Brookdale Senior Living Inc. · NYSE:BKD
Brookdale Senior Living — Q4 2017 Earnings Presentation
34 slides from Brookdale Senior Living's earnings presentation, Feb 22, 2018
Slide 1: Supplemental Information 4th Quarter 2017
Exhibit 99.2 Supplemental Information 4th Quarter 2017
Slide 2: Table of Contents
2 Financial Overview 3 Segment Overview 7 Senior Housing 8 Ancillary Services 13 G&A Expense & Transaction Costs 14 Capital Expenditures 15 Cash Lease Payments 16 Unconsolidated Ventures 17 Debt & Liquidity 18 Net Asset Value Elements 20 Definitions 21 Appendix: Consolidated Statements of Cash Flows
Slide 3: Financial Overview
3 (1) Brookdale’s weighted average unit ownership percentage is 23.5%. Important Note Regarding Non-GAAP Financial Measures. Adjusted EBITDA, Adjusted Free Cash Flow, Brookdale's Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures and Brookdale’s Proportionate Share of Adjusted Free Ca
Slide 4: Segment Overview
4 Segment Overview (1) Senior Housing Segments Re venue (2 ) Segme nt O pe ra ting In come (3 ) (1) Brookdale’s five segments are Retirement Centers, Assisted Living, CCRCs-Rental (which combined are referred to as Senior Housing), Brookdale Ancillary Services and Management Services. (2) Percentage
Slide 5: Consolidated Financial Overview
5 (1) Includes hurricane and natural disaster expense of $5.3 million and $1.9 million in Q3 2017 and Q4 2017, respectively. (2) Primarily consists of proceeds from property insurance, cash paid for debt modification and extinguishment costs and cash paid for state income taxes. (All amounts in 000s
Slide 6: Segment Overview Q4 2017
6 (1) Other is primarily comprised of corporate capital expenditures, unallocated G&A expense (primarily strategic project costs), non-cash stock-based compensation, transaction costs, and debt modification costs. ($ in 000s) Q4 2017 Total Senior Housing Owned Portfolio Senior Housing Leased Portfol
Slide 7: Senior Housing Overview
7(1) Excludes reimbursed costs on behalf of managed communities of $178,530, $183,945, $229,960, $236,958, and $240,268 (in thousands), respectively. ($ in 000s, except RevPAR and RevPOR) 2016 2017 YoY Q4 Q1 Q2 Q3 Q4 Q4 Total Senior Housing, Brookdale Ancillary and Management Services(1) Revenue $ 1
Slide 8: Senior Housing Segment Detail
8 Retirement Centers Revenue $ 169,381 $ 172,620 $ 162,248 $ 161,986 $ 157,342 (7.1)% Segment Operating Income $ 72,215 $ 74,002 $ 67,297 $ 65,907 $ 64,211 (11.1)% Segment Operating Margin 42.6% 42.9% 41.5% 40.7% 40.8% -180 bps Number of communities (period end) 93 86 86 85 84 Period end number of u
Slide 9: Senior Housing Same Community
9 Revenue $ 750,187 $ 770,151 $ 759,151 $ 754,903 $ 754,272 0.5 % Community Labor Expense (309,553) (312,633) (319,566) (324,268) (328,079) Other facility operating expense (170,093) (166,905) (172,963) (175,620) (173,520) Facility operating expense (1) (479,646) (479,538) (492,529) (499,888) (501,5
Slide 10: Senior Housing Owned Portfolio
10 Resident fee revenue $ 383,588 $ 388,310 $ 381,418 $ 376,896 $ 377,586 Less: Facility operating expense (259,430) (252,673) (257,991) (261,069) (260,799) Owned Portfolio Operating Income 124,158 135,637 123,427 115,827 116,787 (5.9)% Less: G&A Portfolio Allocation (see page 14) (16,163) (16,808)
Slide 11: Senior Housing Leased Portfolio
11 Resident fee revenue $ 512,444 $ 516,645 $ 442,462 $ 435,392 $ 415,169 Less: Facility operating expense (328,993) (325,526) (287,327) (288,804) (273,052) Leased Portfolio Operating Income 183,451 191,119 155,135 146,588 142,117 (22.5 )% Less: G&A Portfolio Allocation (see page 14) (21,592) (22,36
Slide 12: Brookdale's Largest 20 Markets - Competitive Summary
