EX-99.2 3 exhibit99_2.htm SUPPLEMENTAL INFORMATION Unassociated Document
Brookdale Senior Living Inc.
  
Corporate Overview - selected financial information
As of June 30, 2009
  
 

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.  Currently the Company owns and operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 546 communities in 35 states and the ability to serve approximately 52,000 residents.
 
 
Stock Listing
                
Common Stock
                
NYSE: BKD
                
 
 
Community Information
                
 
Ownership Type
  
Number of Facilities
    
Number of Units/Beds
    
Percentage of Q2 2009 Revenues
    
Percentage of Q2 2009 Facility Operating Income
    
Percentage of YTD 2009 Revenues
    
Percentage of YTD 2009 Facility Operating Income
  
Owned
     167       18,534       39.4 %     38.5 %     39.5 %     38.0 %
Leased
     358       29,001       60.3 %     60.8 %     60.2 %     61.2 %
Managed
     21       4,309       0.3 %     0.7 %     0.3 %     0.8 %
Total
     546       51,844       100.0 %     100.0 %     100.0 %     100.0 %
                                                 
Operating Type
                                                
Retirement Centers
     85       15,258       27.0 %     31.8 %     27.0 %     31.7 %
Assisted Living
     405       20,807       43.4 %     43.1 %     43.6 %     43.4 %
CCRCs
     35       11,470       29.3 %     24.4 %     29.1 %     24.1 %
Managed
     21       4,309       0.3 %     0.7 %     0.3 %     0.8 %
Total
     546       51,844       100.0 %     100.0 %     100.0 %     100.0 %
 
 
CFFO Per Share ($)
                
 
($ except where indicated)
  
FY 2008
    
FY 2009
  
      Q1       Q2       Q3       Q4    
Full Year
       Q1       Q2  
Reported CFFO
   $ 0.38     $ 0.36     $ 0.22     $ 0.32     $ 1.28     $ 0.49     $ 0.50  
Add:  hurricane costs
     -       -       0.04       0.01       0.05       -       -  
Add:  non-recurring, integration and system costs
     0.03       0.10       0.04       0.02       0.19       -       -  
Adjusted CFFO
   $ 0.41     $ 0.46     $ 0.30     $ 0.35     $ 1.52     $ 0.49     $ 0.50  
                                                         
Weighted Average Shares
     101,995       101,856       101,398       101,424       101,667       101,738       106,042  
 
 
Investor Relations
        
 
      
 
Ross Roadman
        
SVP, Investor Relations
        
Brookdale Senior Living
        
111 Westwood Place, Suite 200
        
Brentwood, TN 37027
        
Phone (615) 376-2412
        
rroadman@brookdaleliving.com
        
             
Note:  See accompanying second quarter earnings release for non-GAAP financial measure definitions and reconciliations.

 
 
 

Brookdale Senior Living Inc.
Operating Segment Info
As of June 30, 2009
 
 
Selected Segment Operating and Other Data as Reported in the 10Q
 
   
FY 2008
    
FY 2009
  
 
     Q1       Q2       Q3       Q4    
Full Year
       Q1       Q2  
                                                       
Retirement Centers
                                                      
Number of communities (period end)
     87       87       87       85       85       85       85  
Total units/beds
     15,747       15,693       15,710       15,251       15,251       15,258       15,258  
Total units/beds excluding equity homes
     15,652       15,598       15,615       15,156       15,156       15,163       15,163  
Weighted average occupancy
     90.5 %     89.6 %     90.6 %     90.2 %     90.3 %     88.9 %     88.7 %
Average monthly revenue per unit/bed
   $ 3,191     $ 3,225     $ 3,232     $ 3,276     $ 3,229     $ 3,329     $ 3,355  
                                                         
Assisted Living
                                                        
Number of communities (period end)
     409       410       410       409       409       406       405  
Total units/beds
     20,906       21,020       21,059       21,021       21,021       20,808       20,807  
Weighted average occupancy
     89.8 %     88.9 %     90.2 %     90.6 %     89.9 %     89.6 %     89.6 %
Average monthly revenue per unit/bed
   $ 3,740     $ 3,751     $ 3,723     $ 3,737     $ 3,738     $ 3,895     $ 3,887  
                                                         
CCRCs
                                                        
Number of communities (period end)
     32       32       32       32       32       35       35  
Total units/beds
     10,798       10,838       10,871       11,183       11,183       11,474       11,470  
Total units/beds excluding equity homes
     9,998       10,038       10,076       10,392       10,392       10,679       10,675  
Weighted average occupancy
     89.4 %     88.1 %     87.4 %     87.2 %     87.9 %     86.7 %     86.2 %
Average monthly revenue per unit/bed
   $ 4,699     $ 4,767     $ 4,810     $ 4,864     $ 4,759     $ 5,017     $ 5,128  
 
