EX-99.2 3 exhibit99_2.htm SUPPLEMENTAL INFORMATION
Brookdale Senior Living Inc.
Corporate Overview - selected financial information
As of December 31, 2013
 
Corporate Overview
Brookdale Senior Living Inc. ("Brookdale") 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 December 31, 2013, the Company operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 649 communities in 36 states and the ability to serve approximately 67,000 residents.  Through Brookdale Ancillary Services, 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
Q4 2013
Resident and Management
Fees
    
 
Percentage of
Q4 2013 Facility Operating
Income
    
 
Percentage of FY 2013
Resident
and Management
Fees
    
 
Percentage of FY 2013 Facility Operating
Income
  
Owned
    
225
      
23,283
      
42.3
%
    
42.1
%
    
42.2
%
    
41.5
%
Leased
    
329
      
25,819
      
46.8
%
    
50.0
%
    
47.1
%
    
49.7
%
Brookdale Ancillary Services
    
N/
A
    
N/
A
    
9.6
%
    
4.3
%
    
9.5
%
    
5.2
%
Managed
    
95
      
17,422
      
1.3
%
    
3.6
%
    
1.2
%
    
3.6
%
    Total
    
649
      
66,524
      
100.0
%
    
100.0
%
    
100.0
%
    
100.0
%
 
                                                
Operating Type - By Segment
                                                
Retirement Centers
    
76
      
14,549
      
20.7
%
    
25.8
%
    
20.7
%
    
25.4
%
Assisted Living
    
438
      
22,176
      
41.5
%
    
44.8
%
    
41.3
%
    
44.6
%
CCRCs - Rental
    
26
      
6,504
      
15.3
%
    
12.2
%
    
15.6
%
    
12.5
%
CCRCs - Entry Fee
    
14
      
5,873
      
11.6
%
    
9.3
%
    
11.7
%
    
8.7
%
Brookdale Ancillary Services
    
N/
A
    
N/
A
    
9.6
%
    
4.3
%
    
9.5
%
    
5.2
%
Management Services
    
95
      
17,422
      
1.3
%
    
3.6
%
    
1.2
%
    
3.6
%
    Total
    
649
      
66,524
      
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
      
Q3
      
Q4
    
Full Year(1)
  
Reported CFFO
  
$
0.45
    
$
0.51
    
$
0.50
    
$
0.50
    
$
1.96
    
$
0.55
    
$
0.58
    
$
0.57
    
$
0.68
    
$
2.38
  
Add: integration, transaction-related and EMR roll-out costs
    
0.03
      
0.06
      
0.04
      
0.06
      
0.19
      
0.02
      
0.03
      
0.04
      
0.03
      
0.12
  
Adjusted CFFO
  
$
0.48
    
$
0.57
    
$
0.54
    
$
0.56
    
$
2.15
    
$
0.57
    
$
0.61
    
$
0.61
    
$
0.71
    
$
2.50
  
 
                                                                                
Weighted average shares (000's)
    
121,145
      
121,708
      
122,493
      
122,608
              
122,823
      
123,405
      
124,128
      
124,308
          
Period end outstanding shares (excluding unvested restricted shares) (000's)
    
121,197
      
122,474
      
122,575
      
122,738
              
123,040
      
124,061
      
124,285
      
124,354
          
 
(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 fourth quarter earnings release for non-GAAP financial measure definitions and reconciliations.
 
 
 
 
1
Brookdale Senior Living Inc.
 
 
 
 
 
 
 
 
Segment Operating Information
 
 
 
 
 
 
 
 
As of December 31, 2013
 
 
 
 
 
 
 
 
 
Senior Housing Operating Information
 
  
FY 2012
    
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
  
Retirement Centers
                                  
                                   
 
Number of communities (period end)
    
76
      
76
      
76
      
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
      
14,444
      
14,454
      
14,439
  
Weighted average unit occupancy
    
88.8
%
    
88.8
%
    
89.1
%
    
89.7
%
    
89.1
%
    
89.5
%
    
89.4
%
    
90.2
%
    
90.1
%
    
89.8
%
Senior Housing average monthly revenue per unit(2)
  
$
3,235
    
$
3,268
    
$
3,275
    
$
3,276
    
$
3,263
    
$
3,328
    
$
3,362
    
$
3,408
    
$
3,426
    
$
3,381
  
 
                                                                                
Assisted Living
                                                                                
Number of communities (period end)
    
434
      
434
      
434
      
433
      
433
      
431
      
432
      
432
      
438
      
438
  
Total average units(1)
    
21,635
      
21,637
      
21,652
      
21,577
      
21,625
      
21,556
      
21,499
      
21,513
      
22,149
      
21,679
  
Weighted average unit occupancy
    
88.5
%
    
88.6
%
    
89.1
%
    
89.7
%
    
88.9
%
    
89.1
%
    
89.4
%
    
90.0
%
    
90.1
%
    
89.7
%
Senior Housing average monthly revenue per unit(2)
  
$
4,379
    
$
4,390
    
$
4,393
    
$
4,401
    
$
4,390
    
$
4,523
    
$
4,519
    
$
4,518
    
$
4,480
    
$
4,510
  
 
                                                                                
CCRCs - Rental
                                                                                
Number of communities (period end)
    
26
      
27
      
27
      
27
      
27
      
27
      
27
      
27
      
26
      
26
  
Total average units(1)
    
6,626
      
6,659
      
6,691
      
6,691
      
6,667
      
6,687
      
6,684
      
6,687
      
6,617
      
6,669
  
Weighted average unit occupancy
    
86.5
%
    
85.8
%
    
85.8
%
    
87.0
%
    
86.3
%
    
87.6
%
    
86.2
%
    
86.7
%
    
86.8
%
    
86.8
%
Senior Housing average monthly revenue per unit(2)
  
$
5,536
    
$
5,561
    
$
5,619
    
$
5,639
    
$
5,588
    
$
5,709
    
$
5,649
    
$
5,759
    
$
5,742
    
$
5,715
  
 
                                                                                
CCRCs - Entry Fee
                                                                                
Number of communities (period end)
    
14
      
14
      
14
      
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
      
5,308
      
5,329
      
5,303
  
Weighted average unit occupancy
    
83.7
%
    
83.4
%
    
83.4
%
    
84.1
%
    
83.7
%
    
84.6
%
    
83.8
%
    
84.1
%
    
84.3
%
    
84.2
%
Senior Housing average monthly revenue per unit(2)
  
$
5,055
    
$
4,963
    
$
4,975
    
$
4,921
    
$
4,978
    
$
5,011
    
$
5,025
    
$
4,994
    
$
5,023
    
$
5,013
  
 
                                                                                
Senior Housing Totals
                                                                                
Number of communities (period end)
    
550
      
551
      
551
      
550
      
550
      
548
      
549
      
549
      
554
      
554
  
Total average units(1)
    
47,884
      
47,946
      
48,009
      
47,950
      
47,947
      
47,953
      
47,907
      
47,952
      
48,549
      
48,090
  
Weighted average unit occupancy
    
87.8
%
    
87.7
%
    
88.0
%
    
88.7
%
    
88.0
%
    
88.5
%
    
88.3
%
    
89.0
%
    
89.0
%
    
88.7
%
Senior Housing average monthly revenue per unit(2)
  