12 (1) Data reflected is for the consolidated senior housing portfolio only. (2) NIC MAP Supply Set, Q4 2017 "New Construction" properties with projected open dates through Q4 2018. (3) Saturation is equal to units per population Age 75+ with income 50k+. (4) Percentage changes are based on data fro
Slide 13: Ancillary Services
13 Resident fee revenue Home Health $ 91,199 $ 92,241 $ 88,561 $ 87,315 $ 89,272 Hospice 12,531 13,346 15,441 17,328 18,248 Outpatient Therapy 9,320 6,375 6,179 5,941 5,937 Other ancillary services 992 10 9 20 39 Segment resident fee revenue 114,042 111,972 110,190 110,604 113,496 (0.5)% Segment Ope
Slide 14: G&A Expense & Transaction Costs
14 (1) G&A allocations are calculated using a methodology which the Company believes best matches the type of general and administrative cost with the community, segment, or portfolio. Some of the allocations are based on direct utilization and some are based on formulas such as unit proportion. G&A
Slide 15: Capital Expenditures
15 Community level capital expenditures, including allocations Senior Housing Owned Portfolio $ 18,668 $ 13,909 $ 16,733 $ 17,695 $ 29,356 Senior Housing Leased Portfolio 16,585 14,801 14,205 15,397 29,119 Ancillary Services 51 22 35 277 3 Community level capital expenditures, net 35,304 28,732 30,9
Slide 16: Cash Lease Payments
16(1) Includes cash lease payments of $3,566, $3,514, $3,491, $3,466 and $3,368 (in thousands), respectively, for leases of corporate offices and information technology systems and equipment. Operating Leases Facility lease expense $ 91,745 $ 88,807 $ 84,690 $ 84,437 $ 81,787 Less: Straight-line (in
Slide 17: Unconsolidated Ventures
17 ($ in 000s) Q4 2017 Year Ended December 31, 2017 Total CCRC Venture Other Ventures Total Resident fee revenue $ 343,383 $ 103,784 $ 239,599 $ 1,354,444 Less: Facility operating expenses (241,729) (79,473) (162,256) (946,477) Less: G&A expenses including management fees (17,340) (5,453) (11,887) (
Slide 18: Debt & Liquidity
18 $2,536,474 $1,334,263 (1) Includes the carrying value of mortgage debt, convertible notes, line of credit and other notes payable, but excludes capital and financing lease obligations. (2) Pertaining to variable rate debt, reflects a) market rates as of December 31, 2017 and b) applicable cap rat
Slide 19: Debt Maturity Schedule and Leverage
19 Debt Maturity Schedule(1) ($ in 000s) Debt $1,400,000 $700,000 $0 2018 2019 2020 2021 2022 Thereafter $495,413 $326,038 $485,977 $336,096 $341,095 $1,886,118 (1) Includes carrying value of $309.9 million of convertible notes. (2) Includes mortgage debt, convertible notes and other notes payable,
Slide 20: Net Asset Value Elements
20 (1) Includes results of operations of communities disposed through sale or lease termination through the disposal date. (2) See page 14. G&A allocations presented on this page exclude non-cash stock-based compensation expense of $27,832 and transaction and strategic project costs of $25,386 for t
Slide 21: Definitions
21 Adjusted EBITDA is a non-GAAP financial measure that the Company defines as net income (loss) before provision (benefit) for income taxes; non-operating (income) expense items; depreciation and amortization (including non-cash impairment charges); (gain) loss on sale or acquisition of communities
Slide 22: Definitions (Continued)
22 Leased Portfolio Operating Income is defined by the Company as resident fee revenues (excluding Brookdale Ancillary Services segment revenue), less facility operating expenses for the Company’s Senior Housing Leased Portfolio. Leased Portfolio Operating Income does not include general and adminis
Slide 23: Appendix
23 Brookdale West Hartford West Hartford, CT Consolidated Statements of Cash Flows 24 Non-GAAP Financial Measures 25 Appendix