Consolidated Totals
                                                        
Number of communities (period end)
     528       529       529       526       526       526       525  
Total units/beds
     47,451       47,551       47,640       47,455       47,455       47,540       47,535  
Total units/beds excluding equity homes
     46,556       46,656       46,750       46,569       46,569       46,650       46,645  
Weighted average occupancy
     90.0 %     88.9 %     89.7 %     89.7 %     89.6 %     88.7 %     88.5 %
Average monthly revenue per unit/bed
   $ 3,759     $ 3,791     $ 3,786     $ 3,830     $ 3,791     $ 3,961     $ 3,990  
 
Management Services
                                                        
Number of communities (period end)
     22       21       21       22       22       22       21  
Total units/beds
     4,406       4,296       4,293       4,349       4,349       4,348       4,309  
Weighted average occupancy
     83.4 %     83.7 %     85.3 %     87.4 %     84.9 %     86.3 %     84.6 %

 
Average Occupancy and Rates based on Average Occupied Units in the Period
The table below represents occupancy based on a consistent treatment of units across all product lines.  The table above is a combination of both units and beds.
 
   
FY 2008
    
FY 2009
  
      Q1       Q2       Q3       Q4    
Full Year
       Q1       Q2  
                                                       
Retirement Centers
                                                      
Number of communities (period end)
     87       87       87       85       85       85       85  
Total average units
     15,623       15,569       15,586       15,127       15,127       15,139       15,139  
Weighted average unit occupancy
     89.3 %     88.4 %     88.9 %     89.0 %     88.9 %     87.5 %     87.0 %
Average monthly revenue per unit
   $ 3,241     $ 3,274     $ 3,302     $ 3,328     $ 3,286     $ 3,387     $ 3,426  
                                                         
Assisted Living
                                                        
Number of communities (period end)
     409       410       410       409       409       406       405  
Total average units
     19,164       19,169       19,298       19,277       19,277       19,064       19,051  
Weighted average unit occupancy
     86.5 %     85.6 %     86.6 %     87.2 %     86.5 %     86.1 %     86.0 %
Average monthly revenue per unit
   $ 4,235     $ 4,251     $ 4,228     $ 4,234     $ 4,237     $ 4,427     $ 4,426  
                                                         
CCRCs
                                                        
Number of communities (period end)
     32       32       32       32       32       35       35  
Total average units
     9,998       10,038       10,076       10,392       10,392       10,679       10,675  
Weighted average unit occupancy
     89.4 %     87.9 %     87.1 %     86.8 %     87.8 %     86.5 %     85.7 %
Average monthly revenue per unit
   $ 4,701     $ 4,779     $ 4,829     $ 4,887     $ 4,799     $ 5,030     $ 5,155  
 
Consolidated Totals
                                                        
Number of communities (period end)
     528       529       529       526       526       526       525  
Total average units
     44,785       44,776       44,960       44,796       44,796       44,882       44,865  
Weighted average unit occupancy
     88.1 %     87.1 %     87.5 %     87.7 %     87.6 %     86.6 %     86.2 %
Average monthly revenue per unit
   $ 3,989     $ 4,026     $ 4,036     $ 4,073     $ 4,031     $ 4,215     $ 4,258  
 
 
 
 
 


Brookdale Senior Living Inc.
    
Same Community, Capital Expenditure and ISC Information
    
As of June 30, 2009
    

 
Same Community Information
($ in 000s, except Avg. Mo. Revenue/unit)
 
   
Three Months Ended June 30,
    
Twelve Months Ended June 30,
  
   
2009
    
2008
    
% Change
    
2009(1)
    
2008(2)
    
% Change
  
Revenue
   $ 473,600     $ 451,736       4.8 %   $ 1,863,235     $ 1,789,578       4.1 %
Operating Expense
     299,368       292,231       2.4 %     1,213,629       1,158,112       4.8 %
Facility Operating Income
   $ 174,232     $ 159,505       9.2 %   $ 649,606     $ 631,466       2.9 %
Facility Operating Margin
     36.8 %     35.3 %     1.5 %     34.9 %     35.3 %     -0.4 %
                                                 
# Communities
     518       518               517       517          
Avg. Period Occupancy
     88.7 %     89.0 %     -0.3 %     89.4 %     90.3 %     -0.9 %
Avg. Mo. Revenue/unit
   $ 3,966     $ 3,767       5.3 %   $ 3,870     $ 3,679       5.2 %
 
Excluding the $7.0 million of charges relating to integration-related accounting items in the fourth quarter of 2007, the same community data is as follows:

 
   
Three Months Ended June 30,
    
Twelve Months Ended June 30,
  
   
2009
    
2008
    
% Change
    
2009(1)
    
2008
    
% Change
  
Revenue
   $ 473,600     $ 451,736       4.8 %   $ 1,863,235     $ 1,789,578       4.1 %
Operating Expense
     299,368       292,231       2.4 %     1,213,629       1,151,067       5.4 %
Facility Operating Income
   $ 174,232     $ 159,505       9.2 %   $ 649,606     $ 638,511       1.7 %
Facility Operating Margin
     36.8 %     35.3 %     1.5 %     34.9 %     35.7 %     -0.8 %
 
(1)  Excludes $1.2 million of expenses related to hurricane and named-tropical storms for the twelve months ended June 30, 2009.
 