$
4,257
    
$
4,266
    
$
4,279
    
$
4,282
    
$
4,271
    
$
4,375
    
$
4,373
    
$
4,397
    
$
4,387
    
$
4,383
  
 
                                                                                
Management Services 
                                                                                
Number of communities (period end)
    
96
      
96
      
97
      
97
      
97
      
101
      
101
      
102
      
95
      
95
  
Total average units(1)
    
18,253
      
18,144
      
18,081
      
18,141
      
18,155
      
18,114
      
18,310
      
18,291
      
17,618
      
18,083
  
Weighted average occupancy
    
84.3
%
    
84.0
%
    
84.3
%
    
85.4
%
    
84.5
%
    
84.9
%
    
84.9
%
    
85.7
%
    
86.1
%
    
85.4
%
Average monthly revenue per unit(2)
  
$
3,373
    
$
3,369
    
$
3,386
    
$
3,399
    
$
3,382
    
$
3,460
    
$
3,505
    
$
3,499
    
$
3,588
    
$
3,512
  
 
Brookdale Ancillary Services Operating Information
 
FY 2012
 
 
FY 2013
 
Q1
Q2
Q3
Q4
 
 
Q1
Q2
Q3
Q4
Brookdale Ancillary Services
 
 
 
 
 
 
 
 
 
 
Brookdale units served:
 
 
 
 
 
 
 
 
 
 
Outpatient Therapy consolidated
        35,909
         36,844
        38,016
         37,961
 
 
      38,017
     38,075
     38,253
     38,308
Home Health consolidated
        32,655
         31,944
        32,650
         32,242
 
 
      32,389
     32,864
     33,940
     33,894
Outpatient Therapy non-consolidated
          9,685
           9,861
        12,540
         13,448
 
 
      13,502
     14,177
     14,733
     14,017
Home Health non-consolidated
          4,735
         10,667
        12,597
         13,569
 
 
      13,326
     13,232
     13,601
     12,884
Total Brookdale units served:
 
 
 
 
 
 
 
 
 
 
Outpatient Therapy
        45,594
         46,705
        50,556
         51,409
 
 
      51,519
     52,252
     52,986
     52,325
Home Health
        37,390
         42,611
        45,247
         45,811
 
 
      45,715
     46,096
     47,541
     46,778
 
 
 
 
 
 
 
 
 
 
 
Outpatient Therapy treatment codes
907,816
957,364
939,241
762,233
 
 
821,308
840,076
818,758
844,987
Home Health average census
3,448
3,554
3,651
4,187
 
 
4,289
4,366
4,574
4,762
 
 
(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 Brookdale Ancillary Services segment revenue, divided by average occupied units.
 
2
Brookdale Senior Living Inc.
Senior Housing Data by Ownership Type
As of December 31, 2013
 
Senior Housing Operating Information
 
 
  
FY 2012
    
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4 (1)
    
Q1
      
Q2
      
Q3 (2)
    
Q4
  
 
                                                                
Owned Properties
                                                                
Number of communities (period end)
    
209
      
210
      
210
      
221
      
219
      
220
      
220
      
225
  
Total average units(3)
    
21,281
      
21,350
      
21,425
      
22,243
      
22,243
      
22,153
      
22,190
      
22,754
  
Weighted average unit occupancy
    
87.2
%
    
87.4
%
    
87.6
%
    
89.0
%
    
88.8
%
    
88.7
%
    
89.1
%
    
89.2
%
Senior Housing average monthly revenue per unit(4)
  
$
4,302
    
$
4,297
    
$
4,318
    
$
4,323
    
$
4,416
    
$
4,416
    
$
4,438
    
$
4,402
  
 
                                                                
Leased Properties with Bargain Purchase Options           
                                          
Number of communities (period end)
    
18
      
18
      
18
      
9
      
9
      
9
      
9
      
9
  
Total average units(3)
    
3,263
      
3,263
      
3,261
      
2,948
      
2,949
      
2,945
      
2,944
      
2,943
  
Weighted average unit occupancy
    
88.4
%
    
87.6
%
    
88.0
%
    
88.3
%
    
88.2
%
    
88.0
%
    
88.6
%
    
88.5
%
Senior Housing average monthly revenue per unit(4)
  
$
3,878
    
$
3,874
    
$
3,903
    
$
3,802
    
$
3,891
    
$
3,896
    
$
3,929
    
$
4,001
  
 
                                                                
Leased Properties with Fair Market Value Purchase
Options        
                                          
Number of communities (period end)
    
77
      
77
      
77
      
74
      
74
      
74
      
75
      
75
  
Total average units(3)
    
3,929
      
3,927
      
3,927
      
3,364
      
3,364
      
3,364
      
3,413
      
3,438
  
Weighted average unit occupancy
    
91.1
%
    
91.2
%
    
92.0
%
    
91.8
%
    
90.8
%
    
90.6
%
    
90.9
%
    
90.9
%
Senior Housing average monthly revenue per unit(4)
  
$
4,384
    
$
4,423
    
$
4,482
    
$
4,549
    
$
4,675
    
$
4,638
    
$
4,645
    
$
4,637
  
 
                                                                
Leased Properties without Purchase Options           
                                          
Number of communities (period end)
    
246
      
246
      
246
      
246
      
246
      
246
      
245
      
245
  
Total average units(3)
    
19,411
      
19,406
      
19,396
      
19,395
      
19,397
      
19,445
      
19,405
      
19,414
  
Weighted average unit occupancy
    
87.6
%
    
87.3
%
    
87.6
%
    
87.9
%
    
87.9
%
    
87.6
%
    
88.5
%
    
88.6
%
Senior Housing average monthly revenue per unit(4)
  
$
4,241
    
$
4,264
    
$
4,256
    
$
4,256
    
$
4,344
    
$
4,348
    
$
4,381
    
$
4,377
  
 
                                                                
Senior Housing Totals
                                                                
Number of communities (period end)
    
550
      
551
      
551
      
550
      
548
      
549
      
549
      
554
  
Total average units(3)
    
47,884
      
47,946
      
48,009
      
47,950
      
47,953
      
47,907
      
47,952
      
48,549
  
Weighted average unit occupancy
    
87.8
%
    
87.7
%
    
88.0
%
    
88.7
%
    
88.5
%
    
88.3
%
    
89.0
%
    
89.0
%
Senior Housing average monthly revenue per unit(4)
  
$
4,257
    
$
4,266
    
$
4,279
    
$
4,282
    
$
4,375
    
$
4,373
    
$
4,397
    
$
4,387
  
 
(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)
During the three months ended September 30, 2013, the Company amended a lease agreement for one community and, in connection therewith, obtained a fair market value purchase option. The results of operations of the community are included within Leased Properties with Fair Market Value Purchase Options beginning in the third quarter of FY 2013.  Prior quarters have not been recast.
 
(3)
Total average units operated represent the average units operated during the period, excluding equity homes.
 
(4)
Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units.
 