Slide 24: Consolidated Statements of Cash Flows
24 Cash Flows from Operating Activities Net income (loss) $ (268,600) $ (126,361) $ (46,337) $ (413,929) $ 15,021 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Loss on extinguishment of debt, net 876 54 42 573 45 Depreciation and amortization, net 131,510 1
Slide 25: Non-GAAP Financial Measures
25 This Supplemental Information contains financial measures utilized by management to evaluate the Company’s operating performance and liquidity that are not calculated in accordance with GAAP, including Adjusted EBITDA; the Company's Proportionate Share of Adjusted EBITDA of Unconsolidated Venture
Slide 26: Adjusted EBITDA Reconciliation
26 Net income (loss) $ (268,600) $ (126,361) $ (46,337) $ (413,929) $ 15,021 (Benefit) provision for income taxes (569) 84,028 (2,735) (31,218) (66,590) Equity in (earnings) loss of unconsolidated ventures (1,182) (981) 4,570 6,722 4,516 Debt modification and extinguishment costs 5,930 61 693 11,129
Slide 27: Adjusted EBITDAR and EBITDA Reconciliations
27 Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after cash capital and financing lease payments Reconciliations (excluding transaction and strategic project costs) ($ in 000s) 2017 Net income (loss) $ (571,606) Benefit for income taxes (16,515) Equity in loss of unconsolidated ventures 14,
Slide 28: Net Debt and Adjusted Net Debt Reconciliations
28 Net Debt and Adjusted Net Debt Reconciliations ($ in 000s) 2017 Long-term debt (including current portion) $ 3,870,737 Line of credit — Less: cash and cash equivalents (222,647) Less: marketable securities (291,796) Less: cash held as collateral against existing debt (1,820) Net Debt 3,354,474 Pl
Slide 29: Adjusted Free Cash Flow Reconciliation
29 Net cash provided by operating activities $ 88,451 $ 66,766 $ 133,108 $ 83,235 $ 83,555 Net cash provided by (used in) investing activities 231,199 (200,372) (60,843) (268,503) (71,589) Net cash (used in) provided by financing activities (177,437) (23,554) 20,026 325,294 (80,873) Net increase (de
Slide 30: CFFO and Adjusted CFFO Reconciliations
30 Non-GAAP Financial Measures (Continued) ($ in 000s) 2017 Net cash provided by operating activities $ 366,664 Net cash used in investing activities (601,307) Net cash provided by financing activities 240,893 Net increase in cash and cash equivalents $ 6,250 Net cash provided by operating activitie
Slide 31: Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures
31 Brookdale's Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures For purposes of this presentation, amounts for each line item represent the aggregate amounts of such line items for all the Company's unconsolidated ventures. Net income (loss) $ 1,917 $ 8,118 $ (22,935) $ (40,233) $ (
Slide 32: Adjusted Free Cash Flow of Unconsolidated Ventures
32 Net cash provided by operating activities $ 40,994 $ 59,924 $ 85,867 $ 62,054 $ 61,910 $ 269,755 Net cash provided by (used in) investing activities 5,556 (1,150,080) (68,585) (20,267) (28,593) (1,267,525) Net cash (used in) provided by financing activities (55,554) 1,145,059 (29,166) (32,514) (5
Slide 33: Proportionate Share of CFFO of Unconsolidated Ventures
33 Non-GAAP Financial Measures (Continued) Brookdale's Proportionate Share of CFFO of Unconsolidated Ventures For purposes of this presentation, amounts for each line item represent the aggregate amounts of such line items for all the Company's unconsolidated ventures. ($ in 000s) 2017 Net cash prov
Slide 34: Brookdale Senior Living Inc. contact details
Brookdale Senior Living Inc. 111 Westwood Place, Suite 400 Brentwood, TN 37027 (615) 221-2250 www.brookdale.com
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