            
(2)  Includes $7.0 million of charges to facility operating expenses in the quarter ended December 31, 2007 which related to the Company's desire to conform its policies across all of its platforms including $5.9 million of estimated uncollectible accounts and $1.1 million of accounting conformity adjustments pertaining to expensing inventory and certain accrual policies.
 
 
Schedule of Capital Expenditures
($ in 000s)
 
   
Three Months Ended June 30,
  
   
2009
    
2008
  
Type
            
Recurring
   $ 4,559     $ 7,495  
Reimbursements
     (671 )     (881 )
Net Recurring
     3,888       6,614  
Corporate (1)
     (598 )     3,425  
EBITDA-enhancing (2)
     2,664       11,089  
                 
Development (3)
     22,818       19,446  
Reimbursements (4)
     (25,756 )     (5,208 )
Net Development
     (2,938 )     14,238  
Net Total Capital Expenditures
   $ 3,016     $ 35,366  

(1)  Corporate primarily includes capital expenditures for information technology systems and equipment
        
(2)  EBITDA-enhancing capital expenditures generally represent unusual or non-recurring capital items and/or major renovations
    
(3)  Development capital expenditures primarily relate to the facilty expansion and de novo development program
        
(4)  Development reimbursements are typically received after expenditures are actually made.  Only includes cash reimbursements received during the period
 
 
Information on Ancillary Services
      
 
   
Three Months Ended June 30,
  
   
2009
    
2008
  
Brookdale Units Served:
            
Therapy
            
Legacy ARC
     12,588       12,536  
Total
     35,397       30,492  
                 
Home Health
                
Legacy ARC
     8,803       4,637  
Total
     17,126       7,227  
                 
Avg. Mo. NOI/Occupied Unit
                
Legacy ARC
   $ 278     $ 198  
Total
   $ 200     $ 138  
 
 
 
 
 
 
 
Brookdale Senior Living Inc.
  
Capital Structure - selected financial information
As of June 30, 2009
      
($ in 000s)
        

 
Debt Maturities and Scheduled Principal Repayments
            
 
   
Initial Maturities
  
   
Mortgage
    
weighted
    
Line of
  
weighted
  
Mort. Debt
    
weighted
    
Capital
    
weighted
    
Total
  
   
Debt (1)
    
rate (2)
    
Credit
  
rate (2)
  
& Line
    
rate (2)
    
Leases
    
rate (2)
    
Debt
  
                                                   
2009
     2,212       7.14 %     -  
 
     2,212       7.14 %     8,891       8.31 %     11,103  
2010
     137,195       2.35 %     -         137,195       2.35 %     20,669       8.34 %     157,864  
2011
     323,458       6.76 %     -         323,458       6.76 %     23,624       8.35 %     347,082  
2012
     880,052       3.52 %     -         880,052       3.52 %     24,479       8.41 %     904,531  
2013
     505,741       4.93 %     -         505,741       4.93 %     25,596       8.46 %     531,337  
Thereafter
     270,530       4.66 %     -         270,530       4.66 %     224,593       9.00 %     495,123  
Total
     2,119,188       4.42 %     -         2,119,188       4.42 %     327,852       8.81 %     2,447,040  
 

   
Final Maturities (3)
  
   
Mortgage
    
weighted
    
Line of
  
weighted
  
Mort. Debt
    
weighted
    
Capital
    
weighted
    
Total
  
   
Debt (1)
    
rate (2)
    
Credit
  
rate (2)
  
& Line
    
rate (2)
    
Leases
    
rate (2)
    
Debt
  
                                                   
2009      2,212       7.14 %     -         2,212       7.14 %     8,891       8.31 %     11,103  
2010      6,195       6.77 %     -         6,195       6.77 %     20,669       8.34 %     26,864  
2011      295,718       4.00 %     -         295,718       4.00 %     23,624       8.35 %     319,342  
2012      878,584       3.52 %     -         878,584       3.52 %     24,479       8.41 %     903,063  
2013      539,131       5.75 %     -         539,131       5.75 %     25,596       8.46 %     564,727  
Thereafter      397,348       4.90 %     -         397,348       4.90 %     224,593       9.00 %     621,941  
Total      2,119,188       4.42 %     -         2,119,188       4.42 %     327,852       8.81 %     2,447,040  


