bargain Purchase Options
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
            35,394
            34,853
            35,362
            31,494
          137,103
 
            32,254
            32,096
            64,350
Expenses
            23,287
            23,433
            24,264
            21,334
            92,318
 
            20,766
            21,308
            42,074
Segment Operating Income
            12,107
            11,420
            11,098
            10,160
            44,785
 
            11,488
            10,788
            22,276
Segment Operating Margin
34.2%
32.8%
31.4%
32.3%
32.7%
 
35.6%
33.6%
34.6%
 
 
 
 
 
 
 
 
 
 
Leased Properties with Fair Market Value Purchase Options
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
            47,104
            47,534
            48,560
            42,140
          185,338
 
            42,842
            42,408
            85,250
Expenses
            29,974
            30,192
            28,999
            27,443
          116,608
 
            26,940
            27,011
            53,951
Segment Operating Income
            17,130
            17,342
            19,561
            14,697
            68,730
 
            15,902
            15,397
            31,299
Segment Operating Margin
36.4%
36.5%
40.3%
34.9%
37.1%
 
37.1%
36.3%
36.7%
 
 
 
 
 
 
 
 
 
 
Leased Properties without Purchase Options
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
          216,895
          217,221
          217,279
          218,108
          869,503
 
          222,754
          222,602
          445,356
Expenses
          139,234
          139,719
          141,907
          146,006
          566,866
 
          142,527
          143,606
          286,133
Segment Operating Income
            77,661
            77,502
            75,372
            72,102
          302,637
 
            80,227
            78,996
          159,223
Segment Operating Margin
35.8%
35.7%
34.7%
33.1%
34.8%
 
36.0%
35.5%
35.8%
 
Total Senior Housing
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
YTD
Revenue
          542,695
          544,328
          548,674
          552,722
       2,188,419
 
          564,172
          562,245
       1,126,417
Expenses
          356,317
          359,206
          366,526
          372,133
       1,454,182
 
          365,905
          368,548
          734,453
Operating Income
          186,378
          185,122
          182,148
          180,589
          734,237
 
          198,267
          193,697
          391,964
Operating Margin
34.3%
34.0%
33.2%
32.7%
33.6%
 
35.1%
34.5%
34.8%
 
(1)  During the three months ended December 31, 2012, the Company acquired the underlying real estate interest in 12 communities that the Company previously leased.  The results of operations of the previously leased communities are included within Owned Properties beginning in the fourth quarter of FY 2012.  Prior quarters have not been recast.
 
6
 
 
Brookdale Senior Living Inc.
 
 
 
 
 
 
Same Community and Capital Expenditure Information
 
 
 
 
 
 
As of June 30, 2013
 
 
 
 
 
 
 
Same Community Information
($ in 000s, except Avg. Mo. Revenue/Unit)
 
  
  
Senior Housing
    
  
Senior Housing
  
 
  
Three Months Ended June 30,
    
Twelve Months Ended June 30,
  
 
  
2013
    
2012
    
% Change
    
2013
    
2012
    
% Change
  
Revenue
  
$
547,580
    
$
531,211
      
3.1
%
  
$
2,169,032
    
$
2,088,917
      
3.8
%
Operating Expense
    
362,214
      
354,418
      
2.2
%
    
1,446,702
      
1,389,559
      
4.1
%
Facility Operating Income
  
$
185,366
    
$
176,793
      
4.8
%
  
$
722,330
    
$
699,358
      
3.3
%
Facility Operating Margin
    
33.9
%
    
33.3
%
    
0.6
%
    
33.3
%
    
33.5
%
    
-0.2
%
 
                                                
# Communities
    
541
      
541
              
541
      
541
          
Avg. Period Occupancy
    
88.5
%
    
87.7
%
    
0.8
%
    
88.5
%
    
87.2
%
    
1.3
%
Avg. Mo. Revenue/Unit
  
$
4,364
    
$
4,268
      
2.2
%
  
$
4,321
    
$
4,226
      
2.2
%
 
                                                
 
                                                
 
        
Innovative Senior Care
         
Innovative Senior Care
  
 
  
Three Months Ended June 30,
    
Twelve Months Ended June 30,
  
 
    
2013
      
2012
    
% Change
      
2013
      
2012
    
% Change
  
Revenue
  
$
32,078
    
$
36,081
      
-11.1
%
  
$
132,628
    
$
148,574
      
-10.7
%
Operating Expense
    
25,977
      
27,668
      
-6.1
%
    
105,816
      
112,474
      
-5.9
%
Facility Operating Income
  
$
6,101
    
$
8,413
      
-27.5
%
  
$
26,812
    
$
36,100
      
-25.7
%
Facility Operating Margin
    
19.0
%
    
23.3
%
    
-4.3
%
    
20.2
%
    
24.3
%
    
-4.1
%
 
                                                
# Units served (1)
    
27,337
      
27,337
              
27,337
      
27,337
          
 
(1)  Units are included in same store calculation where either the therapy or home health, whichever came later, has stabilized or produced revenue for twenty-four months.
 