3
Brookdale Senior Living Inc.
Segment Financial Data
As of December 31, 2013
 
Financial Data
($ in 000s)
 
Retirement Centers
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
       124,512
   125,813
   126,401
   127,176
     503,902
 
   128,922
   130,170
   133,272
   133,920
     526,284
Expenses
         73,521
     73,138
     75,679
     75,979
     298,317
 
     75,588
     75,993
     76,452
     75,969
     304,002
Segment Operating Income
         50,991
     52,675
     50,722
     51,197
     205,585
 
     53,334
     54,177
     56,820
     57,951
     222,282
Segment Operating Margin
41.0%
41.9%
40.1%
40.3%
40.8%
 
41.4%
41.6%
42.6%
43.3%
42.2%
 
 
 
 
 
 
 
 
 
 
 
 
Assisted Living
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
       251,352
   252,399
   254,179
   255,407
  1,013,337
 
   260,615
   260,497
   262,524
   268,232
  1,051,868
Expenses
       160,789
   162,233
   163,017
   166,114
     652,153
 
   164,330
   164,316
   165,774
   167,770
     662,190
Segment Operating Income
         90,563
     90,166
     91,162
     89,293
     361,184
 
     96,285
     96,181
     96,750
   100,462
     389,678
Segment Operating Margin
36.0%
35.7%
35.9%
35.0%
35.6%
 
36.9%
36.9%
36.9%
37.5%
37.0%
 
 
 
 
 
 
 
 
 
 
 
 
CCRCs - Rental
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
         95,112
     95,258
     96,681
     98,428
     385,479
 
   100,327
     97,562
   100,076
     99,010
     396,975
Expenses
         67,093
     68,494
     71,581
     72,248
     279,416
 
     71,250
     71,995
     73,063
     71,641
     287,949
Segment Operating Income
         28,019
     26,764
     25,100
     26,180
     106,063
 
     29,077
     25,567
     27,013
     27,369
     109,026
Segment Operating Margin
29.5%
28.1%
26.0%
26.6%
27.5%
 
29.0%
26.2%
27.0%
27.6%
27.5%
 
 
 
 
 
 
 
 
 
 
 
 
CCRCs - Entry Fee
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
         71,719
     70,858
     71,413
     71,711
     285,701
 
     74,308
     74,016
     74,110
     75,322
     297,756
Expenses
         54,914
     55,341
     56,249
     57,792
     224,296
 
     54,737
     56,244
     55,892
     54,490
     221,363
Segment Operating Income
         16,805
     15,517
     15,164
     13,919
       61,405
 
     19,571
     17,772
     18,218
     20,832
       76,393
Segment Operating Margin
23.4%
21.9%
21.2%
19.4%
21.5%
 
26.3%
24.0%
24.6%
27.7%
25.7%
 
 
 
 
 
 
 
 
 
 
 
 
Bridge to Cash Basis for CCRCs - Entry Fee segment
 
 
 
 
 
 
Revenue
         71,719
     70,858
     71,413
     71,711
     285,701
 
     74,308
     74,016
     74,110
     75,322
     297,756
Less: revenue amortization (non-cash)
         (6,066)
      (6,310)
      (6,459)
      (6,527)
     (25,362)
 
      (7,133)
      (7,032)
     (7,013)
     (7,831)
     (29,009)
Add: net entrance fees (cash)
           6,887
     14,265
     19,108
     15,089
       55,349
 
       7,553
     16,422
     11,370
     21,661
       57,006
Adjusted revenue
         72,540
     78,813
     84,062
     80,273
     315,688
 
     74,728
     83,406
     78,467
     89,152
     325,753
Expenses
         54,914
     55,341
     56,249
     57,792
     224,296
 
     54,737
     56,244
     55,892
     54,490
     221,363
Adjusted Segment Operating Income
         17,626
     23,472
     27,813
     22,481
       91,392
 
     19,991
     27,162
     22,575
     34,662
     104,390
Adjusted Segment Operating Margin
24.3%
29.8%
33.1%
28.0%
29.0%
 
26.8%
32.6%
28.8%
38.9%
32.0%
 
          
Total Senior Housing
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
       542,695
   544,328
   548,674
   552,722
  2,188,419
 
   564,172
   562,245
   569,982
   576,484
  2,272,883
Expenses
       356,317
   359,206
   366,526
   372,133
  1,454,182
 
   365,905
   368,548
   371,181
   369,870
  1,475,504
Operating Income
       186,378
   185,122
   182,148
   180,589
     734,237
 
   198,267
   193,697
   198,801
   206,614
     797,379
Operating Margin
34.3%
34.0%
33.2%
32.7%
33.6%
 
35.1%
34.5%
34.9%
35.8%
35.1%
G&A Allocation (1)
         22,751
     20,876
     21,402
     20,374
       85,403
 
     25,526
     23,224
     22,647
     24,658
       96,055
G&A Allocation as a % of revenue
4.2%
3.8%
3.9%
3.7%
3.9%
 
4.5%
4.1%
4.0%
4.3%
4.2%
Adjusted Operating Income
       163,627
   164,246
   160,746
   160,215
     648,834
 
   172,741
   170,473
   176,154
   181,956
     701,324
Adjusted Operating Margin
30.2%
30.2%
29.3%
29.0%
29.6%
 
30.6%
30.3%
30.9%
31.6%
30.9%
 
4
Brookdale Senior Living Inc.
Segment Financial Data
As of December 31, 2013
 
Financial Data (continued)
 
 
 
 
 
 
 
 
 
 
 
($ in 000s)
 
 
 
 
 
 
 
 
 
 
 
 
Brookdale Ancillary Services
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
         53,854
     57,722
     56,856
     56,085
     224,517
 
     60,198
     58,693
     61,162
     62,097
     242,150
Expenses
         42,452
     44,309
     44,941
     45,035
     176,737
 
     47,098
     47,479
     49,398
     52,466
     196,441
Segment Operating Income
         11,402
     13,413
     11,915
     11,050
       47,780
 
     13,100
     11,214
     11,764
       9,631
       45,709
Segment Operating Margin
21.2%
23.2%
21.0%
19.7%
21.3%
 
21.8%
19.1%
19.2%
15.5%
18.9%
G&A Allocation (1)
           5,954
       5,453
       5,467
       5,358
       22,232
 
       6,055
       6,005
       5,516
       5,806
       23,382
G&A Allocation as a % of revenue
11.1%
9.4%
9.6%
9.6%
9.9%
 
10.1%
10.2%
9.0%
9.3%
9.7%
Adjusted Segment Operating Income
           5,448
       7,960
       6,448
       5,692
       25,548
 
       7,045
       5,209
       6,248
       3,825
       22,327
Adjusted Segment Operating Margin
10.1%
13.8%
11.3%
10.1%
11.4%
 
11.7%
8.9%
10.2%
6.2%
9.2%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Senior Housing and Brookdale Ancillary Services
   
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
       596,549
   602,050
   605,530
   608,807
  2,412,936
 
   624,370
   620,938
   631,144
   638,581
  2,515,033
Expenses
       398,769
   403,515
   411,467
   417,168
  1,630,919
 
   413,003
   416,027
   420,579
   422,336
  1,671,945
Operating Income
       197,780
   198,535
   194,063
   191,639
     782,017
 
   211,367
   204,911
   210,565
   216,245
     843,088
Operating Margin
33.2%
33.0%
32.0%
31.5%
32.4%
 
33.9%
33.0%
33.4%
33.9%
33.5%
G&A Allocation (1)
         28,705
     26,329
     26,869
     25,732
     107,635
 
     31,581
     29,229
     28,163
     30,464
     119,437
G&A Allocation as a % of revenue
4.8%
4.4%
4.4%
4.2%
4.5%
 
