Brookdale Senior Living Inc. · NYSE:BKD
Brookdale Senior Living — Q4 2023 Earnings Presentation
32 slides from Brookdale Senior Living's earnings presentation, Feb 21, 2024
Slide 1: Investor Presentation February 20, 2024
Investor Presentation February 20, 2024
Slide 2: Forward-Looking Statements – Safe Harbor
Forward-Looking Statements – Safe Harbor Certain statements in this Investor Presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include
Slide 3: About Brookdale
About Brookdale v BROOKDALE a4 SENIOR LIVING
Slide 4: Leading senior living operator in the United States
Leading senior living operator in the United States Brookdale is the nation‘s premier operator of senior living communities, with a presence in 41 46 states and the ability to serve approximately 59,000 residents. We offer a broad continuum of services across various sectors of the senior living ind
Slide 5: Tailored product lines support a diverse range of needs
Tailored product lines support a diverse range of needs Independent Living Memory Care Our independent living communities are ideal Our memory care program is rooted in a for seniors who desire to live in a residential person-centered approach that preserves setting that feels like home, without the
Slide 6: Unique and varied community types
Unique and varied community types Expansive Footprint across 41 States Industry Mix(2) Brookdale Mix(1) 51% SNF SNF 9% 2% AL 37% IL IL 24% 40% AL MC 57% 14% MC 74% 17% Brookdale is 23% higher in needs-based AL & MC Brookdale has successfully grown its percentage of owned communities Broad Range of C
Slide 7: Strategic priorities provide a road map to continued growth
Strategic priorities provide a road map to continued growth Health and Wellbeing of Residents and Associates Earn resident and family Get every available unit in Attract, engage, develop trust and satisfaction by service at the best and retain the best providing valued, profitable rate associates hi
Slide 8: Recent Growth and Expectations
Recent Growth and Expectations
Slide 9: Demonstrated remarkable success throughout 2023
Demonstrated remarkable success throughout 2023 Business Highlights and Recent Performance 2023 Performance In 4Q 2023, Brookdale delivered: RevPAR at top end of guidance range ~39% Adjusted EBITDA growth Adjusted EBITDA outperformance for fourth consecutive despite +$70M higher grant income quarter
Slide 10: Intense focus on growing RevPAR through Occupancy and Rate
Intense focus on growing RevPAR through Occupancy and Rate Consolidated RevPAR & Weighted Average Occupancy(1) 85% 860 bps growth since $5,000 inflection point in March 2021 $4,600 80% March 2021 – Pandemic recovery inflection point $4,200 75% $3,800 70% $3,400 65% $3,000 Mar21 2Q21 3Q21 4Q21 1Q22 2
Slide 11: Adjusted EBITDA growth provides positive momentum entering 2024
Adjusted EBITDA growth provides positive momentum entering 2024 (mm) 1Q guidance reflects headwind of 1Q Guidance Midpoint incremental year-over-year impact of $125 Adj. EBITDA $92.5M change in lease classification $100 $75 $50 $25 $0 1Q 2Q 3Q 4Q 2022 2023 2024 Lease Classifications Impact Provider
Slide 12: Anticipated growth in the first quarter of 2024
Anticipated growth in the first quarter of 2024 1Q 2024 RevPAR YOY Growth 6.25% to 6.75% Adjusted EBITDA $90 million to $95 million Reconciliation of the non-GAAP financial measure included in the foregoing guidance to the most comparable GAAP financial measure is not available without unreasonable
Slide 13: Proactive management of capital structure
Proactive management of capital structure $0 59% 92% 93% of debt is non-recourse of variable rate debt is of debt is debt maturities in 2024 property-level mortgage subject to interest rate fixed rate debt financings cap/swap agreements (mm) Recurring Fixed Rate Variable Rate Principal Weighted Matu
Slide 14: Long-Term Organic Growth Opportunity
Long-Term Organic Growth Opportunity
Slide 15: Key Drivers of Long-Term Organic Growth
Key Drivers of Long-Term Organic Growth Rapidly Brookdale’s Limited New Growing Unique Supply Demographic Differentiators Demand
Slide 16: Macroeconomic factors have influenced pace of industry development
Macroeconomic factors have influenced pace of industry development … Higher cost materials ● Labor shortage ● Elevated interest rates ● Tighter credit conditions ● ● Higher cost materials ● Labor market challenges ● Elevated interest rates ● Tighter credit conditions Fed funds rate is now in a range
Slide 17: Limited near-term development pipelines
… which has led to limited near-term development pipelines Inventory growth drops Lower starts and opens enable faster to lowest in a decade(1) occupancy gains for existing communities Inventory Growth New Starts and Opens(2) in NIC Primary Markets(1) (k) In NIC markets nationwide 25 150 55% decline