 
Coverage Ratios
                    

 
   
Six months ended June 30, 2009
  
                       Interest/Cash Lease
 
  
   
Units
    
FOI
    
Adj. FOI **
  
Payments
    
Coverage
  
Owned Communities
     18,534       138,144       111,958       51,795       2.2 x
Leased Communities *
     29,001       222,846       182,610       144,542       1.3 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,
     
2008
2009
Scheduled Debt Amortization
    
                          783
                   1,897
Lease Financing Debt Amortization - FMV or no Purchase Option (4)
                       3,287
                   3,578
Lease Financing Debt Amortization - Bargain Purchase Option
                       4,732
                   5,258
Total Debt Amortization
    
                       8,802
                 10,733

Line Availability
                    
 
($000s)
  
Dec-08
    
Mar-09
    
Jun-09
  
                   
                   
Revolver Balance
     159,453       155,000       -  
Letters of Credit Outstanding (7)
     107,261       20,759       23,562  
Ending Line Balance
     266,714       175,759       23,562  
                         
Cash and cash equivalents
     53,973       52,507       95,611  
                         
Total Line Capacity
             220,000       75,000  
Total Liquidity (Line Availability + Cash)
       96,748       147,049  

Leverage Ratios
                  

         
Annualized
  
   
Balance
    
Leverage
  
Mortgage Debt (1)
     2,119,188        
Capital Leases
     327,852        
Total Property-Level Debt
     2,447,040       6.9 x
                 
Plus: Line of Credit (cash borrowings)
     -          
Less: Unrestricted Cash
     (78,122 )        
Less: Unrestricted Investments (8)
     (17,489 )        
Less: Cash held as collateral against existing debt
     (30,003 )        
Total Debt
     2,321,426       6.5 x
                 
2009 YTD annualized Adjusted EBITDA
     355,964          
                 
Annualized Cash Lease Expense multiplied by 8
     2,312,672          
Total Adjusted Debt
     4,634,098       7.2 x
                 
2009 YTD annualized Adjusted EBITDAR
     645,048          


Debt Structure
                  
 
         
weighted
   
Balance
    
rate (2)
Fixed Rate Mortgage Debt (1)
     951,604       6.06 %
Variable Rate Mortgage Debt (1)
     1,167,584       3.09 %
Capital Leases
     327,852       8.81 %
Line of Credit (cash borrowings)
     -          
Total Debt
     2,447,040          
                 
   
Balance
    
% of total
Variable Rate debt with Interest Rate Swaps (5)
     351,840       30.1 %
Variable Rate debt with Interest Rate Caps (1), (6)
     734,621       62.9 %
Variable Rate debt - Unhedged
     81,123       7.0 %
Total Variable Rate Mortgage Debt
     1,167,584       100.0 %
                 
 
(1) Also includes both bond and construction financing.
                  
(2) Pertaining to variable rate debt, reflects a) market rates for stated reporting period and b) applicable swap rates / cap rates for hedged debt.
(3) Assumes extension options are exercised.  These options are mainly at the company's sole discretion.
    
(4) Payments are included in CFFO.
                        
(5) Weighted swap rate for stated reporting period is 3.74%.
                  
(6) Weighted cap rate for stated reporting period of 5.97% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.
(7) December includes $32.2 million of duplicative letters of credit that were returned during the first quarter of 2009.
  
(8) Represents unrestricted cash that is currently used as collateral for letters of credit for pricing purposes.
    
 

 
 
 
 

Brookdale Senior Living Inc.
CFFO Reconciliation
As of June 30, 2009
($ in 000s)

 
CFFO Calculation
                

       
  Three Months Ended June 30,
       
2009
2008
           
Net cash provided by operating activities (includes non-refundable entrance fees)
 $             44,315
 $               36,095
Less: Changes in operating assets and liabilities (eliminates cash flow effect)
16,150
6,546
Add: Refundable entrance fees received
  
4,098
7,420
Less: Entrance fee refunds disbursed
  
(6,357)
(4,843)
Less: Recurring capital expenditures, net
  
(3,888)
(6,614)
Less: Lease financing debt amortization with fair market value or no purchase options
(1,798)
(1,662)
Add: Reimbursement of operating expenses and other
-
(269)
Cash From Facility Operations
  
 $             52,520
 $               36,673
 
 
Revenue Reconciliation
                
 
     
FY 2008
FY 2009
     
Q1
Q2
Q3
Q4
Full Year
  
Q1
Q2
Revenue reconciliation excl. entrance fee amortization
            
Average monthly revenue per quarter
                 3,759
                  3,791
                    3,786
                   3,830
                3,791
  
              3,961
              3,990
Average monthly units (excluding equity homes) available
              46,520
                46,566
                  46,725
                 46,576
              46,603
  