5.1%
4.7%
4.5%
4.8%
4.7%
Adjusted Operating Income
       169,075
   172,206
   167,194
   165,907
     674,382
 
   179,786
   175,682
   182,402
   185,781
     723,651
Adjusted Operating Margin
28.3%
28.6%
27.6%
27.3%
27.9%
 
28.8%
28.3%
28.9%
29.1%
28.8%
 
 
 
 
 
 
 
 
 
 
 
 
Management Services
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue (Management Fees)
           7,444
       7,499
       7,407
       8,436
       30,786
 
       7,609
       7,744
       7,622
       8,150
       31,125
Expenses (G&A Allocation) (1)
           5,929
       5,325
       5,644
       5,311
       22,209
 
       6,031
       6,192
       6,106
       6,334
       24,663
Segment Operating Income
           1,515
       2,174
       1,763
       3,125
         8,577
 
       1,578
       1,552
       1,516
       1,816
         6,462
Segment Operating Margin
20.4%
29.0%
23.8%
37.0%
27.9%
 
20.7%
20.0%
19.9%
22.3%
20.8%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Senior Housing, Brookdale Ancillary and Management Services
 
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
       603,993
   609,549
   612,937
   617,243
  2,443,722
 
   631,979
   628,682
   638,766
   646,731
  2,546,158
Expenses
       398,769
   403,515
   411,467
   417,168
  1,630,919
 
   413,003
   416,027
   420,579
   422,336
  1,671,945
Operating Income
       205,224
   206,034
   201,470
   200,075
     812,803
 
   218,976
   212,655
   218,187
   224,395
     874,213
Operating Margin
34.0%
33.8%
32.9%
32.4%
33.3%
 
34.6%
33.8%
34.2%
34.7%
34.3%
G&A Allocation (1)
         34,634
     31,654
     32,513
     31,043
     129,844
 
     37,612
     35,421
     34,269
     36,798
     144,100
G&A Allocation as a % of revenue
5.7%
5.2%
5.3%
5.0%
5.3%
 
6.0%
5.6%
5.4%
5.7%
5.7%
Adjusted Operating Income
       170,590
   174,380
   168,957
   169,032
     682,959
 
   181,364
   177,234
   183,918
   187,597
     730,113
Adjusted Operating Margin
28.2%
28.6%
27.6%
27.4%
27.9%
 
28.7%
28.2%
28.8%
29.0%
28.7%
 
(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 December 31, 2013
 
Financial Data
($ in 000s)
 
Owned Properties
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4 (1)
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
       243,302
       244,720
       247,473
       260,980
       996,475
 
       266,322
       265,139
       267,922
       273,439
    1,072,822
Expenses
       163,822
       165,862
       171,356
       177,350
       678,390
 
       175,672
       176,623
       178,382
       178,941
       709,618
Segment Operating Income
         79,480
         78,858
         76,117
         83,630
       318,085
 
         90,650
         88,516
         89,540
         94,498
       363,204
Segment Operating Margin
32.7%
32.2%
30.8%
32.0%
31.9%
 
34.0%
33.4%
33.4%
34.6%
33.9%
 
 
 
 
 
 
 
 
 
 
 
 
Bridge to Cash Basis for CCRCs - Entry Fee
 
 
 
 
 
 
Revenue
       243,302
       244,720
       247,473
       260,980
       996,475
 
       266,322
       265,139
       267,922
       273,439
    1,072,822
Less: revenue amortization (non-cash)
          (3,692)
          (4,208)
          (4,294)
          (4,265)
        (16,459)
 
          (4,664)
          (4,821)
          (4,660)
          (5,404)
        (19,549)
Add: net entrance fees (cash)
           5,802
         10,487
         14,234
         11,481
         42,004
 
           5,449
         10,936
           8,014
         13,694
         38,093
Adjusted revenue
       245,412
       250,999
       257,413
       268,196
    1,022,020
 
       267,107
       271,254
       271,276
       281,729
    1,091,366
Expenses
       163,822
       165,862
       171,356
       177,350
       678,390
 
       175,672
       176,623
       178,382
       178,941
       709,618
Adjusted Segment Operating Income
         81,590
         85,137
         86,057
         90,846
       343,630
 
         91,435
         94,631
         92,894
       102,788
       381,748
Adjusted Segment Operating Margin
33.2%
33.9%
33.4%
33.9%
33.6%
 
34.2%
34.9%
34.2%
36.5%
35.0%
 
 
 
 
 
 
 
 
 
 
 
 
Leased Properties with Bargain Purchase Options
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4 (1)
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
         35,394
         34,853
         35,362
         31,494
       137,103
 
         32,254
         32,096
         32,667
         33,177
       130,194
Expenses
         23,287
         23,433
         24,264
         21,334
         92,318
 
         20,766
         21,308
         21,230
         21,518
         84,822
Segment Operating Income
         12,107
         11,420
         11,098
         10,160
         44,785
 
         11,488
         10,788
         11,437
         11,659
         45,372
Segment Operating Margin
34.2%
32.8%
31.4%
32.3%
32.7%
 
35.6%
33.6%
35.0%
35.1%
34.8%
 
 
 
 
 
 
 
 
 
 
 
 
Leased Properties with Fair Market Value Purchase Options
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4 (1)
Full Year
 
Q1
Q2
Q3 (2)
Q4
Full Year
Revenue
         47,104
         47,534
         48,560
         42,140
       185,338
 
         42,842
         42,408
         43,235
         43,474
       171,959
Expenses
         29,974
         30,192
         28,999
         27,443
       116,608
 
         26,940
         27,011
         27,228
         27,293
       108,472
Segment Operating Income
         17,130
         17,342
         19,561
         14,697
         68,730
 
         15,902
         15,397
         16,007
         16,181
         63,487
Segment Operating Margin
36.4%
36.5%
40.3%
34.9%
37.1%
 
37.1%
36.3%
37.0%
37.2%
36.9%
 
 
 
 
 
 
 
 
 
 
 
 
Leased Properties without Purchase Options
 
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3 (2)
Q4
Full Year
Revenue
       216,895
       217,221
       217,279
       218,108
       869,503
 
       222,754
       222,602
       226,158
       226,394
       897,908
Expenses
       139,234
       139,719
       141,907
       146,006
       566,866
 
       142,527
       143,606
       144,341
       142,118
       572,592
Segment Operating Income
         77,661
         77,502
         75,372
         72,102
       302,637
 
         80,227
         78,996
         81,817
         84,276
       325,316
Segment Operating Margin
35.8%
35.7%
34.7%
33.1%
34.8%
 
36.0%
35.5%
36.2%
37.2%
36.2%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Senior Housing
FY 2012
 
FY 2013
(GAAP Basis)
Q1
Q2
Q3
Q4
Full Year
 
Q1
Q2
Q3
Q4
Full Year
Revenue
       542,695
       544,328
       548,674
       552,722
    2,188,419
 
       564,172
       562,245
       569,982
       576,484
    2,272,883
Expenses
       356,317
       359,206
       366,526
       372,133
    1,454,182
 
       365,905
       368,548
       371,181
       369,870
    1,475,504
Operating Income
       186,378
       185,122
       182,148
       180,589
       734,237
 
       198,267
       193,697
       198,801
       206,614
       797,379
Operating Margin
34.3%
34.0%
33.2%
32.7%
33.6%
 
35.1%
34.5%
34.9%
35.8%
35.1%
 
(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)  During the three months ended September 30, 2013, the Company amended a lease agreement for one community and, in connection therewith, obtained a fair market value purchase option. The results of operations of the community are included within Leased Properties with Fair Market Value Purchase Options beginning in the third quarter of FY 2013.  Prior quarters have not been recast.
 