Schedule of Capital Expenditures
($ in 000s)
 
 
  
Three Months Ended June 30,
  
Type
  
2013
    
2012
  
Recurring
  
$
10,664
    
$
9,099
  
Reimbursements
    
-
      
(500
)
    Net Recurring
    
10,664
      
8,599
  
Corporate (2)
    
5,523
      
6,817
  
EBITDA-enhancing / Major Projects (3)
    
25,961
      
22,587
  
Program Max / Development, net (4)
    
8,839
      
11,199
  
        Net Total Capital Expenditures (5)
  
$
50,987
    
$
49,202
  
 
(2)  Corporate includes capital expenditures for information technology systems and equipment and expenditures supporting the expansion of our support platform and ancillary services programs.
(3)  Includes EBITDA-enhancing projects (primarily community renovations and apartment upgrades) and other major building infrastructure projects.
(4)  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 $8.2 million and $0.7 million for the three months ended June 30, 2013 and 2012, respectively.
(5)  Approximately $10.8 million and $11.3 million of expense was recognized during the three months ended June 30, 2013 and 2012,
respectively, for normal repairs and maintenance and capital spend under $1,500 per invoice, except for unit turnovers.
 
7
 
 
Brookdale Senior Living Inc.
 
 
 
 
 
 
 
 
 
 
Capital Structure - selected financial information
 
 
 
 
 
 
 
 
 
 
As of June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($ in 000s)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Maturities and Scheduled Principal Repayments
 
 
 
  
Initial Maturities
  
 
  
Mortgage
    
weighted
    
Line of
    
weighted
    
Capital
    
weighted
    
Total
  
 
  
Debt (1)
    
rate (2)
    
Credit
    
rate (2)
    
Leases
    
rate (2)
    
Debt
  
 
  
   
   
   
   
   
   
 
2013
  
$
23,375
      
3.38
%
  
$
-
      
-
    
$
15,963
      
8.27
%
  
$
39,338
  
2014
    
172,262
      
5.29
%
    
-
      
-
      
32,853
      
8.29
%
    
205,115
  
2015
    
54,428
      
4.88
%
    
-
      
-
      
33,778
      
8.32
%
    
88,206
  
2016
    
57,023
      
4.43
%
    
-
      
-
      
29,290
      
8.41
%
    
86,313
  
2017
    
319,331
      
5.18
%
    
-
      
-
      
47,048
      
9.10
%
    
366,379
  
Thereafter
    
1,623,148
      
3.43
%
    
70,000
      
3.75
%
    
147,450
      
7.72
%
    
1,840,598
  
Total
  
$
2,249,567
      
3.88
%
  
$
70,000
      
3.75
%
  
$
306,382
      
8.15
%
  
$
2,625,949
  
 
Coverage Ratios
 
 
  
Six months ended June 30, 2013
  
 
  
   
   
   
Interest/Cash Lease
  
 
  
Units
    
FOI
    
Adj. FOI **
    
Payments
    
Coverage
  
Owned communities
    
22,944
    
$
189,778
    
$
156,955
    
$
47,824
      
3.3 x          
 
Leased communities *
    
25,758
    
$
224,321
    
$
187,394
    
$
158,349
      
1.2 x          
 
 
*  The leased communities include the capital leases.
 