            46,595
            46,654
Average occupancy for the quarter
90.0%
88.9%
89.7%
89.7%
89.6%
  
88.7%
88.5%
Resident fee revenue
 $         472,144
 $          470,808
 $            476,043
 $           480,040
 $     1,899,035
  
 $      491,119
 $      494,227
                     
Add:  management fee revenue
                 1,813
                  2,264
                    1,527
                   1,390
                6,994
  
              1,717
              1,298
Total revenues excluding entrance fee amortization
 $         473,957
 $          473,072
 $            477,570
 $           481,430
 $     1,906,029
  
 $      492,836
 $      495,525
                     
CFFO Reconciliation to the Income Statement
                
                     
Resident fee revenue
 $         480,648
 $          478,201
 $            482,277
 $           486,928
 $     1,928,054
  
 $      497,946
 $      500,757
Less:  Entrance fee amortization
(6,691)
(5,129)
(4,707)
(5,498)
(22,025)
  
(5,110)
(5,232)
 
Adjusted revenues
473,957
473,072
477,570
481,430
1,906,029
  
492,836
495,525
                     
Less:  Facility operating expenses
(305,059)
(306,526)
(326,214)
(323,782)
(1,261,581)
  
(318,112)
(316,586)
                     
Less:  G&A excluding non-cash stock expense
(36,388)
(40,297)
(32,948)
(31,286)
(140,919)
  
(33,707)
(31,721)
Add:  G&A non-cash stock expense
8,010
8,621
6,737
5,569
28,937
  
6,809
6,871
 
Net G&A
(28,378)
(31,676)
(26,211)
(25,717)
(111,982)
  
(26,898)
(24,850)
                     
Less:  Facility lease expense
(67,812)
(67,199)
(67,017)
(67,441)
(269,469)
  
(67,741)
(68,434)
Add:  Straight-line lease expense
5,751
5,215
4,709
4,910
20,585
  
4,248
4,032
Less:  Amortization of deferred gain
(1,085)
(1,086)
(1,086)
(1,085)
(4,342)
  
(1,086)
(1,085)
 
Net lease expense
(63,146)
(63,070)
(63,394)
(63,616)
(253,226)
  
(64,579)
(65,487)
                     
Entrance fee receipts
6,272
12,597
11,526
12,077
42,472
  
8,510
9,816
Entrance fee disbursements
(3,632)
(4,843)
(5,856)
(4,819)
(19,150)
  
(5,836)
(6,357)
 
Net entrance fees
2,640
7,754
5,670
7,258
23,322
  
2,674
3,459
                     
Adjusted EBITDA
80,014
79,554
67,421
75,573
302,562
  
85,921
92,061
                     
Less:  Recurring capital expenditures, net
(6,037)
(6,614)
(6,965)
(7,696)
(27,312)
  
(2,655)
(3,888)
Less:  Interest expense, net
(34,245)
(34,264)
(36,216)
(35,046)
(139,771)
  
(32,001)
(33,122)
Less:  Lease financing debt amortization with fair market value or no purchase options
(1,625)
(1,662)
(1,688)
(1,716)
(6,691)
  
(1,780)
(1,798)
Less:  Other
478
(341)
(96)
1,315
1,356
  
706
(733)
                     
Reported CFFO
 $           38,585
 $             36,673
 $               22,456
 $              32,430
 $        130,144
  
 $         50,191
 $         52,520
                     
Add:  hurricane costs
                        -
                         -
                    3,613
                   1,187
                4,800
  
                     -
                     -
Add:  non-recurring, integration and system costs
                 2,880
                10,447
                    3,902
                   2,282
              19,511
  
                     -
                     -
Adjusted CFFO
 $           41,465
 $             47,120
 $               29,971
 $              35,899
 $        154,455
  
 $         50,191
 $         52,520
                     
CFFO Per Share ($)
                
                     
($ except where indicated)
FY 2008
FY 2009
FY 2009
     
Q1
Q2
Q3
Q4
Full Year
  
Q1
Q2
Reported CFFO
 $                0.38
 $                 0.36
 $                   0.22
 $                  0.32
 $               1.28
  
 $             0.49
 $             0.50
Add:  hurricane costs
                        -
                         -
                       0.04
                      0.01
                   0.05
  
                     -
                     -
Add:  non-recurring, integration and system costs
                   0.03
                     0.10
                       0.04
                      0.02
                   0.19
  
                     -
                     -
Adjusted CFFO
 $                0.41
 $                 0.46
 $                   0.30
 $                  0.35
 $               1.52
  
 $             0.49
 $             0.50
                     
Shares used in calculation of CFFO (000's)
101,995
101,856
101,398
101,424
101,667
  
101,738
106,042

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 condensed consolidated financial statements, included in the accompanying earnings release.
 