6
Brookdale Senior Living Inc.
Same Community and Capital Expenditure Information
As of December 31, 2013
 
Same Community Information
($ in 000s, except Avg. Mo. Revenue/Unit)
  
Senior Housing
    
Senior Housing
  
 
  
Three Months Ended December 31,
    
Year Ended December 31,
  
 
  
2013
    
2012
    
% Change
    
2013
    
2012
    
% Change
  
Revenue
  
$
527,736
    
$
512,769
      
2.9
%
  
$
2,094,416
    
$
2,026,393
      
3.4
%
Operating Expense
    
345,588
      
350,802
      
-1.5
%
    
1,383,293
      
1,367,445
      
1.2
%
Facility Operating Income
  
$
182,148
    
$
161,967
      
12.5
%
  
$
711,123
    
$
658,948
      
7.9
%
Facility Operating Margin
    
34.5
%
    
31.6
%
    
2.9
%
    
34.0
%
    
32.5
%
    
1.5
%
 
                                                
# Communities
    
524
      
524
              
523
      
523
          
Avg. Period Occupancy
    
89.0
%
    
88.6
%
    
0.4
%
    
88.8
%
    
88.0
%
    
0.8
%
Avg. Mo. Revenue/Unit
  
$
4,423
    
$
4,315
      
2.5
%
  
$
4,406
    
$
4,301
      
2.4
%
 
                                                
 
                                                
 
  
Brookdale Ancillary Services
    
Brookdale Ancillary Services
  
 
  
Three Months Ended December 31,
    
Year Ended December 31,
  
 
    
2013
      
2012
    
% Change
      
2013
      
2012
    
% Change
  
Revenue
  
$
32,580
    
$
33,533
      
-2.8
%
  
$
113,868
    
$
126,081
      
-9.7
%
Operating Expense
    
27,090
      
26,672
      
1.6
%
    
92,174
      
98,417
      
-6.3
%
Facility Operating Income
  
$
5,490
    
$
6,861
      
-20.0
%
  
$
21,694
    
$
27,664
      
-21.6
%
Facility Operating Margin
    
16.9
%
    
20.5
%
    
-3.6
%
    
19.1
%
    
21.9
%
    
-2.8
%
 
                                                
# Units served (1)
    
26,821
      
26,821
              
24,187
      
24,187
          
 
(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
December 31,
  
Type
  
2013
    
2012
  
Recurring
  
$
10,786
    
$
10,668
  
Reimbursements
    
-
      
(500
)
    Net Recurring
    
10,786
      
10,168
  
Corporate (2)
    
3,282
      
7,377
  
EBITDA-enhancing / Major Projects (3)
    
50,598
      
22,979
  
Program Max / Development, net (4)
    
17,119
      
12,328
  
        Net Total Capital Expenditures (5)
  
$
81,785
    
$
52,852
  
 
(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 $14.2 million and $3.7 million for the three months ended December 31, 2013 and 2012, respectively.
(5)  Approximately $11.2 million and $11.6 million of expense was recognized during the three months ended December 31, 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 December 31, 2013
($ in 000s)
 
Debt Maturities and Scheduled Principal Repayments
 
 
Maturities
 
  
Mortgage
    
weighted
    
Line of
    
weighted
    
Capital
    
weighted
    
Total
  
 
  
Debt (1)
    
rate (2)
    
Credit
    
rate (2)
    
Leases
    
rate (2)
    
Debt
  
 
  
   
   
   
   
   
   
 
2014
  
$
168,591
      
5.40
%
  
$
-
      
-
    
$
33,363
      
8.28
%
  
$
201,954
  
2015
    
26,333
      
3.99
%
    
-
      
-
      
34,400
      
8.30
%
    
60,733
  
2016
    
58,478
      
4.55
%
    
-
      
-
      
29,772
      
8.39
%
    
88,250
  
2017
    
358,721
      
5.30
%
    
-
      
-
      
61,251
      
8.15
%
    
419,972
  
2018
    
777,085
      
3.41
%
    
30,000
      
3.75
%
    
24,169
      
8.51
%
    
831,254
  
Thereafter
    
917,546
      
3.67
%
    
-
      
-
      
116,869
      
7.89
%
    
1,034,415
  
Total
  
$
2,306,754
      
3.99
%
  
$
30,000
      
3.75
%
  
$
299,824
      
8.14
%
  
$
2,636,578
  
 
Coverage Ratios
 
 
  
Year ended December 31, 2013
  
 
  
   
   
   
Interest/Cash Lease
      
 
  
Units
    
FOI
    
Adj. FOI **
    
Payments
    
Coverage
  
Owned communities
    
23,283
    
$
382,544
    
$
316,233
    
$
96,131
      
3.3x
 
Leased communities *
    
25,819
    
$
456,044
    
$
381,595
    
$
317,625
      
1.2x
 
 
*  The leased communities include the capital leases.
**  Adjusted for 5% management fee and capital expenditures @ $350/unit.
 
Debt Amortization
 
 
  
Year ended December 31,
  
 
  
2013
    
2012
  
Scheduled debt amortization
  
$
50,425
    
$
44,866
  
Lease financing debt amortization - FMV or no purchase option (3)
    
13,927
      
12,120
  
Lease financing debt amortization - bargain purchase option
    
17,244
      
14,470
  
    Total debt amortization
  
$
81,596
    
$
71,456
  
 
Line Availability
 
($000s)
  
12/31/12
    
03/31/13
    
06/30/13
    
09/30/13
    
12/31/13
  
 
  
   
   
   
   
 
Total line commitment
  
$
230,000
    
$
230,000
    
$
250,000
    
$
250,000
    
$
250,000
  
 
                                        
Line availability (6)
  
$
191,436
    
$
198,563
    
$
225,331
    
$
238,565
    
$
250,000
  
Ending line balance
    
80,000
      
45,000
      
70,000
      
45,000
      
30,000
  
Available to draw
  
$
111,436
    
$
153,563
    
$
155,331
    
$
193,565
    
$
220,000
  
Cash and cash equivalents
    
69,240
      
28,242
      
30,946
      
42,690
      
58,511
  
Total liquidity (available to draw + cash)
  
$
180,676
    
$
181,805
    
$
186,277
    
$
236,255
    
$
278,511
  
 
                                        
Total letters of credit outstanding
  
$
78,112
    
$
77,952
    
$
75,031
    
$
71,762
    
$
72,464
  
 
 
Leverage Ratios
 
 
  
   
Annualized
  
 
  
Balance
    
Leverage
  
Debt (1)
  
$
2,306,754
    
 
Capital leases
    
299,824
    
 
   Total Debt
  
$
2,606,578
      
5.6x
 
 
                
Plus: Line of credit (cash borrowings)
    
30,000
          
Less: Unrestricted cash
    
(58,511
)
        
   Subtotal
  
$
2,578,067
      
5.6x
 
 
                
2013 Adjusted EBITDA
  
$
463,219
          
 
                
Annual cash lease expense multiplied by 8
    
2,228,032
          
   Total adjusted debt
  
$
4,806,099
      
6.5x
 
 
                
2013 Adjusted EBITDAR
  
$
741,723
          
 
Debt Structure
 
 
  
   
Weighted
  
 
  
Balance
    
rate (2)
  
Fixed rate debt (1)
  
$
1,356,224
      
4.82
%
Variable rate debt (1)
    
950,530
      
2.74
%
Capital leases
    
299,824
      
8.14
%
Line of credit (cash borrowings)
    
30,000
      
3.75
%
   Total debt
  
$
2,636,578
          
 
                
 
  
Balance
    
% of total
  
Variable rate debt with interest rate swaps (1) (4)
  
$
26,973
      
2.8
%
Variable rate debt with interest rate caps (1) (5)
    
696,570
      
73.3
%
Variable rate debt - unhedged (1)
    
226,987
      
23.9
%
Total variable rate debt (1)
  
$
950,530
      
100.0
%
 
(1) Includes mortgage debt 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 4.69% 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.
 