 
 
**  Adjusted for 5% management fee and capital expenditures @ $350/unit.
 
 
 
 
Debt Amortization
 
 
  
Six months ended June 30,
  
 
  
2013
    
2012
  
Scheduled debt amortization
  
$
23,736
    
$
22,751
  
Lease financing debt amortization - FMV or no purchase option (3)
    
6,815
      
5,922
  
Lease financing debt amortization - bargain purchase option
    
8,133
      
6,879
  
    Total debt amortization
  
$
38,684
    
$
35,552
  
 
Line Availability
 
($000s)
  
06/30/12
    
09/30/12
    
12/31/12
    
03/31/13
    
06/30/13
  
 
  
   
   
   
   
 
Total line commitment
  
$
230,000
    
$
230,000
    
$
230,000
    
$
230,000
    
$
250,000
  
 
                                        
Line availability (6)
  
$
201,659
    
$
189,978
    
$
191,436
    
$
198,563
    
$
225,331
  
Ending line balance
    
75,000
      
80,000
      
80,000
      
45,000
      
70,000
  
Available to draw
  
$
126,659
    
$
109,978
    
$
111,436
    
$
153,563
    
$
155,331
  
Cash and cash equivalents
    
38,676
      
42,504
      
69,240
      
28,242
      
30,946
  
Total liquidity (available to draw + cash)
  
$
165,335
    
$
152,482
    
$
180,676
    
$
181,805
    
$
186,277
  
 
                                        
Total letters of credit outstanding
  
$
78,324
    
$
78,127
    
$
78,112
    
$
77,952
    
$
75,031
  
 
(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) Payments are included in CFFO.
(4) Weighted swap rate for stated reporting period is 5.49%.
(5) Weighted cap rate for stated reporting period of 5.08% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.
(6) 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.
 
 
Leverage Ratios
 
 
 
 
 
 
 
 
 
 
  
   
Annualized
  
 
  
Balance
    
Leverage
  
Debt (1)
  
$
2,249,567
    
 
Capital leases
    
306,382
    
 
   Total Debt
  
$
2,555,949
    
5.7 
x
 
 
                
Plus: Line of credit (cash borrowings)
    
70,000
          
Less: Unrestricted cash
    
(30,946
)
        
Less: Cash held as collateral against existing debt
    
(6,390
)
        
   Subtotal
  
$
2,588,613
    
5.8
x
 
 
                
2013 YTD annualized Adjusted EBITDA
  
$
448,254
          
 
                
Annual cash lease expense multiplied by 8
    
2,216,800
          
   Total adjusted debt
  
$
4,805,413
    
6.6
x
 
 
                
2013 YTD annualized Adjusted EBITDAR
  
$
725,354
          
 
Debt Structure
 
 
 
 
 
 
 
 
 
 
  
   
Weighted
  
 
  
Balance
    
rate (2)
  
Fixed rate debt (1)
  
$
1,276,337
      
4.78
%
Variable rate debt (1)
    
973,230
      
2.70
%
Capital leases
    
306,382
      
8.15
%
Line of credit (cash borrowings)
    
70,000
      
3.75
%
   Total debt
  
$
2,625,949
          
 
                
 
  
Balance
    
% of total
  
Variable rate debt with interest rate swaps (1) (4)
  
$
27,170
      
2.8
%
Variable rate debt with interest rate caps (1) (5)
    
673,333
      
69.2
%
Variable rate debt - unhedged (1)
    
272,727
      
28.0
%
Total variable rate debt (1)
  
$
973,230
      
100.0
%
 
8
 
 
Brookdale Senior Living Inc.
CFFO Reconciliation
As of June 30, 2013
 
CFFO Calculation
($ in 000s)
 
 
  
Three Months Ended June 30,
  
 
  
2013
    
2012
  
 
  
   
 
Net cash provided by operating activities (includes non-refundable entrance fees)
  
$
80,343
    
$
82,854
  
Changes in operating assets and liabilities (eliminates cash flow effect)
    
(707
)
    
(14,172
)
Add: Refundable entrance fees received
    
11,754
      
9,317
  
Less: Entrance fee refunds disbursed
    
(7,456
)
    
(5,429
)
Less: Recurring capital expenditures, net
    
(10,664
)
    
(8,599
)
Less: Lease financing debt amortization with fair market value or no purchase options
    
(3,444
)
    
(2,993
)
Less: Distributions from unconsolidated ventures from cumulative share of net earnings
    
(773
)
    
(809
)
Add: CFFO from unconsolidated ventures
    
2,099
      
1,310
  
Cash From Facility Operations
  
$
71,152
    
$
61,479
  
 
                
Add: Integration, transaction-related and EMR roll-out costs
    
3,626
      
7,688
  
Adjusted Cash From Facility Operations
  
$
74,778
    
$
69,167
  
 
 
Revenue Reconciliation (1)
 