 
 
 

 
Brookdale Senior Living Inc.
Quarterly Entry Fee Information
As of June 30, 2009


      Q1 07       Q2 07       Q3 07       Q4 07       Q1 08       Q2 08       Q3 08       Q4 08       Q1 09       Q2 09  
Ending # EF Vacant Units
     372       406       379       429       434       416       448       447       475       474  
# Closings
     51       60       70       60       40       78       67       65       48       62  
# of Refunds
     88       65       75       83       47       69       95       67       69       86  
                                                                                 
Cash Basis ($000's)
                                                                                
Resale Receipts:
                                                                                
    Proceeds from non-refundable entrance fees (1)
     3,916       4,726       5,673       5,015       2,780       5,177       7,253       7,391       4,872       5,718  
    Proceeds from refundable entrance fees (2)
     4,258       4,064       8,696       8,901       3,492       7,420       4,273       4,686       3,638       4,098  
      Total Cash Proceeds
     8,174       8,790       14,369       13,916       6,272       12,597       11,526       12,077       8,510       9,816  
Refunds of entrance fees (3)
     (6,315 )     (4,089 )     (5,084 )     (4,069 )     (3,632 )     (4,843 )     (5,856 )     (4,819 )     (5,836 )     (6,357 )
Net Resale Cash Flow
     1,859       4,701       9,285       9,847       2,640       7,754       5,670       7,258       2,674       3,459  
                                                                                 
Average Resale $ (excluding My Choice proceeds)
     160,275       143,300       153,486       153,033       145,850       151,244       163,134       178,969       165,042       158,065  
Average Refund $
     (71,761 )     (62,908 )     (67,787 )     (49,024 )     (74,723 )     (67,754 )     (61,642 )     (71,925 )     (84,580 )     (69,027 )
                                                                                 
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 My Choice proceeds)
          
(3) From Statement of Cash Flows (Financing Activities section) with line description: Refunds of entrance fees
    
                                                                                 
Value of Unsold Inventory ($ in 000's)
                                                    
Gross Value @ Average Resale Price of $170,000
                                                                             80,580  
Refund Attachments
                                                                             (7,453 )
Net Cash Value
                                                                             73,127  
                                                                                 
Income Statement Impact ($ in 000's)
                                                              
On BKD's income statement, in accordance with GAAP, non-refundable entrance fees are amortized into revenue based on the unamortized balance per contract divided by the actuarial life of the resident.
  
The following are the non-cash amortized non-refundable entrance fees for each quarter:
                                                  
                                                                                 
      Q1 07       Q2 07       Q3 07       Q4 07       Q1 08       Q2 08       Q3 08       Q4 08       Q1 09       Q2 09  
Amortization of entrance fees (incl. gains on terminations)
     (4,259 )     (4,641 )     (5,322 )     (5,019 )     (6,691 )     (5,129 )     (4,707 )     (5,498 )     (5,110 )     (5,232 )


Principles of Entry Fee Accounting
                    
Certain of BKD's communities have residency agreements which require the resident to pay an upfront fee prior to occupying the community and in return for a reduced monthly
service fee and certain healthcare benefits.  BKD has a number of options for residents that give a choice of the amount of refundability of the upfront fee, the amount of entry fee for
the unit and the amount of health care benefit in the community’s various levels of care.  The non-refundable portion of the entrance fee is recorded as deferred revenue and amortized over the estimated stay of the resident based on an actuarial valuation.  The refundable portion of a resident’s entrance fee is generally refundable within a certain time period following contract termination or in certain agreements, upon the resale of a comparable unit or 12 months after the resident vacates the unit and is not amortized.
 
 
 
 
 
 

 
Brookdale Senior Living Inc.
            
Quarterly Entry Fee Information
            
As of June 30, 2009
            
             
American Retirement Corporation ("ARC"), acquired in 2006, was active in the entrance fee CCRC business for many years and operated seven such communities.  Prior to the ARC acquisition, BKD acquired three entrance fee CCRC's from a non-profit, the National Benevolent Association, which were in bankruptcy.  BKD has been repositioning those
communities by upgrading/renovating, expanding the campus or levels of care offered and changing the form of contract to include such items as life care and health benefits.
             


Quarterly Entrance Fee Amortization
                                    
($ in 000's)
                                    
 
     Q1 08       Q2 08       Q3 08       Q4 08       Q1 09       Q2 09  
Original ARC Communities
                                                
                                                 
Occupancy
     91 %     89 %     88 %     89 %     88 %     87 %
Ending # EF Vacant Units
     181       222       249       243       271       259  
# EF Closings
     29       46       52       48       29       33  
# of EF Refunds
     27       44       58       45       41       70  
                                                 
EF Resale Receipts
     4,906       8,729       9,699       8,739       5,344       5,579  
EF Refunds Paid
     (1,823 )     (2,795 )     (4,320 )     (3,644 )     (3,855 )     (5,190 )
Net Resale Cash Flow
     3,083       5,934       5,379       5,095       1,489       389  
                                                 