8
Brookdale Senior Living Inc.
CFFO Reconciliation
As of December 31, 2013
 
CFFO Calculation
($ in 000s)
 
 
  
Three Months Ended December 31,
  
 
  
2013
    
2012
  
 
  
   
 
Net cash provided by operating activities (includes non-refundable entrance fees)
  
$
117,046
    
$
82,991
  
Changes in operating assets and liabilities (eliminates cash flow effect)
    
(27,473
)
    
(14,772
)
Add: Refundable entrance fees received
    
18,875
      
13,088
  
Less: Entrance fee refunds disbursed
    
(10,821
)
    
(7,801
)
Less: Recurring capital expenditures, net
    
(10,786
)
    
(10,168
)
Less: Lease financing debt amortization with fair market value or no purchase options
    
(3,594
)
    
(3,132
)
Less: Distributions from unconsolidated ventures from cumulative share of net earnings
    
(602
)
    
(72
)
Add: CFFO from unconsolidated ventures
    
1,825
      
1,279
  
Cash From Facility Operations
  
$
84,470
    
$
61,413
  
 
                
Add: Integration, transaction-related and EMR roll-out costs
    
4,078
      
7,249
  
Adjusted Cash From Facility Operations
  
$
88,548
    
$
68,662
  
 
Revenue Reconciliation (1)
($ in 000s except average monthly revenue per quarter)
 
FY 2012
FY 2013
 
Q1
Q2
Q3
Q4
Full Year
Q1
Q2
Q3
Q4
Full Year
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
      
4,397
      
4,387
      
4,383
  
Average monthly units (excluding equity homes) available
    
47,858
      
47,935
      
47,998
      
47,935
      
47,959
      
47,956
      
47,929
      
47,953
      
48,548
      
48,097
  
Average occupancy for the quarter
    
87.8
%
    
87.7
%
    
88.0
%
    
88.7
%
    
88.0
%
    
88.5
%
    
88.3
%
    
89.0
%
    
89.0
%
    
88.7
%
Senior Housing resident fee revenue
  
$
536,629
    
$
538,018
    
$
542,215
    
$
546,195
    
$
2,163,057
    
$
557,039
    
$
555,213
    
$
562,969
    
$
568,653
    
$
2,243,874
  
 
                                                                                
Add:  Brookdale Ancillary Services segment revenue
    
53,854
      
57,722
      
56,856
      
56,085
      
224,517
      
60,198
      
58,693
      
61,162
      
62,097
      
242,150
  
Add:  management fee revenue
    
7,444
      
7,499
      
7,407
      
8,436
      
30,786
      
7,609
      
7,744
      
7,622
      
8,150
      
31,125
  
Total revenues excluding entrance fee amortization
  
$
597,927
    
$
603,239
    
$
606,478
    
$
610,716
    
$
2,418,360
    
$
624,846
    
$
621,650
    
$
631,753
    
$
638,900
    
$
2,517,149
  
 
                                                                                
 
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
    
$
638,766
    
$
646,731
    
$
2,546,158
  
Less: Entrance fee amortization
    
(6,066
)
    
(6,310
)
    
(6,459
)
    
(6,527
)
    
(25,362
)
    
(7,133
)
    
(7,032
)
    
(7,013
)
    
(7,831
)
    
(29,009
)
Adjusted revenues
    
597,927
      
603,239
      
606,478
      
610,716
      
2,418,360
      
624,846
      
621,650
      
631,753
      
638,900
      
2,517,149
  
 
                                                                                
Less: Facility operating expenses
    
(398,769
)
    
(403,515
)
    
(411,467
)
    
(417,168
)
    
(1,630,919
)
    
(413,003
)
    
(416,027
)
    
(420,579
)
    
(422,336
)
    
(1,671,945
)
Add:  Change in future service obligation
    
-
      
-
      
-
      
2,188
      
2,188
      
-
      
-
      
-
      
(1,917
)
    
(1,917
)
Adjusted facility operating expenses
    
(398,769
)
    
(403,515
)
    
(411,467
)
    
(414,980
)
    
(1,628,731
)
    
(413,003
)
    
(416,027
)
    
(420,579
)
    
(424,253
)
    
(1,673,862
)
 
                                                                                
Less: G&A including non-cash stock-based compensation expense
    
(44,973
)
    
(46,071
)
    
(43,158
)
    
(44,627
)
    
(178,829
)
    
(46,611
)
    
(46,035
)
    
(45,824
)
    
(46,078
)
    
(184,548
)
Add:  G&A non-cash stock-based compensation expense
    
6,435
      
6,729
      
6,021
      
6,335
      
25,520
      
6,894
      
6,988
      
6,894
      
5,202
      
25,978
  
Net G&A
    
(38,538
)
    
(39,342
)
    
(37,137
)
    
(38,292
)
    
(153,309
)
    
(39,717
)
    
(39,047
)
    
(38,930
)
    
(40,876
)
    
(158,570
)
 
                                                                                
Less: Facility lease expense
    
(71,445
)
    
(70,628
)
    
(71,167
)
    
(70,785
)
    
(284,025
)
    
(69,019
)
    
(68,777
)
    
(69,232
)
    
(69,701
)
    
(276,729
)
Add:  Straight-line lease expense
    
1,642
      
1,564
      
2,118
      
1,344
      
6,668
      
748
      
684
      
818
      
347
      
2,597
  
Less: Amortization of deferred gain
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
Net lease expense
    
(70,896
)
    
(70,157
)
    
(70,142
)
    
(70,534
)
    
(281,729
)
    
(69,364
)
    
(69,186
)
    
(69,507
)
    
(70,447
)
    
(278,504
)
 
                                                                                
Add:  Entrance fee receipts
    
14,989
      
19,694
      
25,132
      
22,890
      
82,705
      
16,873
      
23,878
      
19,098
      
32,482
      
92,331
  
Less: Entrance fee disbursements
    
(8,102
)
    
(5,429
)
    
(6,024
)
    
(7,801
)
    
(27,356
)
    
(9,320
)
    
(7,456
)
    
(7,728
)
    
(10,821
)
    
(35,325
)
Net entrance fees
    
6,887
      
14,265
      
19,108
      
15,089
      
55,349
      
7,553
      
16,422
      
11,370
      
21,661
      
57,006
  
 
                                                                                