($ in 000s except average monthly revenue per quarter) 
 
FY 2012
    
 
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue reconciliation excl. entrance fee amortization
                    
                 
Average monthly revenue per quarter
    
4,257
      
4,266
      
4,279
      
4,282
      
4,271
      
4,375
      
4,373
  
Average monthly units (excluding equity homes) available
    
47,858
      
47,935
      
47,998
      
47,935
      
47,959
      
47,956
      
47,929
  
Average occupancy for the quarter
    
87.8
%
    
87.7
%
    
88.0
%
    
88.7
%
    
88.0
%
    
88.5
%
    
88.3
%
Senior Housing resident fee revenue
  
$
536,629
    
$
538,018
    
$
542,215
    
$
546,195
    
$
2,163,057
    
$
557,039
    
$
555,213
  
 
                                                        
Add:  ISC segment revenue
    
53,854
      
57,722
      
56,856
      
56,085
      
224,517
      
60,198
      
58,693
  
Add:  management fee revenue
    
7,444
      
7,499
      
7,407
      
8,436
      
30,786
      
7,609
      
7,744
  
Total revenues excluding entrance fee amortization
  
$
597,927
    
$
603,239
    
$
606,478
    
$
610,716
    
$
2,418,360
    
$
624,846
    
$
621,650
  
 
CFFO Reconciliation to the Income Statement
 
 
Resident and management fee revenue
  
$
603,993
    
$
609,549
    
$
612,937
    
$
617,243
    
$
2,443,722
    
$
631,979
    
$
628,682
  
Less: Entrance fee amortization
    
(6,066
)
    
(6,310
)
    
(6,459
)
    
(6,527
)
    
(25,362
)
    
(7,133
)
    
(7,032
)
Adjusted revenues
    
597,927
      
603,239
      
606,478
      
610,716
      
2,418,360
      
624,846
      
621,650
  
 
                                                        
Less: Facility operating expenses
    
(398,769
)
    
(403,515
)
    
(411,467
)
    
(417,168
)
    
(1,630,919
)
    
(413,003
)
    
(416,027
)
Add:  Change in future service obligation
    
-
      
-
      
-
      
2,188
      
2,188
      
-
      
-
  
Adjusted facility operating expenses
    
(398,769
)
    
(403,515
)
    
(411,467
)
    
(414,980
)
    
(1,628,731
)
    
(413,003
)
    
(416,027
)
 
                                                        
Less: G&A including non-cash stock-based compensation expense
    
(44,973
)
    
(46,071
)
    
(43,158
)
    
(44,627
)
    
(178,829
)
    
(46,611
)
    
(46,035
)
Add:  G&A non-cash stock-based compensation expense
    
6,435
      
6,729
      
6,021
      
6,335
      
25,520
      
6,894
      
6,988
  
Net G&A
    
(38,538
)
    
(39,342
)
    
(37,137
)
    
(38,292
)
    
(153,309
)
    
(39,717
)
    
(39,047
)
 
                                                        
Less: Facility lease expense
    
(71,445
)
    
(70,628
)
    
(71,167
)
    
(70,785
)
    
(284,025
)
    
(69,019
)
    
(68,777
)
Add:  Straight-line lease expense
    
1,642
      
1,564
      
2,118
      
1,344
      
6,668
      
748
      
684
  
Less: Amortization of deferred gain
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
    
(1,093
)
    
(1,093
)
Net lease expense
    
(70,896
)
    
(70,157
)
    
(70,142
)
    
(70,534
)
    
(281,729
)
    
(69,364
)
    
(69,186
)
 
                                                        
Add:  Entrance fee receipts
    
14,989
      
19,694
      
25,132
      
22,890
      
82,705
      
16,873
      
23,878
  
Less: Entrance fee disbursements
    
(8,102
)
    
(5,429
)
    
(6,024
)
    
(7,801
)
    
(27,356
)
    
(9,320
)
    
(7,456
)
Net entrance fees
    
6,887
      
14,265
      
19,108
      
15,089
      
55,349
      
7,553
      
16,422
  
 
                                                        
Adjusted EBITDA
    
96,611
      
104,490
      
106,840
      
101,999
      
409,940
      
110,315
      
113,812
  
 
                                                        
Less: Recurring capital expenditures, net
    
(8,064
)
    
(8,599
)
    
(11,475
)
    
(10,168
)
    
(38,306
)
    
(9,324
)
    