Slide 18: Age-driven demand for senior living is growing
Age-driven demand for senior living is growing … ● Higher cost materials ● Labor shortage ● Elevated interest rates ● Tighter credit conditions Demographic Trends Target Population(3) ~1 million new seniors enter 30% of Brookdale move-ins are (mm) +58% (5 yrs.) target market age cohort every under a
Slide 19: Difficulties experienced by seniors are on the rise
… and difficulties experienced by seniors are on the rise Higher Acuity Needs: Higher Acuity Needs: Alzheimer's in the US(3) Chronic conditions in residential care(2) 70% of adults age 65+ Higher develop severe need of (mm) High Blood Pressure High Blood Pressure Acuity +39% Alzheimer's and long-ter
Slide 20: Senior living improves affordability of support for an aging population
Senior living improves affordability of support for an aging population Brookdale Senior Living is a strong value proposition 66% of total net 93% increased median Health and Wellness wealth in U.S. is held income for households by Baby Boomer and headed by person aged Silent Generation(2) 65+ from
Slide 21: Brookdale is differentiated within a highly fragmented industry
Brookdale is differentiated within a highly fragmented industry Well Recognized Leadership Position Unaided Brand Awareness(1) Highly fragmented Ranked #1 in Customer Satisfaction in 2022 and 2020 among Assisted competitive landscape 2X more mentions Living/Memory Care(2) with ~2,500 operators, of B
Slide 22: Industry-leading clinical expertise through programs like Brookdale HealthPlus
Industry-leading clinical expertise through programs like Brookdale HealthPlus® Benefits Community-Based, Care Coordination Proactive Care Coordination – Proactive assistance with and management of preventive healthcare That’s Brookdale HealthPlus® services, like annual wellness visits, immunization
Slide 23: Sustainable Organic Growth Potential for Years to Come
Sustainable Organic Growth Potential for Years to Come
Slide 24: Robust revenue opportunity from continued occupancy recovery
Robust revenue opportunity from continued occupancy recovery Returning to pre-pandemic occupancy Achieving our historic occupancy high of 84.5% would drive at least $220M of of 89.0% would drive at least $385M of incremental revenue(1) incremental revenue(1) Brookdale Quarterly Weighted Average Occu
Slide 25: Excellent operating income potential in the coming years
Excellent operating income potential in the coming years (billions) Senior Housing Revenue(1) Returning to pre-pandemic occupancy $3.2 and operating margin would deliver $3.1 $2.9 significant Operating Income Growth $2.6 Key Considerations Represents annualized revenue impact of returning to pre- pa
Slide 26: Brookdale is a solid long-term investment option
Brookdale is a solid long-term investment option Nation’s premier operator of senior living communities known for Strong Brand and Leadership providing exceptional care and services to seniors and their families Brookdale’s innovative initiatives combined with unprecedented Accelerating Demographic
Slide 27: Appendix & Endnotes
as BROOKDALE SENIOR LIVING
Slide 28: Appendix: Definitions and Non-GAAP Financial Measures
Appendix: Definitions and Non-GAAP Financial Measures Definitions Adjusted Senior Housing Operating Income is defined by the Company as segment revenue less segment facility operating expense for the Company’s Independent Living, Assisted Living and Memory Care, and CCRCs segments on an aggregate ba
Slide 29: Appendix: Non-GAAP Financial Measures
Appendix: Non-GAAP Financial Measures Adjusted EBITDA — Definition and Reconciliation Adjusted EBITDA is a non-GAAP performance measure that the Company defines as net income (loss) excluding: benefit/provision for income taxes, non-operating income/expense items, and depreciation and amortization;
Slide 30: Appendix: Non-GAAP Financial Measures
Appendix: Non-GAAP Financial Measures Adjusted Free Cash Flow — Definition and Reconciliation Adjusted Free Cash Flow is a non-GAAP liquidity measure that the Company defines as net cash provided by (used in) operating activities before: distributions from unconsolidated ventures from cumulative sha
Slide 31: Endnotes
Endnotes Slide Reference 1. National Investment Center for Seniors Housing & Care (NIC) IL, AL, and MC units, NIC Supply Set 4Q 2023 4 2. Brookdale’s Senior Housing segments’ resident fees for the trailing 12 months ending December 31, 2023 3. “2023 ASHA 50 Operators” American Seniors Housing Associ
Slide 32: Endnotes
Endnotes Normal Seasonality Sequential View 1Q 2Q 3Q 4Q Lower due to increased Historically highest Begins to turn positive Remains flat to slightly Occupancy Sequential Change incidence and severity of sequential growth period of toward end of quarter positive to third quarter flu the year Full-qua
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