Adjusted EBITDA
    
96,611
      
104,490
      
106,840
      
101,999
      
409,940
      
110,315
      
113,812
      
114,107
      
124,985
      
463,219
  
 
                                                                                
Less: Recurring capital expenditures, net
    
(8,064
)
    
(8,599
)
    
(11,475
)
    
(10,168
)
    
(38,306
)
    
(9,324
)
    
(10,664
)
    
(12,127
)
    
(10,786
)
    
(42,901
)
Less: Interest expense, net
    
(31,198
)
    
(31,739
)
    
(31,586
)
    
(29,803
)
    
(124,326
)
    
(30,668
)
    
(29,591
)
    
(29,170
)
    
(30,557
)
    
(119,986
)
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
)
    
(3,518
)
    
(3,594
)
    
(13,927
)
Add:  CFFO from unconsolidated ventures
    
1,228
      
1,310
      
1,559
      
1,279
      
5,376
      
1,958
      
2,099
      
1,922
      
1,825
      
7,804
  
Less: Other
    
(1,062
)
    
(990
)
    
(792
)
    
1,238
      
(1,606
)
    
(1,068
)
    
(1,060
)
    
(655
)
    
2,597
      
(186
)
 
                                                                                
Reported CFFO
  
$
54,586
    
$
61,479
    
$
61,480
    
$
61,413
    
$
238,958
    
$
67,842
    
$
71,152
    
$
70,559
    
$
84,470
    
$
294,023
  
 
                                                                                
Add:  integration, transaction-related and EMR roll-out costs
    
3,904
      
7,688
      
4,624
      
7,249
      
23,465
      
2,105
      
3,626
      
4,661
      
4,078
      
14,470
  
Adjusted CFFO
  
$
58,490
    
$
69,167
    
$
66,104
    
$
68,662
    
$
262,423
    
$
69,947
    
$
74,778
    
$
75,220
    
$
88,548
    
$
308,493
  
 
                                                                                
 
CFFO Per Share
                                          
 
                                                                                
($ except where indicated)
  
FY 2012
    
FY 2013
  
 
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year(2)
      
Q1
      
Q2
      
Q3
      
Q4
    
Full Year(2)
  
Reported CFFO
  
$
0.45
    
$
0.51
    
$
0.50
    
$
0.50
    
$
1.96
    
$
0.55
    
$
0.58
    
$
0.57
    
$
0.68
    
$
2.38
  
Add:  integration, transaction-related and EMR roll-out costs
    
0.03
      
0.06
      
0.04
      
0.06
      
0.19
      
0.02
      
0.03
      
0.04
      
0.03
      
0.12
  
Adjusted CFFO
  
$
0.48
    
$
0.57
    
$
0.54
    
$
0.56
    
$
2.15
    
$
0.57
    
$
0.61
    
$
0.61
    
$
0.71
    
$
2.50
  
 
                                                                                
Shares used in calculation of CFFO (000's)
    
121,145
      
121,708
      
122,493
      
122,608
              
122,823
      
123,405
      
124,128
      
124,308
          
 
(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 December 31, 2013
 
Cash Basis ($ in 000's except average resale and refund)
 
 
FY 2012
 
FY 2013
 
Q1
Q2
Q3
Q4
 
Q1
Q2
Q3
Q4
# Closings
                  94
                106
                147
                121
 
                  91
                128
                100
                130
# of Refunds
                  92
                  62
                  66
                  79
 
                  87
                  88
                  86
                103
 
 
 
 
 
 
 
 
 
 
Resale Receipts:
 
 
 
 
 
 
 
 
 
    Proceeds from non-refundable entrance fees (1)
             7,000
           10,377
           12,926
             9,802
 
             9,237
           12,124
             9,223
           13,607
    Proceeds from refundable entrance fees (2)
             7,989
             9,317
           12,206
           13,088
 
             7,636
           11,754
             9,875
           18,875
      Total Cash Proceeds
           14,989
           19,694
           25,132
           22,890
 
           16,873
           23,878
           19,098
           32,482
Refunds of entrance fees (3)
            (8,102)
            (5,429)
            (6,024)
            (7,801)
 
            (9,320)
            (7,456)
            (7,728)
          (10,821)
Net Resale Cash Flow
             6,887
           14,265
           19,108
           15,089
 
             7,553
           16,422
           11,370
           21,661
 
 
 
 
 
 
 
 
 
 
MyChoice proceeds included in refundable resale receipts above
             2,363
             3,602
             2,466
             4,881
 
             1,768
             4,041
             3,205
           10,008
 
 
 
 
 
 
 
 
 
 
Average Resale $ (excluding MyChoice proceeds)
         134,319
         151,811
         154,190
         148,835
 
         165,989
         154,977
         158,930
         172,877
Average Refund $ (excluding MyChoice refunds)
          (84,283)
          (77,500)
          (87,273)
          (95,025)
 
          (98,540)
          (80,773)
          (86,372)
          (94,621)
 
Value of Unsold Inventory ($ in 000's except average resale price)
Gross Value @ Average Resale Price of $155,000
 
 
 
 
 
 
 
 
           91,915
Refund Attachments
 
 
 
 
 
 
 
 
          (13,876)
Net Cash Value
 
 
 
 
 
 
 
 
           78,039
 
Income Statement Impact ($ in 000's)
On Brookdale'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
Q3
Q4
Amortization of entrance fees (incl. gains on terminations)
            (6,066)
            (6,310)
            (6,459)
            (6,527)
 
            (7,133)
            (7,032)
            (7,013)
            (7,831)
 
Principles of Entry Fee Accounting
Certain of Brookdale'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.  Brookdale 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) 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 December 31, 2013
($ in 000s)
 
Cash Flow Statements
 
 
  
Q1 2012
     Q2 2012     Q3 2012     Q4 2012    
FY 2012
     Q1 2013     Q2 2013    
Q3 2013
      Q4 2013    
FY 2013
Cash Flows from Operating Activities
                                    
 
Net (loss) income
  
$
(10,544
)
  
$
(19,015
)
  
$
(12,216
)
  
$
(24,692
)
  
$
(66,467
)
  
$
3,558
    
$
(5,200
)
  
$
(967
)
  
$
(975
)
  
$
(3,584
)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
                                                                  
Loss on extinguishment of debt
    
221
      
-
      
-
      
-
      
221
      
-
      
893
      
53
      
319
      
1,265
  
Depreciation and amortization
    
67,817
      
68,147
      
67,419
      
66,979
      
270,362
      
69,228
      
71,602
      
72,744
      
72,237
      
285,811
  
Asset impairment
    
1,083
      
7,246
      
-
      
19,348
      
27,677
      
-
      
2,154
      
504
      
10,233
      
12,891
  
Equity in (earnings) loss of unconsolidated ventures
    
(99
)
    
61
      
249
      
3,277
      
3,488
      
(115
)
    
(445
)
    
(431
)
    
(493
)
    
(1,484
)
Distributions from unconsolidated ventures from cumulative share of net earnings
    
206
      
809
      
420
      
72
      
1,507
      
668
      
773
      
648
      
602
      
2,691
  
Amortization of deferred gain
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
Amortization of entrance fees
    
(6,066
)
    
(6,310
)
    
(6,459
)
    
(6,527
)
    
(25,362
)
    
(7,133
)
    
(7,032
)
    
(7,013
)
    
(7,831
)
    