(10,664
)
Less: Interest expense, net
    
(31,198
)
    
(31,739
)
    
(31,586
)
    
(29,803
)
    
(124,326
)
    
(30,668
)
    
(29,591
)
Less: Lease financing debt amortization with fair market value or no purchase options
    
(2,929
)
    
(2,993
)
    
(3,066
)
    
(3,132
)
    
(12,120
)
    
(3,371
)
    
(3,444
)
Add:  CFFO from unconsolidated ventures
    
1,228
      
1,310
      
1,559
      
1,279
      
5,376
      
1,958
      
2,099
  
Less: Other
    
(1,062
)
    
(990
)
    
(792
)
    
1,238
      
(1,606
)
    
(1,068
)
    
(1,060
)
 
                                                        
Reported CFFO
  
$
54,586
    
$
61,479
    
$
61,480
    
$
61,413
    
$
238,958
    
$
67,842
    
$
71,152
  
 
                                                        
Add:  integration, transaction-related and EMR roll-out costs
    
3,904
      
7,688
      
4,624
      
7,249
      
23,465
      
2,105
      
3,626
  
Adjusted CFFO
  
$
58,490
    
$
69,167
    
$
66,104
    
$
68,662
    
$
262,423
    
$
69,947
    
$
74,778
  
 
CFFO Per Share
 
 
($ except where indicated)
  
FY 2012
    
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year (2)
      
Q1
      
Q2
  
Reported CFFO
  
$
0.45
    
$
0.51
    
$
0.50
    
$
0.50
    
$
1.96
    
$
0.55
    
$
0.58
  
Add:  integration, transaction-related and EMR roll-out costs
    
0.03
      
0.06
      
0.04
      
0.06
      
0.19
      
0.02
      
0.03
  
Adjusted CFFO
  
$
0.48
    
$
0.57
    
$
0.54
    
$
0.56
    
$
2.15
    
$
0.57
    
$
0.61
  
 
                                                        
Shares used in calculation of CFFO (000's)
    
121,145
      
121,708
      
122,493
      
122,608
              
122,823
      
123,405
  
 
(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.
 
9
 
 
Brookdale Senior Living Inc.
Quarterly Entry Fee Information
As of June 30, 2013
 
Cash Basis ($ in 000's except average resale and refund)
 
 
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
 
Q1
Q2
# Closings
                  94
                106
                147
                121
 
                  91
                128
# of Refunds
                  92
                  62
                  66
                  79
 
                  87
                  88
 
 
 
 
 
 
 
 
Resale Receipts:
 
 
 
 
 
 
 
    Proceeds from non-refundable entrance fees (1)
             7,000
           10,377
           12,926
             9,802
 
             9,237
           12,124
    Proceeds from refundable entrance fees (2)
             7,989
             9,317
           12,206
           13,088
 
             7,636
           11,754
      Total Cash Proceeds
           14,989
           19,694
           25,132
           22,890
 
           16,873
           23,878
Refunds of entrance fees (3)
            (8,102)
            (5,429)
            (6,024)
            (7,801)
 
            (9,320)
            (7,456)
Net Resale Cash Flow
             6,887
           14,265
           19,108
           15,089
 
             7,553
           16,422
 
 
 
 
 
 
 
 
MyChoice proceeds included in refundable resale receipts above
             2,363
             3,602
             2,466
             4,881
 
             1,768
             4,041
 
 
 
 
 
 
 
 
Average Resale $ (excluding MyChoice proceeds)
         134,319
         151,811
         154,190
         148,835
 
         165,989
         154,977
Average Refund $ (excluding MyChoice refunds)
          (84,283)
          (77,500)
          (87,273)
          (95,025)
 
          (98,540)
          (80,773)
 
Value of Unsold Inventory ($ in 000's except average resale price)
Gross Value @ Average Resale Price of $155,000
 
 
 
 
 
 
           94,550
Refund Attachments
 
 
 
 
 
 
          (14,142)
Net Cash Value
 
 
 
 
 
 
           80,408
 
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:
 
 
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
 
Q1
Q2
Amortization of entrance fees (incl. gains on terminations)
            (6,066)
            (6,310)
            (6,459)
            (6,527)
 
            (7,133)
            (7,032)
 
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.
 
BKD adopted the provisions of ASU 2012-01 as of January 1, 2013 and incorporated the provisions of this update to its consolidated financial statements through retrospective application to all periods presented. The prior period amortization of entrance fees have been revised to reflect this change in accounting. Refer to the Company's Form 10-Q filings for further details.
 