Average EF Resale $ (excluding My Choice proceeds)
   $ 154     $ 177     $ 175     $ 175     $ 166     $ 169  
Average EF Refund $ (excluding My Choice refunds)
   $ (63 )   $ (62 )   $ (74 )   $ (81 )   $ (94 )   $ (71 )
                                                 
Total NBA Communities
                                                
                                                 
Occupancy
     76 %     75 %     75 %     76 %     76 %     76 %
Ending # EF Vacant Units
     207       194       199       204       204       215  
# EF Closings
     11       32       15       17       19       29  
# of EF Refunds (1)
     20       25       37       22       28       16  
                                                 
EF Resale Receipts
     1,366       3,868       1,827       3,338       3,166       4,237  
EF Refunds Paid (1)
     (1,809 )     (2,048 )     (1,536 )     (1,175 )     (1,981 )     (1,167 )
Net Resale Cash Flow
     (443 )     1,820       291       2,163       1,185       3,070  
                                                 
Average EF Resale $ (excluding My Choice proceeds)
   $ 124     $ 114     $ 122     $ 189     $ 163     $ 146  
Average EF Refund $ (excluding My Choice refunds)
   $ (90 )   $ (77 )   $ (42 )   $ (53 )   $ (71 )   $ (86 )
                                                 
Total Consolidated EF Communities
                                                
                                                 
Occupancy
     87 %     86 %     85 %     85 %     85 %     84 %
Ending # EF Vacant Units
     388       416       448       447       475       474  
# EF Closings
     40       78       67       65       48       62  
# of EF Refunds
     47       69       95       67       69       86  
                                                 
EF Resale Receipts
     6,272       12,597       11,526       12,077       8,510       9,816  
EF Refunds Paid
     (3,632 )     (4,843 )     (5,856 )     (4,819 )     (5,836 )     (6,357 )
Net Resale Cash Flow
     2,640       7,754       5,670       7,258       2,674       3,459  
                                                 
Average EF Resale $ (excluding My Choice proceeds)
   $ 146     $ 151     $ 163     $ 179     $ 165     $ 158  
Average EF Refund $ (excluding My Choice refunds)
   $ (75 )   $ (68 )   $ (62 )   $ (72 )   $ (85 )   $ (69 )
                                                 
(1) Includes certain refunds accelerated for repositioning of the community
                          
                                                 

 
 
 


Brookdale Senior Living Inc.
              
Quarterly Cash Flow Statements
              
As of June 30, 2009
              
($ in 000s)
              
               
Cash Flow Statements
              
 
      Q1 2008       Q2 2008       Q3 2008       Q4 2008    
Full Year
       Q1 2009       Q2 2009    
YTD 2009
  
Cash Flows from Operating Activities
                                                            
Net loss
   $ (55,093 )   $ (3,485 )   $ (35,877 )   $ (278,786 )   $ (373,241 )   $ (13,636 )   $ (10,530 )   $ (24,166 )
Adjustments to reconcile net loss to net cash provided by operating activities:  
 
 
               -                          
Non-cash portion of loss on extinguishment of debt
     2,821       231       -       -       3,052       -       1,740       1,740  
Depreciation and amortization
     73,497       71,255       70,070       71,087       285,909       69,675       70,652       140,327  
Goodwill and asset impairment
     -       -       -       220,026       220,026       -       -       -  
Gain on sale of assets
     -       -       -       (2,131 )     (2,131 )     (4,455 )     103       (4,352 )
Equity in (earnings) loss of unconsolidated ventures
     173       935       (358 )     111       861       (595 )     (581 )     (1,176 )
Distributions received from JVs
     190       1,182       546       1,834       3,752       11       -       11  
Amortization of deferred gain
     (1,085 )     (1,086 )     (1,086 )     (1,085 )     (4,342 )     (1,086 )     (1,085 )     (2,171 )
Amortization of entrance fees
     (6,691 )     (5,129 )     (4,707 )     (5,498 )     (22,025 )     (5,110 )     (5,232 )     (10,342 )
Proceeds from deferred entrance fee revenue
     2,780       5,177       7,253       7,391       22,601       4,872       5,718       10,590  
Deferred income tax benefit
     (30,662 )     (3,532 )     (23,049 )     (32,255 )     (89,498 )     (8,194 )     (3,323 )     (11,517 )
Change in deferred lease liability
     5,751       5,215       4,709       4,910       20,585       4,248       4,032       8,280  
Change in fair value of derivatives and amortization
     45,633       (36,743 )     8,454       50,802       68,146       4,285       (7,900 )     (3,615 )
Non-cash stock-based compensation
     8,010       8,621       6,737       5,569       28,937       6,809       6,871       13,680  
Changes in operating assets and liabilities:
                                                                