(29,009
)
Proceeds from deferred entrance fee revenue
    
7,000
      
10,377
      
12,926
      
9,802
      
40,105
      
9,237
      
12,124
      
9,223
      
13,607
      
44,191
  
Deferred income tax benefit
    
(135
)
    
(169
)
    
(131
)
    
(90
)
    
(525
)
    
-
      
-
      
-
      
(183
)
    
(183
)
Change in deferred lease liability
    
1,642
      
1,564
      
2,118
      
1,344
      
6,668
      
748
      
684
      
818
      
347
      
2,597
  
Change in fair value of derivatives and amortization
    
233
      
278
      
(140
)
    
(7
)
    
364
      
(135
)
    
(1,836
)
    
1,377
      
(386
)
    
(980
)
Loss (gain) on sale of assets
    
114
      
58
      
73
      
87
      
332
      
(926
)
    
24
      
26
      
(96
)
    
(972
)
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
      
-
      
-
      
-
      
(1,917
)
    
(1,917
)
Non-cash stock-based compensation
    
6,435
      
6,729
      
6,021
      
6,335
      
25,520
      
6,894
      
6,988
      
6,894
      
5,202
      
25,978
  
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
      
(2,154
)
    
4,033
      
(5,449
)
Prepaid expenses and other assets, net
    
(1,681
)
    
7,622
      
(2,793
)
    
5,539
      
8,687
      
9,140
      
(12,679
)
    
734
      
10,288
      
7,483
  
Accounts payable and accrued expenses
    
(23,705
)
    
14,410
      
17,352
      
(3,203
)
    
4,854
      
(10,871
)
    
12,926
      
18,540
      
13,242
      
33,837
  
Tenant refundable fees and security deposits
    
(442
)
    
(675
)
    
(439
)
    
9
      
(1,547
)
    
(335
)
    
(258
)
    
(235
)
    
36
      
(792
)
Deferred revenue
    
12,168
      
(3,701
)
    
(4,098
)
    
7,750
      
12,119
      
(5,316
)
    
(1,018
)
    
4,579
      
(126
)
    
(1,881
)
Net cash provided by operating activities
    
45,693
      
82,854
      
79,431
      
82,991
      
290,969
      
64,485
      
80,343
      
104,247
      
117,046
      
366,121
  
Cash Flows from Investing Activities
                                          
(Increase) decrease in lease security deposits and lease acquisition deposits, net
    
(2,217
)
    
(4,119
)
    
(431
)
    
(1,232
)
    
(7,999
)
    
(1,952
)
    
(1,066
)
    
972
      
(5
)
    
(2,051
)
Decrease (increase) in cash and escrow deposits — restricted
    
8,442
      
(3,038
)
    
(7,806
)
    
(2,408
)
    
(4,810
)
    
826
      
2,195
      
(537
)
    
8,242
      
10,726
  
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
)
    
(61,231
)
    
(96,005
)
    
(257,527
)
Acquisition of assets, net of related payables and cash received
    
(104,984
)
    
(4,975
)
    
(1,349
)
    
(161,215
)
    
(272,523
)
    
(2
)
    
(4,833
)
    
(2,559
)
    
(27,292
)
    
(34,686
)
(Issuance of) payment on notes receivable, net
    
(439
)
    
-
      
(152
)
    
722
      
131
      
(17
)
    
(47
)
    
159
      
73
      
168
  
Investment in unconsolidated ventures
    
-
      
(571
)
    
-
      
(4,797
)
    
(5,368
)
    
(5,843
)
    
(2,149
)
    
(9,180
)
    
-
      
(17,172
)
Distributions received from unconsolidated ventures
    
100
      
84
      
72
      
94
      
350
      
-
      
-
      
100
      
1,500
      
1,600
  
Proceeds from sale of assets, net
    
-
      
325
      
-
      
8,918
      
9,243
      
440
      
7,114
      
-
      
26,582
      
34,136
  
Other
    
-
      
-
      
487
      
-
      
487
      
-
      
-
      
-
      
-
      
-
  
Net cash used in investing activities
    
(141,392
)
    
(63,068
)
    
(68,945
)
    
(181,929
)
    
(455,334
)
    
(58,162
)
    
(47,463
)
    
(72,276
)
    
(86,905
)
    
(264,806
)
Cash Flows from Financing Activities
                                          
Proceeds from debt
    
175,838
      
17,178
      
591
      
178,684
      
372,291
      
8,955
      
418,667
      
170,230
      
65,082
      
662,934
  
Repayment of debt and capital lease obligations
    
(86,068
)
    
(32,585
)
    
(18,304
)
    
(54,878
)
    
(191,835
)
    
(17,707
)
    
(470,825
)
    
(163,209
)
    
(72,392
)
    
(724,133
)
Proceeds from line of credit
    
130,000
      
75,000
      
75,000
      
95,000
      
375,000
      
105,000
      
85,000
      
130,000
      
105,000
      
425,000
  
Repayment of line of credit
    
(110,000
)
    
(85,000
)
    
(70,000
)
    
(95,000
)
    
(360,000
)
    
(140,000
)
    
(60,000
)
    
(155,000
)
    
(120,000
)
    
(475,000
)
Payment of financing costs, net of related payables
    
(2,378
)
    
(336
)
    
(96
)
    
(2,753
)
    
(5,563
)
    
(2,200
)
    
(5,695
)
    
(3,299
)
    
(382
)
    
(11,576
)
Refundable entrance fees:
                                                                                
   Proceeds from refundable entrance fees
    
7,989
      
9,317
      
12,206
      
13,088
      
42,600
      
7,636
      
11,754
      
9,875
      
18,875
      
48,140
  
   Refunds of entrance fees
    
(8,102
)
    
(5,429
)
    
(6,024
)
    
(7,801
)
    
(27,356
)
    
(9,320
)
    
(7,456
)
    
(7,728
)
    
(10,821
)
    
(35,325
)
Cash portion of loss on extinguishment of debt
    
(118
)
    
-
      
-
      
-
      
(118
)
    
-
      
(453
)
    
(49
)
    
-
      
(502
)
Purchase of derivatives and payment of swap termination
    
(99
)
    
(1,190
)
    
-
      
(619
)
    
(1,908
)
    
-
      
(1,489
)
    
(1,374
)
    
-
      
(2,863
)
Other
    
(86
)
    
(178
)
    
(31
)
    
(47
)
    
(342
)
    
315
      
321
      
327
      
318
      
1,281
  
   Net cash provided by (used in) financing activities
    
106,976
      
(23,223
)
    
(6,658
)
    
125,674
      
202,769
      
(47,321
)
    
(30,176
)
    
(20,227
)
    
(14,320
)
    
(112,044
)
            Net increase (decrease) in cash and cash equivalents
    
11,277
      
(3,437
)
    
3,828
      
26,736
      
38,404
      
(40,998
)
    
2,704
      
11,744
      
15,821
      
(10,729
)
            Cash and cash equivalents at beginning of period
    
30,836
      
42,113
      
38,676
      
42,504
      
30,836
      
69,240
      
28,242
      
30,946
      
42,690
      
69,240
  
            Cash and cash equivalents at end of period
  
$
42,113
    
$
38,676
    
$
42,504
    
$
69,240
    
$
69,240
    
$
28,242
    
$
30,946
    
$
42,690
    
$
58,511
    
$
58,511
  
 
 
 
 
 
11