Notes:
 
 
 
 
 
 
 
(1) From Statement of Cash Flows (Operating Activities section) with line description: Proceeds from deferred entrance fee revenue.
(2) From Statement of Cash Flows (Financing Activities section) with line description: Proceeds from refundable entrance fees (which includes MyChoice proceeds).
(3) From Statement of Cash Flows (Financing Activities section) with line description: Refunds of entrance fees.
 
10
 
 
Brookdale Senior Living Inc.
Quarterly Cash Flow Statements
As of June 30, 2013
($ in 000s)
 
Cash Flow Statements
 
 
 
 
 
 
 
 
 
 
    
Q1 2012
      
Q2 2012
      
Q3 2012
      
Q4 2012
    
FY 2012
      
Q1 2013
      
Q2 2013
  
Cash Flows from Operating Activities
                                  
                 
Net (loss) income
  
$
(10,544
)
  
$
(19,015
)
  
$
(12,216
)
  
$
(24,692
)
    
(66,467
)
  
$
3,558
    
$
(5,200
)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
                                  
Loss on extinguishment of debt
    
221
      
-
      
-
      
-
      
221
      
-
      
893
  
Depreciation and amortization
    
67,817
      
68,147
      
67,419
      
66,979
      
270,362
      
69,228
      
71,602
  
Asset impairment
    
1,083
      
7,246
      
-
      
19,348
      
27,677
      
-
      
2,154
  
Equity in (earnings) loss of unconsolidated ventures
    
(99
)
    
61
      
249
      
3,277
      
3,488
      
(115
)
    
(445
)
Distributions from unconsolidated ventures from cumulative share of net earnings
    
206
      
809
      
420
      
72
      
1,507
      
668
      
773
  
Amortization of deferred gain
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
    
(1,093
)
    
(1,093
)
Amortization of entrance fees
    
(6,066
)
    
(6,310
)
    
(6,459
)
    
(6,527
)
    
(25,362
)
    
(7,133
)
    
(7,032
)
Proceeds from deferred entrance fee revenue
    
7,000
      
10,377
      
12,926
      
9,802
      
40,105
      
9,237
      
12,124
  
Deferred income tax benefit
    
(135
)
    
(169
)
    
(131
)
    
(90
)
    
(525
)
    
-
      
-
  
Change in deferred lease liability
    
1,642
      
1,564
      
2,118
      
1,344
      
6,668
      
748
      
684
  
Change in fair value of derivatives and amortization
    
233
      
278
      
(140
)
    
(7
)
    
364
      
(135
)
    
(1,836
)
Loss (gain) on sale of assets
    
114
      
58
      
73
      
87
      
332
      
(926
)
    
24
  
Loss on acquisition
    
636
      
-
      
-
      
-
      
636
      
-
      
-
  
Gain on facility lease termination
    
(2,780
)
    
-
      
-
      
(8,804
)
    
(11,584
)
    
-
      
-
  
Change in future service obligation
    
-
      
-
      
-
      
2,188
      
2,188
      
-
      
-
  
Non-cash stock-based compensation
    
6,435
      
6,729
      
6,021
      
6,335
      
25,520
      
6,894
      
6,988
  
Other
    
-
      
-
      
(487
)
    
-
      
(487
)
    
-
      
-
  
Changes in operating assets and liabilities:
                                                        
Accounts receivable, net
    
(5,317
)
    
(3,484
)
    
709
      
4,677
      
(3,415
)
    
(9,064
)
    
1,736
  
Prepaid expenses and other assets, net
    
(1,681
)
    
7,622
      
(2,793
)
    
5,539
      
8,687
      
9,140
      
(12,679
)
Accounts payable and accrued expenses
    
(23,705
)
    
14,410
      
17,352
      
(3,203
)
    
4,854
      
(10,871
)
    
12,926
  
Tenant refundable fees and security deposits
    
(442
)
    
(675
)
    
(439
)
    
9
      
(1,547
)
    
(335
)
    
(258
)
Deferred revenue
    
12,168
      
(3,701
)
    
(4,098
)
    
7,750
      
12,119
      
(5,316
)
    
(1,018
)
Net cash provided by operating activities
    
45,693
      
82,854
      
79,431
      
82,991
      
290,969
      
64,485
      
80,343
  
Cash Flows from Investing Activities
                                                        
Increase in lease security deposits and lease acquisition deposits, net
    
(2,217
)
    