Accounts receivable, net
     (6,392 )     (2,067 )     (9,706 )     (6,985 )     (25,150 )     (3,118 )     79       (3,039 )
Prepaid expenses and other assets, net
     2,515       12,164       (9,037 )     (18,306 )     (12,664 )     (4,602 )     (4,623 )     (9,225 )
Accounts payable and accrued expenses
     (5,083 )     (11,080 )     19,214       12,377       15,428       4,966       6,847       11,813  
Deferred revenue
     3,081       (5,747 )     (726 )     1,206       (2,186 )     15,057       (6,747 )     8,310  
Tenant refundable fees and security deposits
     1,184       184       (1,807 )     (854 )     (1,293 )     (370 )     (11,706 )     (12,076 )
Net cash provided by operating activities
     40,629       36,095       30,630       29,413       136,767       68,757       44,315       113,072  
Cash Flows from Investing Activities
                                                                
Decrease in lease security deposits and lease acquisition deposits, net
     1,763       109       544       1,065       3,481       1,480       -       1,480  
(Increase) decrease in cash and escrow deposits — restricted
     (20,663 )     16,830       (3,962 )     (13,965 )     (21,760 )     (57,897 )     4,030       (53,867 )
Additions to property, plant, and equipment and leasehold intangibles,net of related payables
     (46,213 )     (41,455 )     (46,511 )     (54,849 )     (189,028 )     (33,491 )     (29,443 )     (62,934 )
Acquisition of assets, net of related payables and cash received
     (745 )     (462 )     (3,898 )     (1,626 )     (6,731 )     -       (190 )     (190 )
Payment on (issuance of) notes receivable, net
     10,112       29,549       -       (299 )     39,362       (36 )     (759 )     (795 )
Investment in unconsolidated ventures
     (356 )     (137 )     (670 )     (1,616 )     (2,779 )     (1,106 )             (1,106 )
Distributions received from unconsolidated ventures
     -       154       146       3,616       3,916       525       265       790  
Proceeds from sale of business
     -       -       -       2,935       2,935       9,166       210       9,376  
Proceeds from sale of unconsolidated venture
     -       -       4,165       -       4,165       8,843       (12 )     8,831  
Net cash (used in) provided by investing activities
     (56,102 )     4,588       (50,186 )     (64,739 )     (166,439 )     (72,516 )     (25,899 )     (98,415 )
Cash Flows from Financing Activities
                                                                
Proceeds from debt
     288,479       155,868       23,422       43,575       511,344       26,521       23,998       50,519  
Repayment of debt and capital lease obligations
     (181,327 )     (42,865 )     (5,018 )     (26,279 )     (255,489 )     (10,403 )     (5,330 )     (15,733 )
Proceeds from line of credit
     125,000       45,000       94,757       74,696       339,453       60,446       -       60,446  
Repayment of line of credit
     (120,000 )     (198,000 )     (60,000 )     -       (378,000 )     (64,899 )     (155,000 )     (219,899 )
Payment of dividends
     (51,897 )     (25,955 )     (25,844 )     (25,759 )     (129,455 )     -       -       -  
Purchase of treasury stock
     -       (20,020 )     (9,167 )     -       (29,187 )     -       -       -  
Payment of financing costs, net of related payables
     (853 )     (12,571 )     (296 )     (572 )     (14,292 )     (6,895 )     (432 )     (7,327 )
Other
     (403 )     (400 )     (1,075 )     (1,096 )     (2,974 )     (279 )     (197 )     (476 )
Refundable entrance fees:
                                     -                          
Proceeds from refundable entrance fees
     3,492       7,420       4,273       4,686       19,871       3,638       4,098       7,736  
Refunds of entrance fees
     (3,632 )     (4,843 )     (5,856 )     (4,819 )     (19,150 )     (5,836 )     (6,357 )     (12,193 )
Recouponing and payment of swap termination
     (23,942 )     (3,180 )     -       (31,018 )     (58,140 )     -       -       -  
Proceeds from public equity offering, net
     -       -       -       -       -       -       163,908       163,908  
Cash portion of loss on extinguishment of debt
     (812 )     (231 )     (197 )     -       (1,240 )     -       -       -  
Net cash (used in) provided by financing activities
     34,105       (99,777 )     14,999       33,414       (17,259 )     2,293       24,688       26,981  
Net increase (decrease) in cash and cash equivalents
     18,632       (59,094 )     (4,557 )     (1,912 )     (46,931 )     (1,466 )     43,104       41,638  
Cash and cash equivalents at beginning of period
     100,904       119,536       60,442       55,885       100,904       53,973       52,507       53,973  
Cash and cash equivalents at end of period
   $ 119,536     $ 60,442     $ 55,885     $ 53,973     $ 53,973     $ 52,507     $ 95,611     $ 95,611