(4,119
)
    
(431
)
    
(1,232
)
    
(7,999
)
    
(1,952
)
    
(1,066
)
Decrease (increase) in cash and escrow deposits — restricted
    
8,442
      
(3,038
)
    
(7,806
)
    
(2,408
)
    
(4,810
)
    
826
      
2,195
  
Purchase of marketable securities — restricted
    
(761
)
    
(341
)
    
(351
)
    
(104
)
    
(1,557
)
    
-
      
-
  
Sale of marketable securities — restricted
    
-
      
-
      
-
      
35,124
      
35,124
      
-
      
-
  
Additions to property, plant and equipment and leasehold intangibles, net
    
(41,533
)
    
(50,433
)
    
(59,415
)
    
(57,031
)
    
(208,412
)
    
(51,614
)
    
(48,677
)
Acquisition of assets, net of related payables and cash received
    
(104,984
)
    
(4,975
)
    
(1,349
)
    
(161,215
)
    
(272,523
)
    
(2
)
    
(4,833
)
Issuance of (payment on) notes receivable, net
    
(439
)
    
-
      
(152
)
    
722
      
131
      
(17
)
    
(47
)
Investment in unconsolidated ventures
    
-
      
(571
)
    
-
      
(4,797
)
    
(5,368
)
    
(5,843
)
    
(2,149
)
Distributions received from unconsolidated ventures
    
100
      
84
      
72
      
94
      
350
      
-
      
-
  
Proceeds from sale of assets, net
    
-
      
325
      
-
      
8,918
      
9,243
      
440
      
7,114
  
Other
    
-
      
-
      
487
      
-
      
487
      
-
      
-
  
Net cash used in investing activities
    
(141,392
)
    
(63,068
)
    
(68,945
)
    
(181,929
)
    
(455,334
)
    
(58,162
)
    
(47,463
)
Cash Flows from Financing Activities
                                                        
Proceeds from debt
    
175,838
      
17,178
      
591
      
178,684
      
372,291
      
8,955
      
418,667
  
Repayment of debt and capital lease obligations
    
(86,068
)
    
(32,585
)
    
(18,304
)
    
(54,878
)
    
(191,835
)
    
(17,707
)
    
(470,825
)
Proceeds from line of credit
    
130,000
      
75,000
      
75,000
      
95,000
      
375,000
      
105,000
      
85,000
  
Repayment of line of credit
    
(110,000
)
    
(85,000
)
    
(70,000
)
    
(95,000
)
    
(360,000
)
    
(140,000
)
    
(60,000
)
Payment of financing costs, net of related payables
    
(2,378
)
    
(336
)
    
(96
)
    
(2,753
)
    
(5,563
)
    
(2,200
)
    
(5,695
)
Refundable entrance fees:
                                                    
-
  
   Proceeds from refundable entrance fees
    
7,989
      
9,317
      
12,206
      
13,088
      
42,600
      
7,636
      
11,754
  
Refunds of entrance fees
    
(8,102
)
    
(5,429
)
    
(6,024
)
    
(7,801
)
    
(27,356
)
    
(9,320
)
    
(7,456
)
Cash portion of loss on extinguishment of debt
    
(118
)
    
-
      
-
      
-
      
(118
)
    
-
      
(453
)
Purchase of derivatives and payment of swap termination
    
(99
)
    
(1,190
)
    
-
      
(619
)
    
(1,908
)
    
-
      
(1,489
)
Other
    
(86
)
    
(178
)
    
(31
)
    
(47
)
    
(342
)
    
315
      
321
  
   Net cash provided by (used in) financing activities
    
106,976
      
(23,223
)
    
(6,658
)
    
125,674
      
202,769
      
(47,321
)
    
(30,176
)
            Net increase (decrease) in cash and cash equivalents
    
11,277
      
(3,437
)
    
3,828
      
26,736
      
38,404
      
(40,998
)
    
2,704
  
            Cash and cash equivalents at beginning of period
    
30,836
      
42,113
      
38,676
      
42,504
      
30,836
      
69,240
      
28,242
  
            Cash and cash equivalents at end of period
  
$
42,113
    
$
38,676
    
$
42,504
    
$
69,240
    
$
69,240
    
$
28,242
    
$
30,946
  
 
 
 
 
 
11